Bank of Zambia

The Bank of Zambia (BoZ) is the central bank of Zambia and the country’s principal monetary and financial-sector authority. Its central mandate is to formulate and implement monetary policy in support of economic stability. The institution also issues and manages Zambia’s currency, provides banking and settlement services to the government and commercial banks, supervises banks and non-bank financial institutions, and oversees important aspects of the country’s payment and banking systems. The bank’s institutional lineage reaches back to the Southern Rhodesia Currency Board, established in 1937 in what is now Harare. That body’s jurisdiction extended across Northern Rhodesia, the territory that became Zambia, and Nyasaland, now Malawi. It was renamed the Currency Board of Rhodesia and Nyasaland in 1954 and became the Bank of Rhodesia and Nyasaland in 1956. In 1963, a Bank of Northern Rhodesia was formed from the Lusaka branch of the regional institution. Following Zambia’s independence, the Bank of Zambia was established in 1964, with its legal framework subsequently reinforced by the Bank of Zambia Act of 1965. Over its history, BoZ evolved from a primarily currency and banking institution into a modern central bank with responsibilities spanning monetary policy, financial regulation, reserve management, and national payment infrastructure. Earlier activities included equity participation in the Development Bank of Zambia and Zambia National Commercial Bank, reflecting a broader developmental role during periods when the financial system was less liberalized. Zambia’s shift toward multiparty politics and economic liberalization after 1991 changed the operating environment, including through privatization and reforms affecting the copper sector and wider financial system. The bank is also active in financial inclusion. It is a leading member of the Alliance for Financial Inclusion and was among the original 17 regulatory institutions to make national commitments under the Maya Declaration in 2011. Its responsibilities therefore extend beyond conventional interest-rate and currency functions to improving access to formal financial services and supporting a safer, more inclusive financial infrastructure. BoZ is governed by a board chaired by the governor. The board includes six other non-executive directors appointed by the Minister of Finance and National Planning, while the Secretary to the Treasury serves as a non-voting ex-officio member. The institution’s operating structure includes departments covering banking, currency and payment systems, bank supervision, economics, financial markets, non-bank financial institution supervision, legal services, information technology, risk management, and related corporate functions. The Bank of Zambia has also managed operational and cyber-security challenges. In 2022 it reported repelling a Hive ransomware attack, declining to pay a ransom and stating that the impact on its systems was limited. In July 2023, the bank reported that its Facebook account had been compromised. The institution additionally purchases locally produced gold from Kansanshi Copper Mine and Zambia Gold Company for reserve-management purposes. As Zambia’s monetary authority, BoZ remains central to the management of the kwacha, the regulation of financial institutions, and the resilience of the national financial system.

The Bank of Zambia developed from the colonial monetary institutions that served the territories of Southern Rhodesia, Northern Rhodesia, and Nyasaland. In 1937, the Southern Rhodesia Currency Board was established in Harare with responsibilities extending beyond Southern Rhodesia into the territories that later became Zambia and Malawi. The institution was renamed the Currency Board of Rhodesia and Nyasaland in 1954 and was transformed into the Bank of Rhodesia and Nyasaland in 1956. A separate Bank of Northern Rhodesia was created in 1963 from the Lusaka branch of the regional bank. Following Zambia’s independence, this institution became the Bank of Zambia in 1964. The Bank of Zambia Act of 1965 provided an important statutory foundation for its operations and authority. During its earlier decades, the bank combined conventional central-bank functions with a developmental role. It acquired equity interests in the Development Bank of Zambia and Zambia National Commercial Bank and considered wider involvement in economic sectors, including agriculture. The political and economic transition beginning in 1991 reshaped the bank’s environment. The Movement for Multi-party Democracy replaced the United National Independence Party after 27 years in power, and the new administration pursued economic liberalization and privatization. Reforms included the privatization of major state assets and changes in the copper industry, including the restructuring of Zambia Consolidated Copper Mines. These changes increased the importance of market-oriented monetary management, financial regulation, and oversight of a liberalizing banking sector. Over time, BoZ refined its organizational structure around core central-bank activities. Functions that could be contracted externally, including certain security, catering, maintenance, and club services, were reduced or outsourced, while policy, supervisory, financial-market, technology, legal, and risk-management capabilities became more prominent. The institution’s departments cover banking, currency and payment systems, bank supervision, economics, finance, financial markets, non-bank financial institution supervision, information technology, internal audit, legal affairs, strategy, risk management, and related operations. Financial inclusion became an increasingly visible part of the bank’s policy role. BoZ joined the Alliance for Financial Inclusion and was among the first group of regulatory institutions to make specific national commitments under the Maya Declaration at the 2011 Global Policy Forum in Mexico. This positioned the bank not only as a guardian of monetary and financial stability but also as an institution supporting broader participation in formal financial services. The Bank of Zambia’s governance framework was further addressed by the Bank of Zambia Act No. 5 of 2022. Under the framework described in the reference material, the governor serves a six-year term that may be renewed for another six years following presidential nomination and confirmation by the National Assembly. The legislation also provides tenure protections and a tribunal process for allegations involving the governor or deputy governors, intended to reinforce central-bank independence. BoZ has continued to manage national currency, monetary policy, financial institutions, payment systems, and official reserves. Its reserve-management activities include purchases of locally produced gold from Kansanshi Copper Mine and Zambia Gold Company. The institution has also faced cyber-security incidents, including a reported Hive ransomware attack in 2022 and compromise of its Facebook account in 2023. The bank said it did not pay the ransomware demand and that the technical impact was limited. Today, it remains Zambia’s principal authority for monetary policy and the stability and supervision of the national financial system.

