The draft law of the National Bank of Angola was approved with 118 votes in favor from the Popular Movement for the Liberation of Angola (MPLA), the Broad Convergence for the Salvation of Angola - Electoral Coalition (CASA-CE) and Social Renewal Party (PRS), and 26 abstentions from the National Union for the Total Independence of Angola (UNITA).
At the presentation of the legislative proposal, the BNA governor, José de Lima Massano, said that, following the structural reforms underway in the country and, in particular, in the financial sector, the modernization of the central bank is intended to clarify its mandate and review its model of intervention in the markets.
José de Lima Massano referred that, although Angola has rehearsed moments of price stability, the truth is that the inflation rate has remained systematically high and above the SADC macroeconomic convergence criteria.
"As is often said, inflation is the most unfair tax in any economy, because, although it negatively affects investment and consumption, it is in the quality of life of citizens with lower incomes, the most pernicious effects are verified," he said.
According to the governor, the bill introduces an adjustment in the institutional legal framework, now providing a statute that protects from interference or influence of any entities regarding its internal structure, operation, decision making and exercise of powers as a central bank and issuer, defining, meanwhile, general lines that regulate its activity.
From the point of view of functional autonomy in the performance of its main mission, continued José de Lima Massano, the BNA is now responsible for deciding which instruments it intends to use in the pursuit of objectives to preserve the value of the currency, through the Monetary Policy Committee.
For the stability of the financial system, a specific corporate body is created in the form of a Collegial Committee, whose responsibility is to define guidelines and strategies to mitigate systemic risk.
The proposal provides for the BNA to exercise the function of national macro-prudential supervisory authority, articulating actions with other financial system regulators, while also maintaining the functions of exchange authority, manager of international reserves, lender of last resort, supervisor and administrator of the Angolan payment system and regulator and supervisor of banking and certain non-banking financial institutions.
"From the point of view of personal autonomy, it is intended that the members of the BNA's decision-making bodies will have safeguards regarding their ability to make decisions without external influence, which translates into specific requirements for their designation and a minimum duration of their mandates, which will be differentiated from the duration of those of political power," he stressed.
According to the governor of the central bank, transparency and accountability "is of fundamental importance in this context," having been ensured in the draft law, "with profound changes in the governance and oversight model of the BNA.
"The board of directors gains supervisory powers, and now has non-executive directors in a majority position. The term of office of the central bank's governing and administrative bodies will be six years, renewable only once, in the case of executive members, while non-executive directors will not be eligible for reappointment, with the aim of ensuring exemption in the exercise of their supervisory and oversight duties," he said.
The Board of Directors is responsible for approving the budget and accounts, as well as the general supervision of the functioning of the BNA, which now has an Executive Committee responsible for day-to-day management.
On the other hand, the non-executive directors make up the Audit Committee, a body responsible for supervising the internal and external audit mechanisms, the overall effectiveness of the internal control systems, the integrity of the financial administration, as well as assessing the legality of the management acts of the central bank's bodies.
"The BNA's budget should be submitted for the knowledge of the executive branch by the 30th of November of each calendar year, the financial statements, which remain subject to independent external auditing, should be submitted to the executive branch by the 30th of March, the report and accounts and the external auditor's report should be published by the 30th of April of each calendar year," he said.
José de Lima Massano stressed that the BNA is subject to the rules of public procurement, being in this regard subject to the inspection action of the Court of Auditors, while quarterly the governor informs the President of the Republic of the objectives of monetary policy and semiannually presents to the holder of executive power and the National Assembly a report on the evolution of monetary policy indicators.
By opting for an independent central bank of issue, he added, it does not presuppose complete disregard for the objectives of economic development, nor its acting in a vacuum.
In this sense, the draft law maintains the possibility of granting credit to the national treasury, up to the equivalent of 10 percent of ordinary revenues collected in the previous year, and the BNA in the fulfillment of its mission may also buy and sell public debt securities in the secondary market and negotiate securities and other negotiable instruments in the regulated market.
In her explanation of vote, UNITA MP Mihaela Weba said that the reason for abstaining was due to the fact that, although the proposal intends to imply that henceforth the BNA will be independent from the executive, "strictly speaking this can only happen if there is a constitutional amendment, which limits the discretionary power of the President of the Republic to appoint and dismiss the governor and deputy governors of the National Bank, who may or may not end their terms without committing any criminal, disciplinary or civil offence.
