Delegates from Central Banks in COMESA member States have recommended to their institutions to enshrine price stability in law as one of their primary objectives.

This was one of the recommendations that emerged from a validation workshop on a study conducted by the Central Banks titled “Effects of Fiscal Policy on the Conduct and Transmission Mechanism of Monetary Policy in Selected COMESA Member Countries”.

The study identified the key challenges of implementing monetary and fiscal policies and made recommendations aimed at ensuring the effectiveness of fiscal and monetary policy coordination based on best international practices.

During the workshop hosted by the COMESA Monetary Institute (CMI) in Nairobi from 19th to 20th October 2015 the delegates also recommended the curtailing of fiscal dominance to contain uncertainties in the conduct of monetary policy.

Further, they proposed for the development of a robust financial market infrastructure to support the functioning of financial markets and monetary operations. Capacity building on liquidity forecasting and macro-modeling was also proposed.

CMI Director Mr. Ibrahim Zeidy underscored the significance of the studies in addressing daunting challenges in macroeconomic management in the region.

“The study will significantly contribute to policy advice that will ensure macroeconomic stability in member countries, and hence the achievement of macroeconomic convergence in COMESA region,” Mr Zeidy said.

Delegates from Central Banks of 11 Member States namely Burundi, Egypt, Kenya, Malawi, Mauritius, Rwanda, Swaziland, Sudan, Uganda, Zambia, and Zimbabwe attended the workshop.

The hosting of the workshop followed the decision of the COMESA Committee of Governors of Central Banks during their 20th Meeting which was held in Kinshasa, DR Congo in November 2014 that directed the CMI to conduct the study.

At the same time the COMESA Monetary and Exchange Rate Sub-Committee meeting was also held to consider the status of implementation of its work plan for 2015 and prepared the one for 2016. This is in readiness for the Governors meeting scheduled for November 2015.

The proceeding of the workshop will be published as a CMI knowledge product soon.