BLANTYRE-(MaraviPost)-Paying attention from opposition Democratic Progressive Party (DPP) Blue night fundraising dinner’s speech made by Professor Peter Mutharika, the party should consider an economic expert within DPP for presidential candidate ahead of 2025 Malawi polls.
Muntharika lamented that Malawi’s economy is in a mess under President Lazarus Chakwera’s Tonse Alliance government three years in power.
Mutharika who was speaking during Blue night at Mount Soche Hotel in Blantyre, hinted that for the party to bounce back it needs finances, strong candidate and sound manifest.
DPP leader says delegates at the party’s convention need to vote for a right candidate to represent the party in the next polls.
He says the party needs to have a candidate who is wise and understands how to govern the nation with economic sound minds to turn Malawi’s ailing economy.
Who is this presidential candidate with economic sound?
Among DPP presidential hopeful ahead of July 2023 elective convention, former Reserve Bank Governor Dr. Dalitso Kabambe an former Finance minister Joseph Mwanamvekha are right candidates.
Coincidentally both Kabambe and Mwanamvekha have contributed each MK5 million to the event.
However, Kabambe fits all considering excellent monetary policy direction he instilled at Reserve Bank of Malawi as governor.
Three years down the line since 2020, after Dr. Kabambe was removed from RBM, the bank has lost its monetary policy direction despite several desperate attempts to align itself with the International Monetary Fund (IMF), World Bank and other financial institutions’ monetary discipline and policies.
Chakwera’s Tonse Alliance government could have waited a bit for proper leadership transition before sacking the intellectual and monetary figurehead of Dr. Kabambe at the Central Bank.
RBM is struggling currently due to amateurish and experimental approach of monetary policy. Ukraine and Russia war, climate change and weather shocks and COVID-19 remain an excuse for the current ailing economy while previous regime managed to contain the monetary disarray.
The bank is failing to maintain inflation, exchange rate stability, and foreign exchange reserves cover for the past three years.
Malawi needs the caliber of Dr. Kabambe with sound monetary policy skills to turn fortunes at the central bank and Malawi without political eye beyond 2025.
LILONGWE-(MaraviPost)-The depth of the well is always appreciated when drained. This is exactly happening at Malawi Central Bank-Reserve Bank of Malawi (RBM) immediately when President Lazarus Chakwera’s Tonse Alliance government removed Dr. Dalitso Kabambe as Governor over political inclination while deserting prudent monetary policy agenda the latter instilled in the bank.
Three years down the line since 2020, after Dr. Kabambe was removed from RBM, the bank has lost its monetary policy direction despite several desperate attempts to align itself with the International Monetary Fund (IMF), World Bank and other financial institutions’ monetary discipline and policies.
Chakwera’s Tonse Alliance government could have waited a bit for proper leadership transition before sacking the intellectual and monetary figurehead of Dr. Kabambe at the Central Bank.
RBM is struggling currently due to amateurish and experimental approach of monetary policy. Ukraine and Russia war, climate change and weather shocks and COVID-19 remain an excuse for the current ailing economy while previous regime managed to contain the monetary disarray.
The bank is failing to maintain inflation, exchange rate stability, and foreign exchange reserves cover for the past three years.
In a desperate attempt to source forex, RBM in January this year auctioned the Malawi kwacha against major currencies which ended as a flop and shameful.
The nation is unable to have forex for buying essential commodities, including farm inputs, fuel and medical supplies.
This has ended the country having debts up to MK6.38 trillion, surpassing national budget, which is pegged at MK3.87 trillion just three years Chakwera took reins of power in June 2020.
In his 2023/2024 National Budget presentation at Malawi Parliament on March 2, 2023, Finance Minister Sosten Gwengwe admitted how the country’s inflation has failed to go down.
“To contain inflationary pressures, the Reserve Bank of Malawi (RBM) adjusted its Policy rate from 12.0 percent to 14.0 percent in April 2022 and to 18.0 percent in October 2022. In response, the average lending rate moved in sync with the Policy rate adjustment, rising from 18.0 percent to 19.3 percent in May 2022 and to 22.6 percent in November 2022.
