CDEDI has written the Reserve Bank Governor asking him to resign for failure to lead the institution. CDEDI believes the RMB Governor has presided over the depletion of forex for the past two years and failed to provide timely and sound counsel to the executive arm of government
Read full letter below
23rd May, 2022
Reserve Bank of Malawi,
P. O. Box 30063,
ATT: DR. WILSON BANDA
Cc: THE MINISTER OF FINANCE, ECONOMIC PLANNING & DEVELOPMENT
RE: VOTE OF NO CONFIDENCE
The Centre for Democracy and Economic Development Initiatives (CDEDI) writes you, sir, with reference to the above stated subject matter.
To begin with, CDEDI would like to draw your attention to The Daily Times newspaper article dated Tuesday, May 17, 2022 under the headline MAY’S DRUG BUDGET IN RED. The Principal Secretary in the Ministry of Health, responsible for Administration, Bestone Chisamile, was quoted in the story as having told the Public Accounts Committee (PAC) of Parliament that treasury had released US$1 million for the purchase of essential drugs, which were just enough to last 20 days.
CDEDI would also like to put it to you that the local industries have halted production due to the scarcity of forex, hence the rationing of cooking oil and sugar. Shelves in most shops are empty, a development that is signaling job losses by thousands of Malawians.
As if this was not enough, the Principal Secretary in the department of Economic Planning and Development, Winford Masanja, openly told the Budget and Finance Committee of Parliament that there is no solution in sight for the scarcity of forex as the country is not doing well in terms of exports.
As you are reading this letter sir, the Minister of Finance and Economic Affairs, Hon. Sosten Gwenge, MP, is on record as having called on Malawians to tighten their belts, which simply means Malawians should forgo extravagance and needless spending.
Going by the aforementioned, it does not need one to become an economist to notice that all macro-economic indicators are heading south. It was therefore a foregone conclusion that the Reserve Bank of Malawi (RBM) would devise a mechanism to ring-fence forex for extremely essential services and basic needs such as essential drugs and medicines, fuel, cooking oil, wheat flour, etc.
Elsewhere, central banks that are serving public interests, have already started rationing forex according to priorities. Back home, and if sentiments from the RBM publicist, Ralph Tseka, that the bank was doing something about the forex situation, without making it public, is anything to go by, then it simply means the RBM has run out of ideas, under your leadership. By virtue of being a public entity, the RBM should have been forthcoming with information and policies employed to solve or at least manage the crisis.
At a time when the citizens were about to take Hon. Gwengwe’s call seriously, CDEDI and well-meaning Malawians were shocked to learn that the bank had made available a whopping US$3 million for President Dr. Lazarus Chakwera’s luxurious trip to Davos in Switzerland and thereafter to Malabo, Equatorial Guinea, on a chartered private jet.
The above development means that the RBM does not have forex for essential drugs and medicine, raw materials for our industry, fuel, cooking oil and wheat flour, but it has stacked forex somewhere ready for President Chakwera’s and his Cabinet Ministers’ unjustifiable and unwarranted globetrotting.
In your judgement as both the Chairperson of the Board of Directors of the RBM and governor, essential drugs and medicines, fuel, raw materials to keep industries running and other basic needs can be sacrificed for the presidential trip. Such judgement will never bring any immediate solution for the forex shortage in the county, since it is simply a drain on the scarce forex and hard-earned tax!
It is against this background that CDEDI believes that besides presiding over the steady depletion of forex for the past two years you have served the RBM as governor, you have also failed to provide timely and sound counsel to the executive arm of government, including your current boss, President Chakwera on the implications of the current economic outlook and its immediate, medium-, and long-term effects to the 18 million plus Malawians.
On second thought, CDEDI and indeed well-meaning Malawians are forced to believe that you are serving narrow partisan interests of the Malawi Congress Party (MCP), which is infamously known for its insensitivity to the plight of the people.
Sir, you should have reasoned with President Chakwera not to travel, on grounds that the very same RBM which had failed to provide forex exceeding US$1 million to pharmaceutical companies to import drugs and medicines, could not afford to release US$3 million for the presidential trip. Simply put, the trip has been made extremely important than the lives of innocent and productive citizens, which have now been condemned to early graves due to preventable diseases. If this is not criminal negligence, then you are in a better position to tell us what this means.
If you didn’t have somewhere to start from in terms of advising the president, you should have at least reminded him that just across the Songwe border, the late Tanzanian President John Pombe Magufuli managed to transform the face of his country within six years of his tenure, without attending any of such international conferences.
As Rwandan Paul Kagame puts it, where is the morality of sweeping the much-needed forex clean to finance a photo opportunity with founder and chief executive officer of the World Economic Forum when millions of the voters are at the verge of starving to death due to economic hardships?
In the interest of transparency and accountability, CDEDI believes the noble thing for you to do sir, is to resign on grounds that you have dragged the RBM into disrepute. Alternatively, you have a chance to exonerate yourself, by publicly explaining to the Malawian taxpayers on why they should continue paying you as the RMB governor, when the writing is on the wall that you have failed to perform, and miserably so.
Malawians are looking forward to hearing from you on the above stated issues, the soonest.