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Thursday, October 28, 2021

President Hakainde Hichilem appoints Dr. Denny Kalyalya as Bank of Zambia Governor

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President Hakainde Hichilema upon returning home from the trip to the US has made three appointments, one of the key ones is the re-appointment or Dr. Denny Kalyalya as Bank of Zambia Governor.

Dr. Kalyalya is a former President Edgar Lungu’s appointee who fell out of favour in the last hours of his presidency. We have done some research on why Dr. Kalyalya’s appointment is being viewed as controversial and below are the top five reasons:

  1. When Dr. Denny Kalyalya was first appointed as BOZ Governor in February 2015, Zambia’s currency exchange rate was about K5.3 per US dollar and by the time he was sacked, the local unit had depreciated to about K22.5 per US dollar; is this a good record to defend and say that the re-appointment has been made on merit?

  2. When Dr. Kalyalya was appointed as Governor in 2015, Zambia’s international reserves stood at about US$3 billion, by the time he left the post, it was at one of its all time lows of US$1.3 billion and less than the recommended 3 months import cover. Could he had done better to defend the country’s reserves than hold on for the sake of protecting his job? Is this a strong performance and integrity record?

  3. Monetary policy in Zambia adopted an inflation targeting system, but when Dr. Kalyalya was appointed, in February 2015, Zambia’s annual inflation rate was in the single digit range and stood at about 7%, at the time of his sacking by former President Lungu, the inflation rate for the country had climbed to double-digit and well over 15% – was the Monetary Policy he pretended on helpful to the Zambian economy?

  4. When Zambia discovered notable gold reserves at Kasenseli – Mwinilunga, establishing national gold reserves at BOZ did not move at a higher and faster pace and this was reported to have not received top leadership prioritization and support, this was during Dr. Kalyalya time as Governor. Do you think he did a good job of establishing alternative reserves in gold?

  5. When you look at banks, micro-financial services providers, and market lending rate as at February 2015, lending rates in Zambian based lenders were below 15% per annum and by the time Dr. Kalyalya was sacked, lending rates in banks and other financiers for consumers had spiked to above 27%? Was this also something that was beyond his call to resign on moral grounds?

It is also acknowledged that Dr. Kalyalya was only responsible for the Monetary Policy side and there is an argument that the problems Zambia encountered were largely on account of lapses on the fiscal policy side.

But it can be counterargued that Dr. Kalyalya should or ought to have resigned to show the public that his efforts on the monetary side were being hampered by the fiscal side and that he was not a willing partner of the former government’s actions or is it inactions.

This is perhaps why this appointment is being seen as controversial by some inquisitive minds- This is why there are calls for de-classifying reasons behind Dr. Kalyalya sacking by former President Lungu so that he can be fully and publicly exonerated.

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