Tag Archives: Malawi central bank

Malawi

CDEDI pens auditing firm Deloitte on political-motivated Malawi central bank audit leakage

Maravi Post Reporter
Namiwa on the right

By Taonga Sesani

LILONGWE-(MaraviPost)-The country’s human rights group, Centre for Democracy Economic Development (CDEDI) has penned Deloitte expressing worry over the leakage of bits and pieces of audit which the firm is undertaking at the Reserve Bank of Malawi.

A statement by CDEDI in our possession indicates that there was a change of their firms audit reference focal point from the suspended chief internal audit to RBM governor and the Firm did not question.

The rights lobby group has also observed that the governor is a political apointee and the change of the audit puts the whole process in question.

In the statement the Executive director Sylvester Namiwa has further asked Delloitte to advise the central bank to publish a public statement to either explain or disassociate it self from such unethical and unprofessional conduct.

However CDEDI has given the auditing firm seven working days to hear their part on the issue raised.

Below is CDEDI letter to Deloitte:

RE: LEAKAGE OF INFORMATION ON FORENSIC AUDIT AT THE RBM  

The Centre for Democracy and Economic Development Initiatives (CDEDI) writes you, sir, to bring to your attention the conduct of your client, the Reserve Bank of Malawi (RBM) in the way the information in the ongoing forensic audit is being managed.

Right at the onset CDEDI would like to bring to your attention that the Reserve Bank of Malawi is a public institution established by the 1989 Act. Secondly, it is worth mentioning that the RBM, just like any other bank is a corporate body with integrity to protect.

Similarly, we at CDEDI believe that Deloitte is a reputable firm that strives to adhere to high ethical standards in all its undertakings without being seen to be embroiled in partisan political interests.

It is against this background that CDEDI writes your good office to inform you that we are extremely worried, on behalf of all well-meaning Malawians with the leakage of the bits and pieces of the audit your firm is conducting at the RBM, before the final report has even been released.

Equally, we are saddened to note that as a reputable firm you have not even raised a query when your audit reference focal point was changed from the suspended Chief Internal Auditor to the RBM Governor. This alludes to interference on the part of the audit and puts the whole process into question as the Governor is a political appointee.  

CDEDI would like to refer your firm to an incident which happened at the KPMG in South Africa where the auditors’ reputation was shamefully soiled due to similar unprofessional conduct. It is very clear that the audit information is being leaked purposefully in order to victimise people from one region and tribe for political gains.

It is our expectation and that of many Malawians of good will that Deliotte would not like to be dragged into disrepute due to the current developments taking place at the RBM. It is against this background that we challenge your good office to advise the central bank to publish a public statement to either explain or disassociate itself from such unethical and unprofessional conduct.  

CDEDI is looking forward to hearing from you in the next seven days on the issues that have been raised in this letter. You may also wish to know that this matter at hand has attracted huge public interest and anxiety, and that Malawians are waiting with baited breath on how your office is going to manage this situation.

Yours Faithfully,  

Sylvester Namiwa

EXECUTIVE DIRECTOR

Business

Malawi central bank discredits social media rumors of bogus transactions involved Governor Kabambe

Angella Semu
Dr Dalitso Kabambe, Malawi Central Bank Governor

LILONGWE-(MaraviPost)-The country’s central bank, Reserve Bank of Malawi (RBM) on Saturday, June 27, 2020 declined rumors alleged crooked activities involving the bank’s Governor Dr. Dalitso Kabambe and an ICT expert and Manager Mrs. Brenda Muyaya.

In a press statement made available to The Maravi Post, the bank, noted with concerns that rumors were all over the social media suggesting that the Governor gave operational instructions to Muyaya to leave the system open with intention of abusing the system.

However according the Bank, the system was left open on 26 June 2020 to fulfill its mandate of price stability after rolling over transactions which had a foreign exchange (US Dollar) component as well as a Kwacha component which could only be completed after New York markets were opened and at this point the Malawi Financial Markets were closed.

The bank resolved to keep the system open after normal funds transfer window of 5.00pm to facilitate the closing of the transactions which can be extended for various reasons and following laid down procedures which was not the first time that the Bank felt compelled to extend the funds transfer window.

RBM also said failure to conclude the transactions as per that date would have meant that the agreements would be invalidated and fresh covenants initiated which could have taken several months with additional unnecessary costs to the Bank and the economy.

