The Bank of Namibia (BoN) has hit back at the rating of its Governor, Johannes Gawaxab by Global Finance magazine in its Central Bank Governors in 2021 survey, raising rating inconsistency concerns.
Gawaxab was lowly rated after he scored a D+ in the survey.
“Acknowledging that these ratings are computed with input from analysts, economists, and other subjective sources, 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. For example, 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,” BoN Spokesperson, Kazembire Zemburuka said on Monday.
“The Bank is accountable for its actions to the Namibian people. In this regard, the Bank’s actions are guided by data, economic conditions, and monetary arrangement and not by opinions and wish lists. The record speaks for itself. For this reason, the Bank wishes not to dwell on the ratings nor attach weight thereof, as they appear to lean more towards the subjective side of the spectrum.”
He said the central bank under the leadership of Gawaxab had introduced measures and policy actions that have helped cushion the domestic economy against the negative effects of COVID-19.
“Notwithstanding the unprecedented shocks on the economy and financial institutions, Namibia has emerged relatively resilient thanks to the prompt measures undertaken by key stakeholders, including the Bank of Namibia. During these difficult times, the Bank is proud of the collective work to steer the ship led ably by the Governor of the Bank.
It is common cause that Namibia’s macroeconomic stability has been tested during the preceding two years due to the Covid-19 pandemic. During such difficult economic times confidence tends to be affected negatively. Notwithstanding the unprecedented shocks on the economy and financial institutions, Namibia has emerged relatively resilient thanks to the prompt measures undertaken by key stakeholders, including the Bank of Namibia. These measures were taken to maintain credit flow and to ensure that the domestic market was liquid – conditions essential in averting a crisis and a deeper recession,” Zemburuka said.
“Therefore, the rating does not invalidate the significant contributions of the monetary authority during the past 19 months. The decisions taken have effectively stabilised the system and provided a solid foundation for economic agents and authorities, to build on, in continuous efforts to recover the economy.”
He said the deterioration of general confidence induced by COVID-19 has continued to undermine the effectiveness of central banks’ measures amid the already low credit uptake, which has further negatively affected consumption and investment which are key elements for economic recovery.
“The Bank is also aware that when COVID-19 hit our shores, the economy was already reeling from slowed economic activity, limiting to some extent the effectiveness of the Bank’s measures. Notwithstanding the constraints cited, the central bank measures and policy actions in no doubt have helped the economy not to sink into a deeper recession and scarring as inaction would have resulted in an otherwise worse outcome,” Zemburuka said.
