The International Monetary Fund has called on developing countries to ensure the independence of central banks as one of the cornerstones of their efforts to attain macroeconomic stability in the face of the coronavirus pandemic.
In a statement issued in the wake of the dismissal of Bank of Zambia governor Denny Kalyalya last Saturday, the IMF said it has noted “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,” the Fund said on Tuesday.
It warned that without credible institutions and sound policies, sustained economic growth would remain a pipe dream for most developing nations.
Kalyalya’s contract was abruptly terminated by President Edgar Lungu and no reason was given for the dismissal.
The IMF stance appeared to side with the response by South Africa’s Finance Minister Tito Mboweni who slammed Lungu for terminating Kalyalya’s contract.
In a series of tweets, Mboweni said “presidents in Africa must stop this nonsense of waking up in the morning and fire a central bank governor!”
Mboweni has however been reprimanded by President Cyril Ramaphosa for behaviour considered to be undiplomatic.