RBM also said the operational systems are audited by independent internal auditors, external auditors and are subjected to an independent assessment by the Safeguards department of the IMF which would be naivety of the highest for the central bank to be involved in such alleged bogus transactions.

The bank has therefore beseeched all stakeholders to desist from spreading fake news about the nation’s central bank and when in doubt to seek verification.

Business, Malawi

Malawi central bank pushes for electronic payments…As banknotes replacement pegged at MK15billion

Lloyd M’bwana
far left Buitelaar, Kamoto (near ) and Dr. Kambambe from left addressing the news conference

LILONGWE-(MaraviPost)-The country’s central bank, Reserve Bank of Malawi (RBM) is appealing for electronic payments amongst the general public in a bid reduce costs for replacing worn out banknotes.

RBM Governor Dr. Dalitso Kabambe told the news conference on Tuesday in the capital Lilongwe that the bank has for this financial year put aside MK15 billion for replacing old bank notes.

Dr. Kabambe observed that use of electronic payments will ease such expenditures which could be channeled into other government projects.

The Governor therefore lauded financial firms and telecommunication network providers for encouraging their customers on electronic payments when purchasing goods and services.

He commended both Airtel and TNM for completely removing users fees on their network’s money transfers and payments effective midnight, April 22, 2020 for the next three months.

Dr. Kabambe added that the measure will reduce hard cash usages amid Covid-19 scare.

“Just for 2020 alone, the bank has put aside MK15billion for replacement of old banknotes. This money could have been used for other productive government business. We need to go for electronic or cashless payments.

“This is the move to reduce cash usages which might be also a loop for contracting the virus. Therefore, Airtel and TNM need to be recommended for this approach”, lauds Dr. Kabambe.

As April 22, 2020, Malawi had 23 Covid-19 cases with three deaths.

Business

Malawi Central bank projects 5-6% for 2020’s economic growth

Angella Semu
Dr Kabambe addressing the news conference

BLANTYRE-(MaraviPost)-The Reserve Bank of Malawi (RBM) has projected about 5-6 percentage economic growth in year 2020 compared to 5 percentage growth in 2019 and 4 percentage in 2018.

The development has come as a result of projected average of 8.8% inflation rate in 2020 compared to 9.4 percentage inflation rate that was realized in 2019.

The annual headline inflation of 9.4 percent was slightly higher compared to 2018 average record of 9.2 percent ensued by rising food prices.

In the Monetary Policy Statement, Inflation rate has been projected to average 8.8 percent in 2020 with favorable weather conditions and continued exchange rate stability.

Policy rate will also be maintained at 13.5 percentage with liquidity reserve requirements on domestic currency deposits at 5 percentage and at 3.75 percentage on foreign currency.

RBM Governor Dr. Dalitso Kabambe told the news conference in Blantyre on Thursday, January 30, 2020 that Malawi economy did very well in year 2019 with 5.0% growth up from 4.0% which was observed in 2018.

This was despite having major setbacks such as cyclone Idai and general election.

Stable exchange rate was also observed in year 2019 with Kwacha trading at MK738.8731 per US dollar which is equally expected to continue in year 2020.

“Non-food inflation remarkably declined averaging by 3.6 percent from year 2018 to year 2019. With stable exchange rate and global market prices projected to go down, the non-food inflation will remain anchored in 2020 around 4 percentage.

“In terms of food inflation in year 2020 with good weather and expected favourable agriculture output, it is expected to be slowed down but although the main focus at the moment is the non-food inflation that is within our control,” Kabambe said.

According to the Monetary Policy statement, the private sector credit grew by 21.3 percent in 2019 compared to 11.5 percent in 2018 which was supported by reduction in interest rates.

In addition, oil prices are projected to remain stable with Brent crude oil prices projected to average US$58 per barrel in 202 lower than US$60.2 per barrel registered in 2019.

These prices are expected to go down in 2021 to US$55.3 per barrel despite uprising geopolitical tensions.

Kabambe said Malawi has seen stable macro economic stability for the last three years and for this to continue there’s a need to invest in sectors that matter such as energy, Mining, tourism, manufacturing and most important agriculture sector to increase economy growth at an increasing rate.

Kabambe added that there is also a need to invest in education sector for Malawi realize this projected growth so that there can be enough skilled labor to help the other sectors.

Meanwhile, RBM has adopted a symmetric band of 2.0 percentage points around the target of 5.0 percentage in projecting the inflation rate which is in line with international best practice as used by most central banks around the world.