• 2022

  New central-bank legislation

  [1]Bank of Zambiaen.wikipedia.org

  Bank of Zambia Act No. 5 of 2022 introduced updated provisions concerning governor appointments, tenure, and institutional independence.

• 2011

  Maya Declaration commitment

  [1]Bank of Zambiaen.wikipedia.org

  BoZ became one of the original 17 regulatory institutions to make a specific national financial-inclusion commitment under the Maya Declaration.

• 1965

  Bank of Zambia Act enacted

  [1]Bank of Zambiaen.wikipedia.org

  The Bank of Zambia Act supplied a statutory basis for the institution’s authority and operations.

• 1964

  Bank of Zambia established

  [1]Bank of Zambiaen.wikipedia.org

  Following Zambia’s independence, the Bank of Zambia was created as the country’s central bank.

• 1963

  Bank of Northern Rhodesia formed

  [1]Bank of Zambiaen.wikipedia.org

  A Bank of Northern Rhodesia was formed from the Lusaka branch of the regional institution.

• 1956

  Regional bank created

  [1]Bank of Zambiaen.wikipedia.org

  The currency board was transformed into the Bank of Rhodesia and Nyasaland.

• 1954

  Currency Board renamed

  [1]Bank of Zambiaen.wikipedia.org

  The Southern Rhodesia Currency Board became the Currency Board of Rhodesia and Nyasaland.

• 1937

  Southern Rhodesia Currency Board established

  [1]Bank of Zambiaen.wikipedia.org

  The institution’s historical lineage began with a currency board based in Harare whose jurisdiction included Northern Rhodesia and Nyasaland.

Zambia’s sovereign monetary authority and prudential regulator, combining central banking, currency management, financial supervision, payment-system oversight, and financial-inclusion policy.

• Currency

  Zambian kwacha

  The Bank of Zambia issues and manages Zambia’s national currency, the kwacha. Currency management forms one of the institution’s foundational responsibilities and is linked to monetary-policy implementation, payment-system functioning, and confidence in the national financial system.

• Central banking · 1964

  Monetary policy

  BoZ formulates and implements monetary policy intended to support macroeconomic and monetary stability. This function places the bank at the center of decisions affecting liquidity, interest-rate conditions, inflation management, and the wider operating environment for Zambia’s economy.

• Financial regulation · 1964

  Banking and financial-institution supervision

  The bank licenses, regulates, and supervises commercial banks and other financial-service institutions. Its supervisory remit is intended to promote a safe and sound financial system and includes dedicated functions for banks and non-bank financial institutions.

• Financial infrastructure · 1964

  Payment and settlement services

  BoZ provides banking services to the government and commercial banks and acts as a settlement agent. It also manages or oversees banking, currency, and payment-system operations that support the movement and settlement of funds within Zambia’s financial system.

• Financial inclusion · 2011

  Financial inclusion policy

  Through its participation in the Alliance for Financial Inclusion and the Maya Declaration, BoZ supports policies aimed at expanding access to appropriate formal financial services and strengthening inclusion within Zambia’s financial system.

• 2023

  Facebook account compromise

  The bank reported that its Facebook account was hacked in July 2023. The incident affected a public communications channel rather than being described as a compromise of the bank’s core systems.

  Source

• 2022

  Hive ransomware attack

  The Bank of Zambia reported that it repelled an attack associated with the Hive ransomware group. The bank said it declined to pay the ransom and that the breach caused limited damage to its systems.

  Source

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• 2022

  Updated central-bank governance frameworkStrategy

  Background

  The Bank of Zambia Act No. 5 of 2022 addressed the appointment, tenure, and protection of the governor and deputy governors.

  Action taken

  The legislation established six-year governor terms that may be renewed and provided a tribunal process for allegations involving senior central-bank officials.

  Aftermath

  The framework was intended to strengthen security of tenure and the operational independence of the central bank.

  Source

• 2022

  Decision not to pay ransomware demandOther

  Background

  BoZ faced a reported Hive ransomware incident affecting its digital environment.

  Action taken

  The bank said it declined to pay the ransom and focused on containing the incident.

  Aftermath

  BoZ reported that the attack caused minimal damage to its systems.

  Source

• 2011

  Commitment to financial inclusionStrategy

  Background

  Financial inclusion became an expanding policy priority for central banks and financial regulators internationally.

  Action taken

  BoZ made a national commitment under the Maya Declaration and continued participating in the Alliance for Financial Inclusion.

  Aftermath

  Financial inclusion became an identifiable part of the bank’s policy and regulatory profile alongside monetary and financial stability.

  Source

• 1964

  Establishment as Zambia’s central bankStrategy

  Background

  Zambia’s independence created the need for a national monetary authority to replace the preceding colonial and regional banking arrangements.

  Action taken

  The Bank of Zambia was created from the Bank of Northern Rhodesia and assumed central-bank responsibilities for the newly independent country.

  Aftermath

  BoZ became responsible for currency, monetary policy, government banking, banking supervision, and financial-system operations in Zambia.

  Source

1. 1Bank of Zambiaen.wikipedia.org
2. 2Bank of Zambia official websiteboz.zm