Do commodity price shocks impact central bank governors' removals? Evidence from Africa

Using data from 1980 to 2018 for 32 African countries (13 CFA countries and 19 non-CFA countries) and a conditional fixed effects logit model, this paper examines the effect of commodity price shocks on the likelihood of a central bank governor removal. Governor removals are decomposed into premature removals and ally replacements. Our results show that commodity price shocks lead to a statistically significant increase in the probability of a central bank governor's premature removal and ally replacement. This trend holds when commodities price shocks are separated into oil/mineral shocks and agricultural commodities shocks. We also find that this probability significantly jumps for countries who have a lower degree of export diversification, that is, countries whose are primarily dependent on a single commodity.