Transparency: Bank of Namibia

Transparency and communications not only underpin the political legitimacy of an operationally independent central bank as a public institution, they also play an important role in monetary policy, by shaping market behaviour and expectations.

For the Bank of Namibia (BoN), there is an additional complication. The country has an exchange-rate peg with the region’s largest economy, South Africa. Namibians – and others – often assume that this means Namibia’s central bank has no choice but to follow the monetary policy actions of the South African Reserve Bank (Sarb). This is incorrect. But explaining that nuance is challenging.

To address this problem, the BoN has embarked on a thorough overhaul of its monetary policy communication. As part of a wider strategic plan, the southern African central bank now announces and explains policies in new locations, on new platforms and in new languages. 

The land and its people(s)

Namibia is a large, sparsely populated country. Its 825,615 square kilometres make it larger than Texas, but Namibia has fewer than three million inhabitants, spread out over 14 regions – 46% of them live in rural areas, according to World Bank data from 2022. 

Although English is Namibia’s official language, nearly half the population speaks Oshivambo as their first language. As Kazembire Zemburuka, the director of strategic communications at BoN, explains, there are 11 local languages in the country. Namibia is also relatively young, becoming independent of South Africa in 1990. 

Declaring independence

The Bank of Namibia’s new monetary policy communications programme grew out of a three-year strategic plan, released in late 2021. The plan was “quite important for us as a communications team” because “we had stakeholder engagement being identified as one of the bank’s four strategic pillars”, says Naufiku Hamunime, principal for international relations and stability at BoN.

The central bank’s biggest communications problem related to monetary policy was explaining its relationship with South Africa and the Sarb. Since 1993, Namibia has pegged its currency, the Namibian dollar, to the South African rand at a 1:1 rate. 

The peg means the Bank of Namibia does not have full monetary policy autonomy. Although Namibia has a separate policy rate, it cannot diverge too much from the Sarb’s without destabilising the peg.

Namibian media and public opinion have tended to exaggerate this constraint, assuming the Bank of Namibia merely followed the Sarb. “There seems to be a perception within our context that we are not independent when it comes to setting monetary policy,” Zemburuka tells Central Banking. Some Namibian social media posts conveyed the message “that we function as a satellite branch of the Sarb” or “that we depend on the Sarb in setting our monetary policy, which is not the case”, Hamunime adds. 

Sarb’s latest tightening cycle started in November 2021 and ended in May 2023, and totalled 475 basis points (3.5–8.25%) in rate rises. Namibia, by contrast, started hiking in February 2022, holding rates at its November 2021 monetary policy committee (MPC) meeting, and halted its increases in June 2023 after 400bp (3.75–7.75%) of rises. Generally, the Namibians do mirror Sarb, but not always – for example, Sarb hiked 75bp in November 2022, but Namibia only hiked 50bp.

On the socials

If the central bank’s image was suffering on social media, part of its solution would lie in expanding its virtual platforms reach. The BoN began livestreaming its monetary policy announcements on its Facebook page, and providing links to the livestream via YouTube, LinkedIn and Twitter.

It is also developing a presence on other platforms. In 2023, the BoN set up an Instagram account, and Hamunime says staff are discussing adding a TikTok channel.

The BoN’s message is gaining traction online. Across Facebook, LinkedIn and Twitter, its audience has increased by more than a third, to 98,619 followers. “So, our content is really going out there. It’s going viral. People are sharing,” Naufiku says. She adds that the Namibian press is also reporting more frequently on the central bank.

More clearly to more people

In addition to broadening the channels through which it communicates, the BoN has also striven to make its work accessible through a greater focus on communication with the press and laypeople. 

It instituted a monetary policy dialogue session, held the day after announcing its monetary policy decisions. This is also livestreamed. Here, BoN governor – Johannes !Gawaxab – explains the economic context behind the monetary policy decision. “We unpack the monetary policy statement as well as highlighting some key primary, secondary and tertiary sectors, and their contribution to the economy in general,” Zemburuka explains.

“Previously, people didn’t know the Bank of Namibia representatives who form part of our MPC,” adds Hamunime. “And so, when we had the dialogue, we had all of our MPC members, led by the governor, sitting in front of everyone, so the economists could engage with them directly.”

The BoN has also expanded its work with media, students and the general public. It has recorded short interviews with members of the public, asking them about their understanding of economics and the central bank’s work. 

Getting out and about

One problem the Bank of Namibia faced was that its activities tended to be concentrated at its headquarters in the capital, Windhoek, although it does have a branch office in the northern town of Oshakati, in the Oshana region. To remedy this, the central bank arranged to hold one of its monetary policy conferences at a regional office in Oshakati as well as hosting two economic reporting workshops for local media outside of Windhoek, in the Erongo and Oshana regions, respectively.

To reach a broader audience, the BoN has also begun to communicate in more Namibian languages. Naufiku says the central bank is now translating the monetary policy statement into six of the 11 official languages. Central bank staff draft the translations and announce the decisions with the assistance of local media.

Next steps

Zemburuka says the BoN has several new projects in the works. It plans “a monetary policy process flow animation” to better visualise how the monetary policy committee arrives at a decision: “This is part of our efforts to demystify the process and counter perceptions from the public that we just follow whatever the Sarb says.”

He adds the central bank will “make more of a concerted effort” to expand coverage to the remaining languages, including, Silozi, German and Tswana. It also intends to stage another monetary policy announcement outside Windhoek and is exploring developing a new ‘data platform’ for disseminating economic statistics.

The Central Banking Awards 2024 were written by Christopher Jeffery, Daniel Hinge, Dan Hardie, Joasia Popowicz, Ben Margulies, Riley Steward, Jimmy Choi and Blake Evans-Pritchard.