The Zambian president has come under fire for the abrupt sacking of the central bank governor in the midst of a debt crisis in the southern African nation whose resolution hinges on bailout talks with the IMF.
Denny Kalyalya was fired with immediate effect by Edgar Lungu on Saturday without an official reason being given, at a critical juncture for Africa’s second-biggest copper producer which is struggling to repay more than $11bn of government debts. He was replaced with Christopher Mvunga, a former deputy finance minister and banker.
In a statement on the sacking, the IMF on Monday said that “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,” the IMF added.
The independence of African central banks has come under the spotlight as the pandemic threatens to push many of the continent’s economies into their biggest downturns in decades and governments face funding pressures.
Access to the fund’s loans is widely seen as Zambia’s main route to avoiding default on its debts, which were borrowed to finance an infrastructure boom and large shares of which are owed to Chinese creditors and private bondholders.
