Rundheersing Bheenick: Becalmed - but still on course
Welcome address by Mr Rundheersing Bheenick, Governor of the Bank of Mauritius and
Vice-Chairman of the Association of African Central Banks (AACB), at the Opening
Ceremony of the 2013 Symposium of Governors preceding the 37th Assembly of Governors
of the AACB, Balaclava, Mauritius, 22 August 2013.
* * *
It is an immense privilege for me to welcome you all today on the occasion of this
symposium on financial inclusion on the eve of the 37th Assembly of the AACB - the
Association of African Central Banks. This is an historic occasion both for Mauritius and for
the Bank of Mauritius. We are hosting the Assembly Meeting and the Symposium of the
Association for the first time in the history of our small island-state.
There are indeed many firsts: this is the very first time the AACB is meeting off-shore -
away from the African mainland. It is the first time that AACB annual meetings are witnessing
such a record attendance; and also the first time that we are having in our midst the General
Manager of the Bank for International Settlements, the President of the African Development
Bank, and the Secretary-General of the Islamic Financial Services Board.
We have all of Africa here, and when we include the flagship institution of the G-20, we
have almost all the world represented under one roof, bearing testimony to the growing interest
in the happenings on this great Continent. And from Africa itself - just to give you an indication
-
of the representation from North Africa we have our Chairman, Governor Laksaci of Algeria;
from the West we have Governor Sanusi of Nigeria; from Central Africa, we have Governor
Nchama of Banque des Etats de l'Afrique Centrale; from the East we have Governor Mutebile
of Uganda, and from the South we have Governor Marcus of South Africa - a grand total of
32 Governors and heads of Central Bank delegations representing 44 countries. I welcome
you all here today. I wish the meeting great success and hope your stay here will be fruitful and
worthwhile for you all.
We are here to discuss what is emerging from the G20 Financial Inclusion Action Plan
to improve the livelihoods of the poor, and to support Micro Small and Medium Enterprises,
the engines of economic growth and job creation - in much of the world, and not just in
Africa. At the time Governors decided upon the theme of the Symposium last year, we could
not have foreseen that the subject would assume such importance as to attract this splendid
attendance. Governors will recall that we did discuss financial inclusion as far back as 2007.
In truth, our choice of this AACB Agenda converges with its development through the
G-20 process.
Many countries worldwide are actively engaged in reforms and programmes for the
provision of affordable banking services, which makes the topic of our Symposium
particularly pertinent. The slow recovery from the global crisis forces us to revisit our growth
strategies and take a closer look at their impact on the whole of the societies we are
expected to serve, not just the prosperous, but also the poor and the excluded - who are
showing increasing signs of impatience as they wait for the elusive magic of trickle-down to
improve their lot.
Africa is changing fast. From the gloom and the conflict of the last decades we now
have new hope and opportunity spreading across the whole continent. In some parts, it is not
just a wind of change but a veritable tempest. Indeed, in certain places, such is the pace of
change that some fear that we are moving straight from the African Spring into a wintry
period of discontent. We are here, therefore, to address the issue of what can the world of
banking do to push back this spectre. With 77% of our population still having no access to
formal finance, we have our work cut out for us.
Today, as we open our discussions on inclusive finance and banking, we must frankly
admit that in an environment where only a small minority of people ever set foot in a bank,
and where banking itself is hardly part of the greater political debate, we face a daunting
prospect to find a pathway for promoting the best use of the capital resources available to the
continent, to ensure balanced and sustainable growth with social stability, hand-in-hand with
price stability, financial stability, and monetary stability. Stable currencies and control of
inflation figure high among pro-poor policies. To maintain our focus as central banks and to
remind ourselves of the distance we still have to travel, it is sobering to note that we are
reaching the time when we should embark on Stage IV of the African Monetary Cooperation
Program, which reduces the annual inflation target from the current 5% to 3% - a bar which
is too high for many of us at this juncture.
The wider agenda, when the present troubles have been overcome, is of course the
movement towards regional economic, monetary and fiscal union. The steps to be taken on
that pathway are many and difficult. Our model from Europe is itself under great scrutiny; and
we must adapt our strategy and our timetable as we absorb the lessons we have been
learning from that troubled experiment. An important issue here is how far we can together
achieve even the early stage of economic convergence, when only 4 out of 46 countries
successfully met the targets in 2011, the last year for which we have comparable data. Even
Mauritius is having difficulty here. Meeting these soft targets is a sine qua non if we are to
have any real hope of achieving the overarching ambition of an African Economic
Community.
But as necessity is the mother of invention, if I may quote from my good friend Plato, I
see with pleasure how many of our colleagues have been vigorously inventive. Across the
African region we are seeing innovation with branchless and mobile banking, which is cutting
down the barrier of distance, reducing the cost of financial services, and delivering low-cost
accounts for poorer people and small businesses. Indeed, technology is transforming the
contours of the banking and financial landscape - and nowhere more so than here in Africa.
We have also been more than busy, counteracting fraud and money laundering, and
locking up the real "banksters" in the profession, who for too long have been giving our
business a bad name. Our friend and distinguished colleague from Nigeria, Governor Sanusi,
has been one of the pioneers in this sharp-shooting side of the business. Such reforms in
banking discipline, security and probity are essential prerequisites for extending banking
services to the unbanked, but deserving, majority, in Africa.
