July 14, 2024

IMF criticizes summary dismissal of governor of central bank of Zambia Denny Kalyalya

Denny Kalyalya
Denny Kalyalya

The International Monetary Fund (IMF) on Monday reacted to a surprising change in leadership at Zambia’s central bank, saying that central banks’ operational independence and credibility should be maintained.

A spokesman at the IMF said: “We note the change in leadership announced over the weekend at the Bank of Zambia before the end of the previous Governor’s mandate.

“The macroeconomic stability that most developing countries have enjoyed in recent years has greatly relied on the much-improved effectiveness and increased independence of central banks.

“It is imperative that central banks’ operational independence and credibility is maintained, particularly at this critical time when economic stability is threatened by the COVID-19 pandemic.

“Without credible institutions and sound policies, sustained economic growth and much needed improvements in living standards will not be possible.”

Zambian President Edgar Lungu on Saturday dismissed central bank governor Denny Kalyalya and replaced him with former deputy finance minister Christopher Mphanza Mvunga.

“President Lungu has terminated the contract of Bank of Zambia governor Dr Denny Kalyalya with immediate effect,” the presidency said in statement without providing any reasons for the dismissal.

Kalyalya previously served as a World Bank executive director.

He was appointed in February 2015 and had his contract extended in 2018 until 2023.

The dismissal of Kalyalya has triggered strong reactions in Africa.

On Monday, South Africa’s President, Cyril Ramaphosa, strongly reprimanded the Minister of Finance, Mr. Tito Mboweni, following comments made by the Minister on social media regarding the removal of Zambia’s Central Bank Governor by President Edgar Lungu.

In one of his tweets, Minister Mboweni is promising to mobilize if not given reasons why the Central Governor has been fired by President Lungu.

“President Ramaphosa wishes to assure the government and people of the Republic of Zambia that the unfortunate remarks do not reflect the views of the South African Government and its people,” the presidency in South Africa said in a statement.

“The issue is being addressed to ensure that such an incident does not occur again,” it added.  

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