Business

Malawi Central Bank lauds Airtel listing

Maravi Post Reporter

BLANTYRE-(MaraviPost)-The Reserve Bank of Malawi (RBM) says Airtel Malawi listing presents a rare investment opportunity in the telecommunications sectors.

Airtel is offering 2.2 billion shares at MK12.69 per share on the Malawi Stock Exchange (MSE), allowing the public, for the first time, to own part of the telecommunications firm.

The company’s offer represents Malawi’s largest initial public offer (IPO) in the history of MSE listing, which represents 20 percent stake in the business through an offer to sell 1.6 billion shares or 15 percent, and an over-allotment option of 550 million shares, representing five percent.

RBM Governor Dalitso Kabambe said  the listing would bring a number of advantages to the company as well as Malawi’s capital market.

Kabambe made the remarks during a pre-listing cocktail held at Ryalls  Hotel in Blantyre on Wednesday,  where notable industry captains attended,

“We are delighted with the listing of Airtel Malawi as it will accord many Malawians an opportunity to invest in this business and become part owners of this company. Airtel will also benefit from greater customer loyalty as customers will be part owners of the business,” he said.

On his part, Airtel Malawi managing director Charles Kamoto dispelled rumours that the listing was aimed at raising funds to recapitalise the business which is financially struggling and has huge debts.

“We are a leading telecoms company with a 54 percent market share and being in an industry which is growing fast, this means our growth prospects are very high. We have invested a lot in data which is the future of our business, fiber, and high speed internet, all this presents high growth prospects,” he said.

Minority Shareholders Association secretary general Frank Harawa described the listing as a milestone for the stock market.

Airtel announced its intention to undertake an IPO by applying for admission of its ordinary shares to trade on the stock exchange on December 11 2019.

This listing will also enable the company to comply with Section 35 of the Communications Act of 2016, Regulation 26 (2) of the Communications (Telecommunications and Broadcasting Licensing) Regulations of 2016 and Clause 42.2 of the subsidiary’s operating licence, which requires the company to have at least 20 percent local Malawian shareholding.

Business, Malawi

Malawi central bank ponders liquidating pensionable gratuity scheme….Says its cost cutting measure

Lloyd M’bwana
Malawi Central Bank

LILONGWE-(MaraviPost)-The country’s central bank, Reserve Bank of Malawi (RBM) is considering to liquidating pensionable gratuity scheme as cost cutting measure, it has been learnt.

The move comes amid general public outcry over the scheme shortfalls as retirement packages are currently disadvantaging employees since Pension Act was introduced in 2010.

Consequently, in 2012 RBM introduced the Pensionable Gratuity Scheme as one way of addressing the disparity in benefits for members of staff with different exit modes.

This followed also the amendment to the Employment Act (2000) and the introduction of the Pension Act (2010) where it was noted that members of the staff working all the way to retirement were being disadvantaged as opposed to those dying (died) in service.

The central bank specifically noted at the time that Section 4 (b) of the Pensions Act states that one of the objectives of the Act is to, “Ensure that every employee in Malawi receives retirement and supplementary benefit as when due’.

However, supplementary benefits under the Act are only specified in Section 15 for death benefits as follows;

  1. An employer shall, in addition to making pension contributions on behalf of its employees, maintain a life insurance policy in favour of each of its employees for a minimum life insurance policy cover of one times the annual pensionable emoluments of the employee
  2. The benefits of the life insurance policy specified in subsection (1) shall form part of the member’s death benefit and shall be distributed in accordance with section 70.

This means that employees working up to retirement were being disadvantaged as they did not receive the supplement benefit as required by the Act.

RBM Director of Communication & Protocol Mbane Ngwira confirmed the bank’s thinking on the matter to The Maravi Post in an interview saying that failure by the Act (Law) to define the nature of supplementary benefit payable on retirement compelled the central bank to introduce the Pensionable Gratuity Scheme as one way of leveling the playing field.

Ngwira however observed that seven years down the line, the liability of scheme has increased from MK8 billion to MK14 billion and holding all factors constant.

He therefore disclosed that the liability is projected to rise to over MK25 billion by 2024.

“This would be unsustainable and would lead to drain the bank’s financial resources. The only way out is to stop it and liquidate it before it reaches a crisis point at which no remedial measure will be financially attainable.

“The bank is therefore pondering liquidating the scheme in line with existing legislations such as the Pension Act, Employment Act and other laour laws,” confirms Ngwira.