Since its establishment in 1975, the BoB has been wholly government owned with its board and governors appointed by the President and the Finance Minister. Monetary policy, which includes interest rate management, has been influenced by the fiscal authority and also been supportive of government’s economic aspirations such as recently seen in the BoB’s slew of initiatives to support economic recovery in the coronavirus pandemic.Central bank independence, or “operational autonomy” meanwhile, means that a central bank has the freedom to conduct monetary policy without political or government interference, the BoB said this week in a commentary accompanying its 2019 Annual Report.
“Going forward, there will be need to entrench aspects of practice by the Bank of Botswana and institutional relationships into legislation in order to clarify the ranking of objectives, enhance autonomy of the Bank and associated accountability requirements, improve the institutional arrangements relating to the conduct of policy, policy dispute resolution process and, generally, to update the law to align with modern practice and conventions,” the Bank said. The commentary continues: “In view of this, a draft amended Bank of Botswana Act incorporates anchors for central bank autonomy, clarity of mandate, and institutional arrangements for greater transparency and accountability.”
