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AN EMPIRICAL ANALYSIS OF THE TRANSPARENCY OF MONETARY POLICY IN THE WEST AFRICAN MONETARY ZONE
Abstract
The paper examined the disclosure of explicit information by central banks using the transparency index method advocated by Ejiffinger and Geraats (2006) and Malik and Din (2008) as well as used by Egbuna (2013). A weighted transparency index of five key performance indicators (political, economic, procedural, policy and operational) was measure for each West African Monetary Zone (WAMZ) country. The result shows vast differences in the weighted transparency indexes across countries. The Gambia, Ghana and Nigeria are relatively transparent with overall weighted indexes of 9.5, 11 and 11.5. On the other hand transparency appears to be weak in Guinea, Liberia and Sierra Leone with indexes of 5.5, 2.0 and 6.0. This underscores the need to enhance central bank transparency in these countries.
Keywords: Central Banking, Monetary Policy, Monetary Policy transparency, Transparency Index, West African Monetary Zone