African central banks face growing political pressures

Significance

The move confirms long-held suspicions that the BoZ is subject to considerable political interference, which has increased as COVID-19 exacerbates the economic pressure on the ruling Patriotic Front (PF) government. Similar concerns have been raised to differing degrees about Nigeria and Zimbabwe.

Impacts

• Rising inflation will be compounded by looser monetary policy, eroding the real value of wages over time, increasing food staple costs.
• Weakening central bank oversight could lead to greater diversion of COVID-19 relief funds.
• In the absence of international financial assistance, Lungu will find it extremely difficult to revive his flagging popularity.