Reuters reports that Zambia’s New Central Bank Governor Christopher Mvunga said on Tuesday that he will uphold the operational independence of the Bank of Zambia in line with the law.
Zambian President Edgar Lungu summarily dismissed central bank governor Denny Kalyalya on Aug. 22 and replaced him with Mvunga, a former deputy finance minister.
The unexplained removal of the respected Bank of Zambia governor was controversial locally and globally, with critics saying it undermined the independence of the central bank.
The International Monetary Fund responded to the decision in August by saying that developing countries had enjoyed prosperity in recent years partly as a result of increased central bank independence.
“I would like to assure all stakeholders that the operational independence of the central bank will be retained,” Mvunga told media after he was sworn in.
“It will be in line with the relevant legislation such as the Bank of Zambia Act and also in line with the international best practice,” Mvunga added.
In a statement after the swearing in, Lungu urged Mvunga to work closely with the Finance ministry to stabilise the economy.
Lungu said there was need to stabilise the local currency and find more efficient ways of financing the purchase of farm inputs for small-scale farmers and managing oil procurement.
“The current efforts to address debt sustainability and reduce the country’s debt need to be sustained and a successful outcome achieved,” Lungu said.
Kalyalya, previously a World Bank executive director, was appointed in February 2015 and his contract was extended for five years in 2018.
Seen by political analysts as an ally and close friend of Lungu, Mvunga was most recently deputy secretary to the cabinet in the finance and economic development unit.
He was a senior auditor at Deloitte between 1988 and 1993 before working in the banking sector.