Central bank disputes finding of survey
The Bank of Namibia says it is unfair of an international financial magazine to blame BoN governor Johannes !Gawaxab for the poor state of the Namibian economy.
OGONE TLHAGE
WINDHOEK
The Bank of Namibia has come to the defence of its governor Johannes !Gawaxab, who recently scored a D+ grade in an international survey of central bankers.
Global Finance magazine had accorded !Gawaxab the unattractive score, citing his cautious approach to managing monetary policy since his appointment in June 2020.
“The bank has noted with grave concern the inconsistency in the rating and subsequent reports stemming from the subjectivity of the interpretations of the ratings. These reports and the conclusions thereof appear fundamentally flawed,” the Bank of Namibia said in response to the ratings.
The central bank added that it was restricted solely to determining fiscal policy and that tying the health of the economy to the performance of the governor was unfair.
“An attempt to correlate the actions of the central bank and the performance of the governor to the overall macroeconomic conditions in the country is inaccurate and highly misleading, as the bank is restricted to its role of ensuring monetary and financial stability,” the Bank of Namibia said.
Interest rates
The central bank had lowered its repo rate to historically low levels, in tandem with the South African Reserve Bank (SARB), in March 2020 when Namibia registered its first case Covid-19.
The rate stood at 5.25% in March 2020, and is currently 3.75%.
“More than a year after he took over as governor, !Gawaxab continues to adopt a cautious approach in monetary policy. In August, the BoN kept the repo rate unchanged at 3.75% terming it appropriate in supporting the weak domestic economy and safeguarding the one-to-one link between the Namibia dollar and the South African rand,” Global Finance said.
The magazine also raised concern over declining commercial banking profits and the rise in non-performing loans (NPLs) that had been registered by commercial banks.
“The ripple effects have been significant decline in banking industry profits and surge in NPLs. Concerns over the stability of the industry has forced BoN to heightened credit risk monitoring and carry out stress tests. The weak economy has forced BoN to revise its economic growth projections to 1.4% from an earlier forecast of 2.7%,” Global Finance said.
Contract renewed
!Gawaxab’s mandate to lead the central bank was renewed in December when President Hage Geingob extended his contract for a further five years, effective 1 January 2022.
Prior to his appointment as central bank governor, !Gawaxab served as chairman of private equity firm EOS Capital. He had also previously served as Old Mutual executive for Africa for 16 years.
Among !Gawaxab’s counterparts in southern Africa, SARB governor Lesetja Kganyago scored an A-, Bank of Botswana governor Moses Pelaelo scored a B+, Bank of Mozambique governor Rogério Zandamela scored a C, National Bank of Angola governor José de Lima Massano scored a B- while Zimbabwe Reserve Bank governor John Mangudya scored a C-. The magazine said it was too early to rate Bank of Zambia governor Christopher Mvunga.
WINDHOEK
The Bank of Namibia has come to the defence of its governor Johannes !Gawaxab, who recently scored a D+ grade in an international survey of central bankers.
Global Finance magazine had accorded !Gawaxab the unattractive score, citing his cautious approach to managing monetary policy since his appointment in June 2020.
“The bank has noted with grave concern the inconsistency in the rating and subsequent reports stemming from the subjectivity of the interpretations of the ratings. These reports and the conclusions thereof appear fundamentally flawed,” the Bank of Namibia said in response to the ratings.
The central bank added that it was restricted solely to determining fiscal policy and that tying the health of the economy to the performance of the governor was unfair.
“An attempt to correlate the actions of the central bank and the performance of the governor to the overall macroeconomic conditions in the country is inaccurate and highly misleading, as the bank is restricted to its role of ensuring monetary and financial stability,” the Bank of Namibia said.
Interest rates
The central bank had lowered its repo rate to historically low levels, in tandem with the South African Reserve Bank (SARB), in March 2020 when Namibia registered its first case Covid-19.
The rate stood at 5.25% in March 2020, and is currently 3.75%.
“More than a year after he took over as governor, !Gawaxab continues to adopt a cautious approach in monetary policy. In August, the BoN kept the repo rate unchanged at 3.75% terming it appropriate in supporting the weak domestic economy and safeguarding the one-to-one link between the Namibia dollar and the South African rand,” Global Finance said.
The magazine also raised concern over declining commercial banking profits and the rise in non-performing loans (NPLs) that had been registered by commercial banks.
“The ripple effects have been significant decline in banking industry profits and surge in NPLs. Concerns over the stability of the industry has forced BoN to heightened credit risk monitoring and carry out stress tests. The weak economy has forced BoN to revise its economic growth projections to 1.4% from an earlier forecast of 2.7%,” Global Finance said.
Contract renewed
!Gawaxab’s mandate to lead the central bank was renewed in December when President Hage Geingob extended his contract for a further five years, effective 1 January 2022.
Prior to his appointment as central bank governor, !Gawaxab served as chairman of private equity firm EOS Capital. He had also previously served as Old Mutual executive for Africa for 16 years.
Among !Gawaxab’s counterparts in southern Africa, SARB governor Lesetja Kganyago scored an A-, Bank of Botswana governor Moses Pelaelo scored a B+, Bank of Mozambique governor Rogério Zandamela scored a C, National Bank of Angola governor José de Lima Massano scored a B- while Zimbabwe Reserve Bank governor John Mangudya scored a C-. The magazine said it was too early to rate Bank of Zambia governor Christopher Mvunga.
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