By Nenenji Mlangeni
BLANTYRE-(MaraviPost)-Half-baked Malawi News headline carried on July 10th 2021 concerning Reserve Bank of Malawi (RBM’s) MK1 trillion money transfer reveals yet a new desperate low when it comes accurate and fair reporting.
Anonymous RBM inside sources privy to legitimate information reveal that what excited reporters indicate as suspicious and ‘spotlight’ transactions was actually a pure debt restructuring process from short to medium term (5 to 6 years) to make it cheaper for Government in terms of interest payments. The holder of this debt is AfreximBank, an international investor in the country’s debt market.
A further digging into the issue reveals that at the particular time (June 2020), Malawi Government debt was to the tune of K4.8 trillion, and it was part of this debt that was being restructured from short term (90 day Treasury Bills) to become medium term (5-6 years).
‘Deposits into Commercial Banks’
AfreximBank wanted to invest in the local debt market. They buy in US dollars.
For this to happen they need local commercial banks through which they can exercise their marketing right.
In this case they don’t trade with individuals but rather their account which is in foreign currency. They bring their dollars into their account which helps the country to have a stable forex reserve.
On the shifting of the debt/loan from short (90 days) term to medium and long term (3-5 five years), it meant the country was relieved from paying the interest every 90 days.
In this case, the country’s economy was stable with a stable forex reserve and availability.
There’s therefore no cause for alarm or suspicion that could legitimately be insinuated by the recent Malawi News headline.
However, repercussions of such sensational writing and political arrests that follow may prompt the investor to believe his dollars are not in safe hands and probably pulling out all his dollars injected into the local commercial banks.
The article is an attempt of President Lazarus Chakwera’s Tonse administration to divert Malawians backlash on evil act of nepotism, favoritism and favoritism on public office appointments.
The article also target Dalitso Kabambe towards his political path in opposition Democratic Progressive Party (DPP).