President Hakainde Hichilema has signed into law a new legislation that will protect the Central Bank Governor and his deputies from being fired without valid reasons.
The new law – Bank of Zambia (BOZ) Act No. 5 of 2022 – will require the President to setup a three-man tribunal headed by Judge or former Judge to probe any allegations leveled against the Bank of Zambia (BOZ) Governor or his deputies before being sacked from their positions.
“The President shall remove the Governor or Deputy Governor from office if the tribunal recommends to the President that the Governor or Deputy Governor should be removed,” reads section 13(7) of the Act.
Other two members of the tribunal should be persons with knowledge and experience in the field of central banking or economics, finance, law or any other field that is related to Central bank.
Unlike in the past where President could fire the Governor without reasons, the new law states that Governor and his deputies can only be sacked for “gross misconduct, incompetent, bankrupt” or if he is convicted and imprisoned for a term of not less than six months.
In short, the Governor and his deputies have been given security of tenure like that of the judges and the DPP so that they can perform their functions without interference.
The new BOZ Act came into effect few weeks ago following the assent by President Hakainde. The law was recently unanimously passed in Parliament and was only waiting for the presidential assent to become law.
The new BOZ Act has also put the tenure of office of the Governor as six years, which will be renewable for further term of six years.
The passing of this law follows the Constitution amendment of 2016, which among other things, restricted the position of Governor to few professionals. Under Article 214 of the Constitution, only person who is an economist, banker, accountant, finance or lawyer or a field related to banking can be appointed Governor of BOZ.
The new law has replaced the 1996 BOZ Act and it looks progressive and has interesting and innovative provisions that will enhance the performance and independence of the bank.
With these new amendments, politicians will have difficulties to interfere with the operations of the bank.
©️ Dickson Jere