Goroga ka Pula, Rre Pelaelo
Mmegi Editor | Thursday March 2, 2017 17:08
Pelaelo, who served as deputy governor under the immediate-past governor, Linah Mohohlo, has indicated that greater transparency will be a hallmark of his term, among other priorities.
Already, the new governor has lifted the veil of secrecy off of the traditionally private meetings of the Monetary Policy Committee (MPC), a body that has previously met in absolute secret, but whose decisions reverberate across all economic strata.
The MPC, as it is generally known, meets six times a year and decides the level of the bank rate, a key rate set by BoB to influence all other interest rates in the market. Adjustments to the bank rate influence the cost of most existing and new borrowings, as well as return on deposits across all categories of products. Previously, all that was known about the MPC was that it met six times a year, but thanks to the new era ushered in by Pelaelo, the Committee’s deliberations and decisions will be subject to greater transparency and scrutiny via a meeting after each MPC. The dates of each MPC, previously a closely guarded secret within the BoB, have already been published and the market can pencil these into the calendar and plan accordingly.
It would be foolhardy to expect that each and every single process, decision or function the BoB or monetary policy can be fully opened up to public scrutiny or knowledge. Indeed there are processes, such as portfolio placements of strategic national reserves, that are best served by secrecy and in fact, successful only thanks to high discretion.
In addition, to some extent, the central bank has opened up over the years, through establishing a Public Education department, a vibrant website and publicising key documents such as the Annual Report, monthly Botswana Financial Statistics, Business Confidence Surveys and internal newsletters.
What Pelaelo is doing, however, is going beyond providing the numbers and decisions and providing interface for the scrutiny of these via greater interaction with the media. This can only foster greater depth of skill in reportage around monetary policy, banking and related matters, which in turn better informs ordinary Batswana and triggers broader national debate of these once murky issues.
The BoB, rather than sitting at the top of the mountain and dictating terms to ignorant masses down below, can now receive feedback on key issues such as levels of interest rates, the fostering of savings, banking services, access, competition and even citizen empowerment in the banking sector. We applaud these initial steps taken by the governor and would urge him to continue along the same path by possibly shining light on the quarterly auction of government notes, as well as publication of thought leadership research articles.
Today’s thought
“It is the intention to enhance transparency and interaction with the market with a view to further buttressing policy transmission and credibility.”
- Moses Pelaelo