Over the past five years, Mrs Rekha Chifuwe Mhango has been in charge of Administration, as Deputy Governor, Bank of Zambia. A seasoned human resource practitioner and lawyer, she has been instrumental in facilitating the achievement of sustainable corporate governance and driving strategic change within the Bank. She has also led the Bank’s initiatives and policies aimed at enhancing financial inclusion as well as adoption and use of digital technologies in delivering solutions across the institution.
In this exclusive interview, Mrs Mhango gives insight on the Bank of Zambia’s capacity-building and other efforts to effectively serve the financial sector and ordinary citizens.
To what extent would the recently released 2024 – 2027 Strategic Plan boost efficiency and productivity at the Bank of Zambia?
The Bank’s strategic plan has four key pillars, namely, price stability, financial stability, financial inclusion, as well as organisational resilience and growth. Of the four pillars, organisational resilience and growth largely demonstrates our recognition that our people are our most valuable resource, which we strive to develop as productive human capital. The primary focus of this pillar is the evaluation of our internal policies and practices and re-organisation of the Bank’s structure to enhance operational efficiency and decision making. The Bank is also exploring technologies that will enhance our existing business model and facilitate efficient and effective delivery of our mandate. In this regard, we are keeping a close eye on advancements in AI and machine learning while leveraging our ICT investments. We are developing policies to guide the adoption of new technologies and facilitate implementation of desired solutions throughout the Bank. In view of the challenges associated with providing regulatory oversight in this fast-paced environment, we strive to be ahead of the curve in terms of providing solutions that are purposeful and market-fit.
How do you assess the current culture to see if it serves the Bank’s purpose and help it to achieve its strategic initiatives?
The Bank is committed to nurturing a culture that is based on its values and principles. A culture audit was done ahead of the implementation of the current Strategic Plan. Following this audit, the Bank developed a culture remodelling concept paper which included ideas on potential areas of improvement and initiatives to be implemented in the Bank. The Bank remains positive about its current leadership qualities across the institution and is confident about the process of developing future-ready leadership competencies. Having said that, we therefore have no doubt in the interventions we have implemented and continue to implement regarding our people, procedures, organisational structure, and technological skills. We envision employees, while operating in an agile conducive environment, to possess the right skills and competencies that will in turn enable us to witness a notable boost in productivity and general efficiency throughout the Bank.
Could you throw more light on the Bank of Zambia’s capacity-building efforts to prepare its workforce for modern technology tools like ICT and AI as required in a digitalised world?
As I have mentioned, the Bank’s 2024–2027 Strategic Plan includes a number of initiatives, most of which are focused on investing in cutting-edge technology and digital transformation. The Bank has initiated a number of digitalisation projects, including data warehousing, currency automation, electronic document management, and enterprise resource planning (ERP) to enhance decision making. In line with our efforts to build capacity among our staff, we are working closely with peer central banks that are at advanced stages of digitalisation. Our peer central banks have provided us with peer learning opportunities on how to implement these digital solutions. Critical knowledge and skills are acquired from these institutions. At the moment, we consider the ICT department to be the bedrock of our digitisation journey. We have to this end expanded the Department to facilitate implementation of our digital initiatives. We are also looking to build capacity to facilitate in-house development and management of some of the IT infrastructure and also be central in the roll-out of certain technologies to Financial Service Providers (FSPs). Additionally, we are actively developing skills to respond proactively to cyber security challenges, which are becoming rampant in the global financial sector.
Most African countries trying to go digital face the challenge of owning some of these technologies since most are imported. To what extent are you indigenising the technologies?
Indeed, we recognise that ownership challenges for some of the ICT solutions being implemented may exist. We have, therefore, established an ICT development team as part of the overall framework, allowing us to develop our own skills. As I earlier alluded to, we have also benefited from peer learning experiences and successes of other central banks. Members of our team have visited various countries including Tanzania, Rwanda, Malawi, Mozambique, Mauritius, South Africa, Kenya, Croatia, Portugal, among others, to learn from them how they are implementing and operationalizing these ICT solutions.
In other words, the process of indigenising some of these solutions is ongoing?
Indeed. We have realised from previous ICT solutions we have acquired that we require support from the developers. When we are having challenges with deployed systems, we have heavily relied on their expertise and support. However, in order to guarantee skills transfers and reduce our dependency on the providers of these solutions, we are now strategically incorporating elements of skills development as part of the agreements.
What effort is the Bank of Zambia making to educate the public on financial scams in view of increased use of digital financial services?
