The COMESA Monetary Institute (CMI) is building the capacity of member central banks in Monetary Policy Formulation and Implementation in an Era of Inflation Targeting (IT) Regime. CMI has observed that IT has increasingly become a monetary policy framework of choice globally, including in emerging and developing countries hence the need for COMESA Member States not to be left out.

CMI Director Dr Jacob Njoroge states that notwithstanding the relatively weak institutions and less developed financial markets in developing countries, the IT framework needs to be embraced.

He noted that among the numerous merits of IT is that its adoption can be the source of strengthening of financial institutions and the development of financial markets rather than a precondition. This coupled with the rapid financial innovations and integration of financial markets, many countries, including those in the COMESA region, have transitioned or are in the process of transitioning to the IT framework.

“IT also solves the time inconsistency problem, reduces inflation variability, and can stabilize output. It also anchors expectations, reducing the inflationary impact of macroeconomic shocks,” Dr Njoroge added. This was during the training session held 19-23 May 2025 in Nairobi Kenya for representatives from seven COMESA Central Banks.

At the end of the training, participants noted that they had enhanced their knowledge on how Inflation targeting differs from other monetary policy frameworks, how the Forecasting and Policy Analysis System (FPAS) relates with inflation targeting framework and management of shocks and implementation challenges under the inflation targeting framework.

Participants also shared knowledge and experiences on each country’s journey in transitioning to and implementation of inflation targeting monetary policy framework. Participating countries included Egypt, Kenya, Malawi, Mauritius, Uganda, Zambia and Zimbabwe.