“In February 2023, in anticipation of a more favorable outlook for inflation, the RBM held its policy rate at 18 percent. Foreign Exchange Reserves,” admits Gwengwe.
The minister added, “Madam Speaker, foreign exchange reserves remain remarkably low as need for imports far out paces the exports. To boost the foreign exchange reserves, the RBM implemented a surrender requirement of 30 percent of exports and, in May 2022, devalued the Malawi Kwacha. Let me assure the House that Gross official reserves are expected to recover to above 3 months of import over the medium term”.
On debts Gwengwe could not also hide, “Allow me to appraise the House on how our debt currently stands. As at end- December 2022, Total Public Debt reached MK7.90 trillion or 69.93 percent of GDP. Out of this stock, MK4.43 trillion is domestic debt while MK3.47 trillion is external debt.
“Compared to end-March 2022, total Public Debt Stock amounted to MK6.38 trillion, representing an increase of 23.8 percent; mostly out of issuance of treasury securities to finance budget deficits and refinancing of old maturing debts”.
However, the current Tonse Alliance government will not appreciate the role former governor Dr. Kabambe played at the bank over the political eye of being with opposition Democratic Progressive Party (DPP), which total wrong and naïve.
This is what Dr. Kabambe attained at Reserve Bank of Malawi (RBM) as governor on prudent monetary leadership;
1.Achieved single digit inflation within one year of work from 24% in January down to 7.1% by December 2017 and maintained single digit average inflation throughout the tenure.
2.Maintained stable exchange rate for the Malawi kwacha at MK732 to a dollar throughout the tenure
3.Raised the country’s foreign exchange reserves from less than 2 months of import cover or US$389 million to over 6 months US$1.4 billion.
4.Reduced the policy rate from 24% down to 13.5% within 2 years.
5.Reduced Non Performing Loans (NPL’s) for Banks from 19% to 4% within 2 years.
6.Improved private sector lending from negative to 19% across the board from Banks, MFI’s and Saccos.
7.Improved RBM profitability from a projected K4 billion loss in 2017 to a surplus of MK21 billion by year end and a further surge in profits to a record of MK57 billion in 2019, a record no other RBM Governor has ever achieved.
8.Pushed up the country’s remittances from US$36 million in 2017 to US$250 million in 2019.
9.Successfully implemented the ECF program with the IMF throughout the period.
10.Improved the performance of the Malawi Stock Exchange in all its indicators.
Now, Dr. Kabambe is vindicated while still standing as one of the country’s successful Malawi Central Bank Governors, the nation has ever had with credible monetary policy.
Malawi needs the caliber of Dr. Kabambe with sound monetary policy skills to turn fortunes at the central bank without political eye.
As Governor of the Reserve Bank of Malawi [ RBM], Dr. Dalitso Kabambe was responsible for providing strategic direction and leadership, expectedly in line with the law.
The focus should have been on the design and execution of the objectives outlined by the monetary policies; strengthen the exchange rate stability and advocate for the soundness of the financial system, which in the end should have ensured economic growth.
RBM by law, is not supposed to provide LCs [ read as credit facilities] to private companies.
Dr Kabambe’s RBM, exchanged communication and provided Letters of Credit [ LCs], to private companies, most of them with no telephone numbers that work nor traceable physical addresses.
Mulotwa Mulotwa tried to make calls to these companies using numbers found on correspondences with central bank, to no avail.
Dr. Kabambe, who wants to rule Malawi is a nice fella. This warm hearted fella dealt with the below companies – to which he was kind and acted without due diligence – which defaulted as below:
Get angry; companies from B to E; are all owned by company A!
The Ombudsman, DPP, FIU, ACB & AG should bang heads to establish whether there is no criminality on the part of Dr. Kabambe etal…
In our investigations, which took us to the Registrar General’s Department, interestingly documents indicate that JF Trading lawyer is Lloyd MUHARA! We end here, given the respect we have for Judges as a page. Chances are names can be similar and he is not the one.
To be safe, we will just say documents at the Registrar General’s office are forged.