Driven by such innovation, banking in Africa today is emerging as a poster boy of
empowerment and growing inclusiveness. Kenya, as Governor Ndungu can attest, is widely
recognized as leading the field in a new generation of banking in Africa.
We must, however, beware of hubris: for if we are at last getting on the right track, we
must not just sit there contented, only to be run over by the next train that comes along!
Innovation, built on sound R & D, must be our way of life. For we have a major job in hand to
keep pace with innovation in trade and investment in the region, and to provide the support
that will ensure they thrive. As financial inclusion becomes another accepted test of quality in
banking policy, it will, I am sure, provide a more solid foundation for promoting sustainable,
equitable, and inclusive growth in the region.
Now let me take this opportunity to warmly welcome experts from the African
Development Bank, the Bank for International Settlements, the IMF and Standard Bank. Your
contribution to our proceedings is eagerly awaited. You have done so much over the years,
as our major advisers and development partners, to help us steer our countries from the
darker days of the past, into the fresh light of a future rich with promise. For Africa is now
emerging as the up-and-coming global centre of attention, a continent on the cusp of a major
breakthrough. I have no doubt you can enrich our discussions on the general aspects of
financial inclusion, as well as on the more technical issues of monetary policy and financial
stability and their relevance to inclusiveness.
The General Manager of the Bank for International Settlements, Jaime Caruana, will
give a special address on the Basle process and the global aspects of Financial Inclusion.
He is very committed to the Financial Inclusion Agenda of the G-20 which has been
germinating since 2008, in the wake of the global crisis. We thank him for his interest in the
work of the AACB. We take this opportunity to also thank him for hosting at his headquarters
in Basel an annual Round Table for the benefit of African Governors, with selected peers
from elsewhere. This new development agenda pulls together the policy objectives of
financial stability, financial inclusion and consumer protection, to overcome the clear
shortcomings of the traditional framework of financial liberalisation. Jaime Caruana will no
doubt brief us on the work of the two subcommittees of the G-20 on SMEs and on consumer
access through innovation. Commissioner Maruping will share with us the African Union's
perspective on our work.
Tomorrow at the Assembly of Governors, we will have the President of the African
Development Bank, Donald Kaberuka, who will talk to us about the Africa 50 Fund and how it
can help to bridge the infrastructure gap now hampering faster growth and better quality of
life on the continent. And the Secretary General of the Islamic Financial Services Board,
Jaseem Ahmed, will bring his inputs later into our discussions by sharing with us his views on
Islamic Finance and financial inclusion.
I must express my thanks to those organisations who have partnered with us to
organise this event, and given us such fulsome support. First, the three banks: State Bank of
Mauritius, Standard Bank and Barclays Bank. They are all leading the way in working
towards closer financial links between Mauritius and the wider region. Next, our two
banknote suppliers: Oberthur Fiduciaire, a leading banknote printer, won their very first
supply contract in Mauritius with the notes which we shall be launching today. De La Rue,
our traditional supplier, has a much longer association with Mauritius, going all the way back
to 1860 when they supplied us with the first ever banknotes that the company produced. De
la Rue is the supplier of the Rs 500 polymer note that we launch today. Third, two technology
partners: SICPA, which manufactures the special security inks for our bank notes; and the IT
company CMA Business Systems, who have been working with us on the COMESA
Regional Payments System, the Real Time Gross Settlement System, and the Cheque
Truncation System. We thank them most sincerely for their generous support.
Our symposium will be successful only if we uncover new knowledge, form new
partnerships for collaboration, if we establish new networks for continual communication
across this vast continent and its island-states, and above all if we secure new professional
friendships, to be nurtured over the years to come.
Colleagues and friends, just a word about financial inclusion and financial access in
Mauritius. Mauritius is making slow, but steady progress in economic and social
development, despite the global economic and financial crisis. The Bank of Mauritius has
been working closely with Government in promoting SMEs through a Bank of Mauritius-
managed scheme, now in its second year, extending credit for new start-ups. We have a
Task Force hard at work on Unfair Terms in Financial Contracts, that have been subject of
complaints by consumers, for their excessive cost, inhibiting development and trade.
A major innovation in banknote technology is the use of polymer to replace the
traditional paper substrate. We are following in the steps of some of our African peers in the
introduction of polymer bank notes. We trust that these notes, like our population here, will
enjoy increasing length of life and security. Today's Symposium could not have been a more
perfect timing for launching our polymer bank notes. Our Prime Minister has accepted to
address us this morning when he will proceed with the official launching of these polymer
notes. By this happy coincidence, AACB will forever be associated with polymer notes here
in Mauritius.
Let me reiterate that I am delighted to have you with us here in our small island. I have
no doubt that our meeting will be very stimulating and generate lots of ideas on how finance
could promote inclusive growth.
Organising this meeting in this small island-state has been quite a challenge for us. I
must therefore express my personal thanks to the AACB, the organising team at the Bank,
the Office of the PM and the various agencies involved in the logistic arrangements for your
reception. And I must add my personal thanks to the head of my office at the Bank for
coordinating the whole thing.
I wish you a pleasant stay in Mauritius. I hope that our meeting will help to promote
greater innovation and make a contribution to stimulate economic growth and prosperity in
this great continent. In this way, we can validate the perennial and evergreen character and
continued pertinence of the famous remark of the Roman historian, Pliny the Elder, who
observed
"There is always something new out of Africa!"