This opinion piece seeks to determine the extent to which the new Bank of Namibia Act 1 of 2020 (the Act) imports neoliberal central banking rules as well as the degree of divergence, if any, from traditional central bank mandates enshrined in law. The piece also emphasises the attempt to domesticate the Southern African Development Community (SADC)’s Central Bank Model Law, Namibia being one of the first countries in the SADC region to do so.
Many countries establish central banks when they achieve independence, and this was no exception for Namibia in 1990. The Namibian Constitution provides for the establishment of a central bank. As a result, the Bank of Namibia (‘the Bank’ or ‘BoN’) was founded immediately after independence by the passage of the Bank of Namibia Act 8 of 1990, repealed in 1997 and again changed in 2004. The freshly enacted Bank of Namibia Act 1 of 2020 recently removed the latter laws.
Independence of the central bank
An examination of the Act reveals a fusion of traditionalism with neoliberalism. The law is largely based on the SADC model law for central banks; it imports regionalism through the harmonisation of laws of the sub-region.
A key improvement in the Act is that it fortifies the independence of the Bank by imposing a criminal sanction. The Act also demands ultimate transparency and accountability. Central bank independence constitutes a core element of modern central banking law. More importantly, it forms a key part of neoliberalism theory. This is traditionally evident in the central bank’s monetary policy formulation role, where the Bank has autonomy. While maintaining independence, there are some circumstances where consultations with the Minister of Finance are essential, such as the appointment of Governors and non-executive independent directors.
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Source: New Era
