Zambia’s central bank governor has been fired by president Edgar Lungu , less than a week after he warned of the country’s growing economic difficulties.
Lungu appointed the deputy secretary to the cabinet’s finance and economic development department, Christopher Mvunga in the interim.
The move comes at a critical time for the Zambian economy, which is forecast to contract by 4.2% this year with annual inflation lingering near 16%. Debt is soaring and the fiscal deficit rapidly increasing as the coronavirus pandemic curbs revenue.
Lungu’s decision drew criticism from economists, and even South African Finance Minister Tito Mboweni.
Kalyalya was appointed in February 2015 and had his contract extended in 2018 until 2023.
His dismissal comes days after the central bank cut its lending rate by 125 basis points to 8.0% to try to safeguard financial sector stability and protect the country Covid-19 pandemic.
Mvunga, seen by political analysts a close friend of the president, worked as a senior auditor at Deloitte & Touche between 1988 and 1993 before joining the banking sector.