Economists have expressed serious concerns at the vacuum created at the Central Bank following the dissolution of the Bank of Zambia Board and the dismissal of the Governor, Dr. Caleb Fundanga.
Dr. Fundanga is a distinguished banker who was voted Central Banker of the Year for Global and Africa, in 2007 by two major financial publications.
He also served on the IMF Board as Alternate Governor. He previously served at the African Development Bank (ADB) as an Executive Director.
When Mr. Sata came into office, he fired the Governor. He also dissolved the Board. Sata fired Fundanga for his earlier decisions regarding the take over and consequent sale of Finance Bank of Zambia.
The Central Bank is responsible for managing the economic and financial systems of the Country. It also formulates and implements monetary policy on behalf of the country. It also acts as manager of the national treasury, and banker to the government. The Central Bank also works closely with the Office of the Secretary to the Treasury which Mr. Sata abolished but has since rescinded his decision.
Mr. Sata has appointed veteran banker, Dr. Bwalya Ngandu as Deputy Governor. Ngandu is now acting as Governor and is earmarked for the substantive position. Mr. Sata fired Dr. Austin Mwape to pave way for Ngandu. Ngandu will require parliamentary ratification and validation of his qualifications.
Concerns and disquiet has arisen over the appointment of Ngandu. Experts and the International Monetary Fund (IMF) have objected to Ngandu being Governor as his pedigree is low and he is not qualified to hold such a position. Ngandu, who is an industrial psychologist by training, previously worked for ZCCM and Barclays Bank as a Human Resource officer. He later worked for the National Savings Credit Bank (NSCB) as Chief Executive Officer.
Ngandu later worked for the Development Bank of Zambia (DBZ) as Chief Executive Officer but was fired by late President Mwanawasa for his alleged corrupt dealings in relations to loans given shady companies.
Currently, the Central Bank is operating without the Board and Governor not only symbolic figures for economic stability but the offices play a key role in the affairs of the Bank and government monetary policy.
“This vacuum has been created by the President, who fired Dr. Fundanga without the due process of the law. It is more alarming that this was done without consideration to the harm being done to the economy and without a qualified successor in sight.” An economist lamented.
“Key indicators such as inflation, bank interest rates, and yields on government bonds are showing negative signs due to the uncertainty created in the market by arbitrary decisions such as this one”. He said.
From the Zambian Inquierer