But for all we know about DPP antics; late Bingu wa Mutharika’s corpse arrived at Waterkloof military air base in Pretoria at 2.30am on April 6, 2012 strapped to a stretcher, tube affixed in his mouth to fool the World that he was alive and to top it all, bearing a brand new name.
Names and DPP. DPP is crazy about names, a party Dr. Kabambe wants to lead in 2025 to plot number 1.
Sorry, we digressed – and for the party that once gave us Everton Chimulirenji as Veep – and knowing that once bitten twice shy – can Dr. Kabambe run matters of state given his pedigree at RBM?
LILONGWE-(MaraviPost)-Malawians on June 23, 2020, entrusted Tonse administration under President Lazarus Chakwera and Saulos Chilima with power to govern the nation to the next five years.
With this power vested into the two, Malawians expect nothing more than total social-economic transformation regardless of political, tribe and regional attributes towards governing the nation.
The Tonse administered is however trapped into political, regional, nepotistic appointments and appeasement in running affairs of the state.
No wonder despite excellent performance among some civil servants in various government agencies, are being booted out or sacked because are deemed to belong to a particular tribe, region and political party.
Check on these two notions among Tonse administration supporters;
1.Awa sianthu, sanalinafe pomwe timapita kunsewu polimbana ndi Peter Mutharika ndi chipani cha DPP, (They were not part of us the time we were on streets demonstrated against, Peter Mutharika’s Democratic Progressive Party).
2. Kaya mukuti Chakwera sakuyendetsa bwino boma, bola DPP tinayichotsa ( Whether Chakwera is not governing the nation well, better DPP and Mutharika are out of government).
These two statements especially among Tonse’ shareholders Malawi Congress Party (MCP) supporters are uncalled for and unacceptable in this democratic era.
One victim of political persecutions is Dr Dalitso Kabambe, whom on July 8, 2020 was fired as Reserve Bank of Malawi (RBM) Governor by Chakwera and replaced him with a family friend (nepotism and tribe lines) Dr Wilson Tongani Banda.
Former President Peter Mutharika on Friday, April 21, 2017 appointed Kabambe as RBM replacing Dr. Charles Chuka, whose contract expired and was not renewed.
Before his appointment to head Malawi’s central bank, Dr. Kabambe was Principal Secretary (PS) in the Ministry of Foreign Affairs and International Cooperation.
Prior to his post at Foreign Affairs, he served as the Budget Director in the Ministry of Finance, during Bingu Wa Mutharika’s administration.
Despite Kabambe excellent performance at the central bank testified by low inflation, policy rate and local currency Kwacha strength against foreign currencies, Chakwera and his Tonse government thought of removing him.
His successor Banda’s work in just six months is in shambles failing to handle the inflation.
Now after failing to tick at the central bank, Tonse media team especially MCP has now launched a campaign attacking Kabambe on his past remuneration arguing that he was getting MK27 million while directors had MK20 million per month while the current governor Banda is getting MK9 million while directors are carting home MK3 million.
This political motivated forensic audit on Dr. Kabambe is wrong which is targeting an individual instead of the system.
This a plot by MCP to dent the former RBM governor image towards his future political ambition that he was corrupt.
This is not surprise as prior to June 23, 2020 presidential elections, MCP secretary-general Eisenhower Mkaka (now also foreign affairs minister) launched a stinging attack on Kabambe, accusing him of meddling in the country’s politics and helping to perpetuate impunity which he had no basis.
Malawi’s Central Bank
So, here are quick facts about RBM Governor Renumeration which its board decides not a governor;
RBM’s Governor falls into Grade 19 (one of the highest grades in Malawi) when it comes to remuneration.
Salary of the Governor should surpass his deputy by 12.5%
RBM Governor has other benefits such as Leave Grant, Domestic allowances, Disturbance allowances and vehicle
A five year contract for the RBM Governor is given at a projected remuneration package of within MK146 040 432.00 – MK369 036 900.00
On June 15th 2018, the Reserve Bank of Malawi (RBM) Board of Directors had a meeting. As per tradition, Governors are not expected to be part of the attendants. So the then Governor, Dr. Dalitso Kabambe, was not there.
