SADC Region Working Towards Harmonising Central Banking Policies

SADC Development and Training Forum held a regional seminar for financial sector supervisors on risk management in collaboration with MEFMI in Harare, Zimbabwe recently.

The purpose of the seminar was to provide the participants with a better understanding of recent developments in risk management affecting the financial services sector.

 The seminar was hosted by the Reserve Bank of Zimbabwe and was the second event MEFMI jointly organized with SADC.  The first event was held in 2013, following the signing of an MOU that allows the two institutions to leverage on each other’s skills to jointly conduct capacity building activities through provision of expertise.  The primary objective of the SADC Development Training Forum is to build competencies in central banks guided by SADC development agenda.  

The seminar was officially opened by the Deputy Governor of the Reserve Bank of Zimbabwe, Dr Charity Dhliwayo.  In her opening remarks, Dr Dhliwayo commended both SADC and MEFMI for demonstrating that they are leading institutions of excellence for training and regional cooperation. She noted that, the region has over the years seen an increased participation of local banks in international and/or global financial markets; and while this expansion is a positive development for the respective economies and the region at large, it has also ushered in new dimensions of risk in the banking sector, which the supervisors need to be aware of and to prepare for. She implored the participants to work towards implementing the enhanced supervisory approaches that were introduced in the aftermath of the Global Financial Crisis which include the revision of the Basel Core Principles on Banking Supervision, Basel II/III, and adopting supervisory methodologies such as risk-based supervision, consolidated supervision, and macro-prudential supervision.

Dr Dhliwayo reminded the participants of the increasing importance of capital adequacy, prudent corporate governance practices, good risk management practices, effective supervision, and transparency in fostering and maintaining financial stability in an increasingly integrated and interconnected global financial system. She expressed contentment that these are the issues were to be covered by the seminar and implored participants to take the opportunity to exchange knowledge and experiences on these topical and emerging supervisory issues, in particular the factors affecting financial stability in the SADC region.

The Chairman for SADC committee for Training and Development, Mr. Bekezela Morris Mpofu hailed the collaboration between MEFMI and SADC which ensures that there is no duplication of efforts and that technical assistance is being channeled to areas of need. He noted the good relationship that the two institutions have had over the years that have resulted in the leveraging of resources and expressed his desire to see the relationship continue for the betterment of the region.

Speaking at the same occasion, Mr. Patrick Mutimba, the Director of Financial Sector Management at MEFMI mentioned MEFMI’s plans to come up with a risk based supervision guideline for the region. He reminded participants that MEFMI has 20 years of capacity building delivery which now needs to culminate into global best practice being applied in the context of the region’s developing economies.

The development of model guidelines is in line with SADC region initiatives to harmonise central banking policies towards convergence into a single monetary union.  In this therefore imperative that capacity building in the region is enhanced in order to standardise supervision techniques in all SADC central banks. The training forum reports to the Committee of Central Bank Governors (CCBG) that meets twice a year to review and discuss training needs within the region. MEFMI was identified by the Committee of Central Bank Governors as a strategic partner in training as it already has the mandate of building capacity to central banks and ministries of finance in the region. 

Discussions included financial stability and the overview of SADC macroeconomy; the revised core principles of bank supervision; corporate governance and bank failures; changes in accounting standards, Basel II, Enterprise Wide Risk Management (ERM); and mobile banking in promoting financial inclusion.

Participants were from SADC countries namely; Malawi, Mozambique, Namibia, Seychelles, Swaziland, Tanzania, Zambia and Zimbabwe. Some sessions were also attended by selected participants from other financial services and audit and accounting firms. Facilitators were drawn from accounting firms, commercial banks, RBZ and MEFMI. Facilitators all provided gratis services with some coming from as far as United Kingdom. The level of support rendered by the accounting firms and commercial banks to the activity speaks to the good relations MEFMI, SADC and RBZ have with the institutions and is commendable.

The presentations were well received and this showed in the level of interactive responses and the interest generated by participants. The seminar enhanced knowledge in emerging issues in financial sector supervision that include the following:  

a)     Financial stability and the SADC macroeconomy;

b)     Revised core principles of bank supervision;

c)     Corporate Governance and National Codes in MEFMI countries;

d)     Enterprise Wide Risk Management (ERM);

e)     Liquidity and Market Risk Management strategies;

f)      Changes in Accounting Standards;

g)     Capital Modelling and management; and

h)     Mobile Banking in promoting financial inclusion.