‘We learnt the hard way’, says Zambia’s Central Bank Governor Denny Kalyalya - The Africa Report

Zambia's central bank leadership has acknowledged critical policy missteps in recent years, signalling a potential recalibration of monetary governance at a pivotal moment for the nation's economic recovery. Meanwhile, diplomatic intervention in the Democratic Republic of Congo's protracted conflict underscores the persistent political instability threatening the region's investment climate. Together, these developments present a mixed picture for European investors navigating sub-Saharan Africa's most volatile markets. Governor Denny Kalyalya's candid admission that Zambia "learnt the hard way" reflects the painful lessons of hyperinflation and currency depreciation that ravaged the economy in recent years. Zambia's kwacha lost over 80% of its value between 2020 and 2023, and inflation peaked above 300% before moderating. These catastrophic outcomes stemmed from loose monetary policy, foreign exchange mismanagement, and the cascading effects of sovereign debt distress. The country's 2023 debt restructuring agreement with creditors has created space for orthodox monetary policy, but implementation remains fragile. For European investors, Kalyalya's acknowledgement suggests a genuine commitment to discipline—but also highlights institutional vulnerabilities. The central bank's previous failures weren't merely technical; they reflected weak institutional independence and political pressure to monetise fiscal deficits. While current reforms are welcome, European investors should remain cautious about the sustainability of policy consistency,