Among other administrative issues deliberated, the RBM Board agreed to revise salaries and benefits. From documented records, gross salary for the Governor was revised to K221,732,604 per annum. These new salaries were announced as to be effective March 2018.
Records reveal that on 26th July 2018, the RBM Board wrote a letter to their Governor, reporting about the revisions to salary and benefits as agreed by the Board.
From these record of facts, it is important to emphasise that any reforms, austerity measures or decisions can be employed without blaming any former or current RBM Governor.
From both records and culture at RBM, it is the Board (minus the Governor) that is the final authority when it comes to renumeration.
So, how sure is the nation that the current RBM Governor is not getting his predecessor?
Chakwera must demonstration true servant leadership not nepotistic type of leadership coupled with selective justice shown in six months.
Malawi Agricultural and Industrial Investment Corporation on move
LILONGWE-(MaraviPost)-The newly established Malawi Agricultural and Industrial Investment Corporation (MAIIC) is now in full force to drive private sector led economic development in the country.
MAIIC leadership along side Reserve Bank of Malawi (RBM) addressed the news conference on Tuesday in the capital Lilongwe of full operation of the corporation.
MAIIC Chief executive officer, Taziona Chaponda, said since November 2018 when MAIIC was launched, the company had been putting things in order including recruiting staff.
Chaponda said the corporation envisages to support private sector development and boost its activities by mobilizing finance and capital from the private sector and international investors among others.
He added that the private sector will also benefit from working with MAIIC in a way that the institution will be extending credit facilities to private sector entities.
Chaponda who once worked as a senior executive economist at IMF in Washington says; “Among others, the agriculture, agribusiness, industrialization and tourism sectors will also benefit from MAIIC since they will become part of those sectors’ client base”.
RBM Governor Dr. Dalitso Kabambe said MAIIC’s operationalization is timely saying the country’s economy is stabilized.
“The company will help in boosting the economy of the country since it will support various businesses and projects that must help the country’s economy to grow.
“MAIIC is different from the other banks as it will provide long and medium term loans which will help businesses to grow in the country thereby developing the country’s economy”, says Dr Kabambe
The Ministry of Finance, Economic Planning and Development in conjunction with CDH Investment on November 28, 2018 launched Bank will launch the Malawi Agricultural and Industrial Investment Corporation PLC (MAIIC) to spearhead industrialization in Malawi.
MAIIC therefore opens its doors to people, businesses, companies, agricultural cooperatives with bankable business projects seeking finance and technical skills to kick start or expand their businesses.
The Reserve Bank of Malawi (RBM) Governor, Dr. Dalitso Kabambe
Blantyre, February 1, 2019: The Reserve Bank of Malawi (RBM) Governor, Dr. Dalitso Kabambe says the bank has performed tremendously in all its 2018 strategic priorities.
The governor told the press Wednesday in Blantyre that among others, the central bank maintained and sustained stable exchange rate and ensured sound robust and resilient financial sector.
“The single digit inflation throughout 2018 has been on 9.2 percent against the target of 9.5 percent. We wanted to see diaspora remittances increased from 38 to 200 million dollars and I am happy to tell you that as of December, 2018, 186 million USD had been generated.
“There was also increased number of bank accounts and customers from 1.4 million to 2 million. Counterfeit currency was reduced by 57.0 percent from December 2017. The accumulated counterfeits were also less that the internationally acceptable threshold of 7 percent on cash in circulation,” said Kabambe.
He then said in collaboration with other law enforcement agencies, the bank successfully prosecuted and won through the courts a total of 28 cases involving illegal foreign exchange externalization, transfer pricing and counterfeit currency. An equivalent amount of K587.7 million was returned to the government.
As a measure to fight against counterfeit currency, Kabambe also launched Malawi Kwacha Smartphone Application which he indicated would help safeguard the integrity of the Malawi’s currency.
He said last year alone, a total of 1,757 pieces of fake notes were recorded and if the malpractice continues, there will be losses in business on a personal level.
“The bank decided to develop the application to enable technology users such as youngsters verify the authenticity of Malawi Kwacha in their offices, homes, business premises or wherever they are.
