As the risks to the economic recovery from the pandemic remain, the economic consequence of the war in Ukraine is already compounding the socio-economic impact of the pandemic confronting central banks in the African continent and around the globe, leaving them with a difficult policy tradeoff between addressing elevated inflationary pressures and fostering the nascent post-pandemic economic recovery.
And successfully navigating through this difficult situation, requires strong policy coordination among the institutions in charge of macroeconomic management and significantly strengthening the independence of the central banks to meet their policy objectives and avoid de-anchoring of inflation expectations that could delay the return to price stability.
It is significant to note that central banks have always been at the cutting edge of financial technology and innovation, that in the past, the invention of banknotes, the processing of payments through debits and credits in book-entry accounts, and the evolution of interbank payment systems from the telegraph to internet protocols were all transformative innovations.
However, central banks are facing new and unprecedented challenges such as distributed ledger technology, new data analytics (artificial intelligence and machine learning), and cloud computing, along with a wider range of mobile access and increased internet speed.
However, he said the rapid and ongoing progress in digital technologies has increased the prospect for the adoption of new forms of money with the potential of transforming the financial landscape and that in Sub-Saharan Africa, the use of mobile money as a percentage of the population aged-15 years and above, almost tripled between 2014 and 2021—going from 11.6 percent to 33.2 percent.