The Bank of England (BoE), the South African Reserve Bank (SARB), the Bank of Ghana and the Bank of Sierra Leone (the last two being their countries’ central banks) have entered into a partnership to share their expertise, improve regulation and decrease the risks of banks failing in their respective countries. The partnership was announced during the recent Commonwealth Heads of Government Meeting, in London, by UK International Development Secretary Penny Mordaunt.
The partnership will see Bank of England experts helping the West African central banks develop financial systems that will be sustainable and drive local and regional growth. In the case of the SARB, the focus will be on South Africa’s role as the regional financial hub for Southern Africa. This technical assistance programme will be funded by Britain’s Department for International Development, with an initial amount of £2-million. This quadripartite partnership represents only the first stage of the planned cooperation programme between the BoE and other Commonwealth central banks.
“The SARB has agreed to cooperate with the BoE on training and technical assistance as part of a pilot project funded by the UK Department for International Development (DfID) aimed at providing assistance for central banks in selected African countries,” stated the SARB in its press release. “The Bank of Ghana is happy to be part of this technical cooperation programme with the BoE,” affirmed Bank of Ghana governor Dr Ernest Addison. “We envisage benefiting from the BoE’s experience in dealing with financial stability and macroprudential regulation to assess the full implications of macro issues on the financial system.”
“The BoE is excited to be embarking on this new partnership with the Bank of Ghana, the Bank of Sierra Leone and the SARB,” stated BoE COO Joanna Place. “In our increasingly interconnected global financial system, cooperation between central banks is critical to providing the financial stability on which all our citizens rely. We look forward to supporting our counterparts in delivering their priorities in building this essential foundation for growth.”
A separate initiative, launched at the same time, is the Commonwealth Digital Finance Champions Group, which aims to stimulate innovation to increase access to finance for poor and underbanked people, including by finding ways of reducing the costs of remitting cash from one country to another. Its founding members are Ghana, Jamaica, Kenya, Rwanda and the UK.
“Kenya is hailed globally for its early and successful adoption of mobile money,” pointed out Kenyan Ministry of Information, Communications and Technology Cabinet Secretary Joe Mucheru. “The recent launch of mobile money interoperability in the country will contribute towards bridging the remaining margin to achieve total financial inclusion for all Kenyans. “I encourage the Commonwealth community to explore the potentials of applying cutting-edge technologies, such as blockchain, for distributed ledgers, and artificial intelligence, as this can enhance public service delivery and boost economic growth, particularly for developing economies such as Kenya.”
In parallel with these developments, the London Stock Exchange (LSE) and the Nairobi Securities Exchange (NSE) signed a letter of intent, which created a partnership with a nongovernmental organisation (funded by the DfID), called FSD Africa, which is focused on the development of the African financial sector. Together, FSD Africa, the LSE and the NSE will bring a small and medium enterprise development programme, known as the Elite Programme, to East Africa.