I believe that the three following core activities of central banks can have a substantial impact on the environment for doing business: maintaining price stability, maintaining a safe and efficient payment system, and supporting the development of the financial sector. 2. Price stability  Let us first consider price stability. Low and stable inflation rates allow the private sector to plan for the future, lead to a lower need for costly price adjustments, prevent tax distortions  BIS Review 110/2007  1  and thus create a stable business environment. On the other side, high and unstable inflation creates random wealth transfers between creditors and debtors. Since their fiscal base is weak, governments in Africa have often relied on seignorage to improve their income stream, creating high inflation rates as a by product. How has inflation developed throughout the continent in recent years? Figure 1 depicts inflation in Africa from 1990 to 2005. It displays inflation in South Africa, as well as the median inflation rates in 39 other sub-Saharan economies and in 5 North African economies. I focus on the median inflation rate because this measure is not sensitive to large outliers such as Zimbabwe. As you can see, inflation in Africa has trended downward over the past 15 years, with the exception being the aftermath of the Tequila crisis in 94/95. In South Africa and northern Africa inflation is now well below 5%, while sub-Saharan Africa also displays single digit inflation rate.
By the same token, let me stress the relevance of the Investment Survey conducted annually by the European Investment Bank since 2016, whose most recent results for Spain have been presented at this conference. This survey contributes to improving our knowledge of the dynamics of firms’ investment and investment finance. In particular, this source of information has proved very useful in identifying the main obstacles to investment. The high coverage of European firms in different countries allows for comparison of investment and investment finance developments across countries. In the context of the pandemic, the results of this survey are even more relevant since they allow us to better understand the implications of the COVID-19 shock for firms’ investment across Europe. To conclude, let me thank the European Investment Bank for partnering us in the organisation of this conference and, more in general, for their very good collaboration with us. I would also like to thank speakers and participants at the conference for such fruitful discussions. I’m convinced these debates are very useful for enriching our understanding of economic problems and for guiding policy makers as to the best possible design of economic policies to tackle them. Thank you. 2/2  BIS central bankers' speeches