Effect of central banks’ governance on Monetary policy: A cross-sectional analysis of selected sub-saharan african central banks

The objective of the study was to investigate the effect of governance on monetary policy objective. The research was conducted through a cross-sectional analysis. A sample was obtained from the selected 16 Sub-Saharan African central banks websites. The target populations were 52 Sub-Saharan African countries where only 16 countries were selected for the study because of the data constrains. The websites of central banks from 1996 to 2011 were used which the researcher selected a maximum of 288 observations. The selected countries were reached through convenience sampling procedure for the study. The study used reports from central banks to gather pertinent data. Data Analysis was analyzed through the use of qualitative and quantitative analysis. Regression model was estimated using the random effects methods and tested by the Hausman random effects. ANOVA was used to test for differences among the means of the populations by examining the amount of variations between each of the samples, relative to the amount of variation between the samples. The findings suggest that governance proxy is another measure of central bank independence from the politician that results to appointment and dismissal of governor's turnover rate in office because of the election cycles. The study recommended that high inflation has adverse effects on economic performance either by creating distortions, encouraging rent seeking activity, or by raising risk premier, one would expect central bank independence to improve economic performance.