• There was an expectation that existing bank of Zambia Act would undergo some revision following 2016 constitutional amendment.
• There is framework for corporation that is in existence within SADC.
• The mandate and structure of Central banks are matters outlined in the legal framework.

Bank of Zambia Governor (BOZ) says there was an expectation that the existing Bank of Zambia Act would undergo some revision to make it relevant to the provision of the constitution following the 2016 constitutional amendment, however that delayed.

Speaking before the Committee on National Economy, Trade and Labour on consideration of the Bank of Zambia Bill, Dr. Denny Kalyalya noted the constitution bestowed operational autonomy on the bank, however to that point the bank did not have any legally enshrined operation autonomy as it operated mainly on basis of relationships that the governed and minister of finance had.

Dr. Kalyalya noted even without the legal provision, since 1996 there have been good working relationships between the bank and various Ministers of Finance.

“But in 2016 the country saw it fit to actually provide that in the law and that is what we have here as article Two One Three sub section five which states that ‘the bank of Zambia shall not be subject to the direction of control of the person or an authority in the performance of its function,” said Dr. Kalyalya.

He noted need to enhance other acts of Governance notably transparency and accountability elements which the bill addresses having granted that operational autonomy.

Dr. Kalyalya has further noted that there is framework for corporation that is in existence within the Southern African Development Community (SADC) that has made it necessary for the Bank of Zambia Act to be amended.

He explained one of the aspirations in the context was to harmonize the laws particularly as they pertain to the way central Banks operate.

“Chair as I speak to you now there is actually a meeting of the committee of Central Bank Governors going on virtual on various aspects that we corporate on,” he said.

He explained that with the Finance and Investment Protocol entered into around 1995 by SADC Heads of state with responsibility of chairing under South African Reserve Bank, it was agreed that Central Banks should work towards establishing a legal framework that will govern operations of Central Banks resulting into what is called ‘The Model Central Bank Law.’

“Given that and the changes in our constitution when we take them together, this is the driving forces behind the changes that we are bringing before the committee chair,” Dr. Kalyala explained.

According to him, “One of the things that these provisions of the Model law is really to try and domesticate some of those but it was recognized too that you cannot take everything as to the later but the principles underlying that Model where important to be taken into account in whatever amendments where made to our existing legislation.”

The Bank for Zambia Governor has also indicated that Central Banks are public policy institutions whose main goals are to preserve price stability and promote financial stability, provide core components of payment systems through accounts they maintain at the central bank and often manage the countries gold and foreign exchange reserves.

Dr. Kalyala stated that Central Banks in corporation with other Authorities play a major role the oversight and development of the financial system to support financial stability that is essential to the orderly functioning of an economy.

He noted the mandate and structure of Central banks are matters outlined in the legal framework that is employed to create them, in the case of Zambia Bank of Zambia Act no. 43 of 1996 as read together with constitution amend mint act no.2 of 2016.