As part of our financial inclusion agenda, we launched the Digital Financial Services Campaign in 2016 with the goal of enlightening people about the benefits of embracing digitisation. We also started the “Go Cashless” campaign in 2022. Through these campaigns, we are raising public awareness on the advantages of using digital financial services as well as the safeguards to observe. Scams do exist and are on the rise. So, as a central bank, we are likewise vigilant. Further, the regulatory framework, which covers aspects of cyber security, issuance of electronic money, and resolution of complaints, has been enhanced. We are also continuously monitoring regulated entities, which are required to ensure that they identify and report suspicious transactions as well as put in place fraud detection mechanisms to safeguard the integrity of the DFS ecosystem. Furthermore, in 2022, the Bank working in collaboration with the Zambia Information and Communications Technology Authority (ZICTA) and other stakeholders developed an information sharing framework to enhance oversight and supervision of DFS, which has improved the exchange of information.
So, you normally share it?
Yes, we do share information with stakeholders on some of the frauds that are being detected. This is in order to safeguard the financial system. We also have an internal Strategic Plan, which in addition to the National Payment System Vision and Strategy, addresses issues of cyber security standards to ensure that the financial sector remains resilient.
How do you think the ‘Go Cashless’ Campaign will affect countrywide transactions, particularly in the rural areas?
The “Go Cashless” campaign was launched in 2022, and it is still ongoing. Through this campaign, we are attempting to accelerate the adoption of digital financial services, especially in the most remote areas. Increased financial inclusion is the goal in this case. Our focus is on how we can bring everyone on board in the fastest and safest manner possible. Accessibility, security and convenience have been the main message of our campaign. Over the years, we have seen substantial growth of DFS in Zambia, which has greatly contributed to financial inclusion. Digital financial services have made it possible for people to make payments while still feeling comfortable in their homes. And this has been the case even for the rural areas. People are able to use the services as long as there is reliable network coverage. Additionally, compared to traditional paper money, using digital financial payments is associated with lower risks.
Digital financial services is good for educated people. But a lot of rural folks are not that enlightened and may find it difficult to use it. How do you address that?
That is the essence of the sensitisations. So, it goes hand-in-hand. Sensitisation is important for people to effectively use digital financial services. For this reason, the service providers are also involved. It is a team endeavor. As the regulator, the central bank is where it all begins.
Sensitisation, which is a form of education, is bridging the gap. What has been the impact of the “Go Cashless” campaign on the Zambian financial sector?
The expansion of digital financial services in Zambia can be attributed to the “Go Cashless” campaign and other initiatives undertaken by the Bank of Zambia in collaboration with key stakeholders. A FinScope survey conducted in 2020 revealed an overall improvement in financial inclusion from 59.3% in 2015 to 69.4% in 2020. Between 2014 and 2023, we saw a growth of almost 1,427.8% in the retail use of digital and card payments, growing from 52.4 billion Kwacha to 801 billion Kwacha. Starting in 2025, we will be conducting another FinScope Survey, and based on all the signs, these numbers would likely be substantially higher.
The Bank promoted financial education by publishing additional books for pupils in grades 1–12. These books have been integrated into the school curriculum and translated into seven local languages for grades 1–4.
What informed this decision?
Improving financial literacy is the key to it. We collaborated with the financial sector and other stakeholders to support the Ministry of Finance and National Planning in publishing the financial education supplementary material because it is part of the broader efforts to promote financial literacy, and ultimately, inclusion. Our focus is to ensure that learners are exposed to this information so that as they grow up, they can make sound financial decisions.
So, it is more like catch them young?
Yes. We want to mould their behaviour and way of thinking while they are still young. So, it helps them to be wiser in terms of financial decisions.The children benefit from these books by gaining a foundational understanding, which they can then use as they get older. The learners will develop critical thinking skills and apply quantitative reasoning as they make financial decisions. The Ministry of Education has incorporated these texts into the curriculum. Our true goal is to address the nation’s long-overdue demand for a thorough financial education programme. As you mentioned, I believe that if we catch them young, the economy will ultimately gain from having more financially literate citizens.
Foreign investors desirous of coming to Zambia to invest would like to be assured of capacity. Are you confident that you are developing a skilled workforce for the financial sector?
Indeed, we are. As a country, we have reputable banking and financial institutions. Most if not all of our major universities offer the Banking and Finance first degree. We often run banking and finance programmes through the Institute of Banking and Financial Services. Thus, those also support the curriculum for the training of future bankers on an ongoing basis. As a central bank, we also recognise that it takes a long time to develop a central banker. We therefore have intentional learning and development policies, whereby we assist our employees on an ongoing basis from the point of onboarding until they are ready to take on the management and leadership roles in the Bank. It takes on average, in my opinion, 15 to 20 years to develop a central banker. We introduce our employees to organisations in Africa and around the world that offer capacity building programmes tailored around the principles of central banking. We are glad to share with you that due to the great potential that our staff possess, we have had some of them take on roles in other reputable institutions such as the World Bank, International Monetary Fund (IMF), the Macroeconomic and Financial Management Institute of Eastern and Southern Africa, Central Bank of England, and the African Development Bank, among others. This shows that our people have the capacity to not only work but excel in any environment.