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Examining The Role of Commercial Banks’ Treasury Departments in Managing Long-Term Liquidity in Zambia: Case Study of Zambia National Commercial Bank Plc (ZANACO)

Author

Listed:
  • Simumba, Peter

    (Graduate School of Business, University of Zambia)

  • Mwange, Austin

    (Graduate School of Business, University of Zambia)

  • Katongo, Inonge

    (University of Zambia)

Abstract

This study investigates the role of treasury departments in managing long-term liquidity within Zambia’s commercial banking sector, using Zambia National Commercial Bank (ZANACO) as a case study. The research situates liquidity management within Zambia’s volatile financial environment characterized by exchange rate fluctuations, deposit dollarization, sovereign debt restructuring, and dynamic monetary policy conditions. A mixed-methods approach was adopted, combining quantitative analysis of liquidity ratios and funding structures with qualitative insights from treasury personnel, supported by regulatory reports and industry data. The findings reveal that exchange rate volatility, dollarization, tight monetary policy, government borrowing pressures, and technological limitations are the primary risks affecting effective liquidity management. Although compliance with Basel III liquidity standards has improved, reliance on interbank markets and limited adoption of advanced digital treasury systems constrain resilience. Additionally, environmental, social, and governance (ESG) risks remain inadequately integrated into treasury strategies. The study concludes that treasury departments play a critical role in maintaining financial stability but require enhanced modernization and strategic alignment. It recommends diversifying funding sources, investing in digital treasury platforms, integrating ESG considerations into treasury frameworks, and strengthening collaboration with regulators to anticipate and respond to policy shifts.

Suggested Citation

  • Simumba, Peter & Mwange, Austin & Katongo, Inonge, 2026. "Examining The Role of Commercial Banks’ Treasury Departments in Managing Long-Term Liquidity in Zambia: Case Study of Zambia National Commercial Bank Plc (ZANACO)," African Journal of Commercial Studies, African Journal of Commercial Studies, vol. 7(3).
    • Handle: RePEc:cwk:ajocsk:2026-87
    DOI: 10.59413/ajocs/v7.i3.17
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    References listed on IDEAS

    as
    1. Douglas W. Diamond & Philip H. Dybvig, 2000. "Bank runs, deposit insurance, and liquidity," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 24(Win), pages 14-23.
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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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