The Zambian presidency reported in a statement last weekend the dismissal with immediate effect of Denny Kalyalya (pictured), the central bank governor. The reasons for such a decision were not disclosed but the announcement comes as a surprise for many observers. Zambia-based economist Trevor Simumba told Bloomberg it “sends a very negative signal” to investors.

The sacked governor previously served at the World Bank Group and took office as governor of the central bank of Zambia since 2015. In 2018, he had his term extended for 5 years until 2023. With the coronavirus crisis that added up to an already weak economic context mainly marked by alarming inflation, Denny Kalyalya decided, three days before his dismissal, to cut the bank’s key benchmark rate to 8%. The strategy was aimed at safeguarding the stability of the financial sector and helping households to better pull through the crisis.

According to the government, the new boss of the central bank (subject to validation by the house of Representatives) will be Christopher Mvunga, a former executive at Standard Chartered Plc and Standard Bank Group Ltd. He is also a former deputy finance minister.

For 2020, the Zambian economic growth is expected at -4.2% partly due to the continued depreciation of the local currency against the US dollar.

Moutiou Adjibi Nourou