“We believe that the application will go a long way in making the public aware of the security features of the Malawi Kwacha at their own convenience and assist in timely detection of the counterfeit currency before it changes hands,” said the Governor.
Categorized as look, tilt and feel features, the App can explain what security features to look for on a bank note and how they work among others.
LILONGWE-(MaraviPost)-The Reserve Bank of Malawi (RBM) has maintained policy rate at 18 percent, a decision made at the Monetary Policy Committee (MPC) and the Liquidity Reserve Requirement at 7.5 per cent in trying to keep with the latest developments in the economy and the need to keep the inflation firmly on the downward path.
The announcement has come through a statement made by MPC after it conducted a review meeting for global and domestic economic developments and it has been signed by Chairman of the committee, Dr Dalitso Kabambe, who is also Reserve Bank of Malawi Governor.
This policy stance will help consolidate the gains achieved so far in reducing the inflation rate to ensure that it remains at single digit for a longer period to guarantee sustainably low interests rates, thereby enhancing private sector investments and economic growth.
“By maintaining the tight monetary policy stance it will mean entrenching the stability of the kwacha exchange rate by moderating demand for foreign exchange, thereby allowing the central bank to accumulate foreign reserves,” the statement reads in part.
The global growth was estimated at 3.1 percent in 2016 and this year it is estimated to accelerate at 3.5 per cent. The pickup in global economic activity is driven by developments in emerging and developing economies.
According to the statement, the real Gross Domestic Product (GDP) growth is projected to rebound to 6.4 per cent this year from 2.7 per cent last year, a feat that is coming on the back of favourable weather conditions and improving microeconomic environment.
The statement further said the bank continued to withdraw excess liquidity from the banking system and consequently conditions in the money markets remained tight as evidenced by the interbank rate being kept close to the Policy Rate.
LILONGWE-(MaraviPost)- The Reserve Bank of Malawi (RBM) on Tuesday, disclosed that about US900 million (MK725 billion ) is being lost yearly through illegal forex externalization.
The central bank Governor Dr. Dalitso Kabambe attributed the financial fraud to politicians’ involvement.
Kabambe disclosed that they are the masters of dubious payments, hence the need for intensification against the vice in the country.
The Governor was addressing the guests in Lilongwe, on Tuesday during the launch of a Tip-Offs Anonymous System.
Dr. Kabambe said the System is established to fight corruption in the commercial bank sector.
The RBM has partnered with Deloitte, the Anti-Corruption Bureau, and the Financial Intelligence Authority. It is to fight fraud and corruption among workers of the banks.
The Governor stressed the need to seal all loopholes to ensure that Malawi does not witness another Cash-gate saga, which devastated the economy.
He observed that the cheques that were used in Cash-gate were RBM (Government) cheques hence there is the need for the Bank to take steps to ensure that pilferage of any Government resources never happens again.
Dr. Kabambe disclosed that the central bank is working on introducing an SMS alert system that will notify all stakeholders, including the Governor, the Finance Minister, the Secretary to the Treasury, line ministers, and other officials to help them trace dubious transactions and to stop them.
“The recent study the central bank carried, found that in 2016 alone, the Malawi Government lost about MK725 billion through illegal forex externalization, which is a big loss to Malawi. We are coming from a dark period of Cash-gate, and it was the worst. It was a tragedy for this nation and Cash-gate has taken this nation backwards, when all other countries in the region and beyond are progressing. As the country is progressing, we need to seal all the loopholes,” the Governor said.
“There are no politicians in the Reserve Bank of Malawi, we are all professionals and what we are saying is that we have to do our work with integrity. If we do that, there is no way we would allow any dubious transactions to take place; either perpetrated by a politician, a business person or any person. They will never use RBM workers for such deals,” Kabambe said.
Implementers of the Tip-Offs Anonymous System, Deloitte, emphasized the need to engage external partners in such initiatives and said that some people would not be comfortable to report fraud to in-house structures.
ACB Director-General, Lucas Kondowe, lauded RBM for the initiative, observed that people have often blamed the Bureau when incidents occur, however said that the fight against corruption cannot be won by the ACB alone.
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