 |
 |
 |
 |
National
Mutharika remain opposed to Kwacha devaluation
|
By Wanga Gwede, Nyasa Times |
December 29, 2011 · 77 Comments |
Malawi President Bingu wa Mutharika says he remains opposed to devalue the country’s currency, Kwacha, as argued by economists and has challenged International Monetary Fund (IMF) that the devaluation will not benefit Malawi.
IMF wants Malawi to further devalue the Kwacha and liberalise foreign exchange before resuming the country’s Extended Credit Facility and cushion the foreign exchange shortages.
Economists have been arguing that strong kwacha has been hurting the economy by making Malawi exports more expensive for foreign customers and also creating shortage of forex.
Mutharika: No devaluation
But speaking during the elevation of TA Makwangwala in Ntcheu district on Thursday, Mutharika said he could not buy the theories to devalue Kwacha.
“I will not accept devaluation,” stressed Mutharika, an economist who worked for the World Bank.
‘Colonial thinking’
He trashed some local economists who were calling for devaluation saying they were “thinking like colonialists.”
Mutharika said devaluing the currency will invite national economic depression and that he will not buy economic orthodoxies that will hurt Malawians.
The President said he had maintained a stable Kwacha in his rule.
He pointed out that when Bakili Muluzi was taking over government as President from Kamuzu Banda in 1994, Kwacha was around K54 and handed over power to Mutharika in 2004 when the currency was valued at K150.
Malawi devalued its currency by 10 percent in August this year. The official exchange rate Kwacha is trading at 168 to a US Dollar. The Kwacha has been trading at K150 to a dollar for many years but at the parallel market, the Kwacha is trading o to a US Dollar.
Mutharika accused investors of externalising money and opening offshore accounts than local banking.
“Today we are seeing Shoprite, Spar, Game Stores and Mr. Price coming to Malawi to start business – each day they sell millions and where do they take their money to and yet they don’t have accounts here,” said Mutharika.
“And yet you keep on asking where dollars are – they are offshore with these people in their banks,” he said.
“When the tobacco buyers buy our leaf, they don’t keep their money here when they resell.
“People are saying I am arrogant for not going to the donors to plead for assistance and yet these people do not understand our problems,” said Mutharika.
“Your money is in Mumbai, Karachi, and London as these just give you peanuts for your tobacco, sugar, tea,” he said.
Decree
He decreed that the Reserve Bank of Malawi and the Ministry of Trade must not “allow foreigners or anyone else to open a bank or business here unless they tell us where our forex is going,”
“I want you in control of forex to protect this country and not the IMF. I will be happy to receive your resignation letter if you are not ready to protect this country,” he said.
Malawi is battling severe fuel and foreign exchange shortages, in a country where 39 percent of the 13 million people population live on less than a dollar a day.
|
|
Tags: Bingu wa Mutharika, economy, Game Stores, IMF, Malawi Kwacha
77 Responses to “Mutharika remain opposed to Kwacha devaluation”
Pages: [8] 7 6 5 4 3 2 1 » Show All
Pages: [8] 7 6 5 4 3 2 1 » Show All
Leave a Reply
- Girl-child education key to safe motherhood -JB
- Soccer – a growing death trap?
- Positive mindset: African’s way to prosperity
- Lipenga at it again: Bingu was too hasty on ‘Nsanje Slab’
- MRA continues sexing up figures
- Malawi ‘bisexual’ mum fights deportation from UK
- ACB arrests fierce DPP youth governor over YEDEF loans
- Scrap off retrogressive taxes, IBAM says
- Peter Mutharika shunned at Cup presentation
- Paladin, Malawi workers agree to end Kayelekera mine strike
N/A
Polls
Loading ...
Hey my brothers and sisters we have to be very careful these people an’t our friends,they are up to a lot of crap.all these things are not going to affect those with money and homes outside the country,i fear our future as the youth of Malawi
Like
0
ReplyWe can debate about the pros and cons of a devaluation here, but the point is, a devaluation is INEVITABLE, unparatable though this may be. Bingu has no choice, but to devalue. Unlike the medical doctors who burry their mistakes, the mistakes of “economic engineers” can be very glaring, costly, with long term negative effects both on the economy and human welfare. Bingu cannot hide this fact. He can blame it on satan, MCP, UDF, Game shops, etc but the blunt truth is he has mismanaged or to be more previse, mis-engineered the economy. The donors and foreign investers who we are calling stupid and imperialists, could have provided a temporaly relief by pumping in a few million dollars. But as the situation stands, there are not better alternatives.
Produce, produce, produce what! Malawi is already a high cost producing country. Shortage of power, water, fuel, etc makes value addition and production for exports very difficult. We can’t produce for exports (and therefore generate forex), and at the same time we have a large appertite for imported goods. It is bad maths.
Like
1
ReplyWho doesn’t know where the forex is going? How are the Chenese repatriating their money to China? Can they be doing those big constructions without sending big money home? MRA, can you check the Chenese’ businessess in Malawi how the keep their books of accounts? Do they pay any taxes by the way?
Like
1
ReplyIn my little understanding of economics, the shortage of Foreign exchange is as a result of the lack of equilibrium between demand and supply of forex on the market. In this case the demand for forex is higher than the supply. For the Demand and supply to be at equilibrium, the value of the foreign currencies against the kwach must go up otherwise there shall continue to be a shortage of forex.
If Bingu feels that IMF and other economists are wrong, Bingu should come up with an altenative to address the Forex shortage in the country. He faces the danger of destroying all the gains he made in his first term if the shortage of foreign exchange continues
Like
3
ReplyKupewa kuposa kuchiza. Pomafika June 2012 Bingu adzalilira dziko poyera zinthu zitafika pamwana wakanaphala. Angonyoza aliyense mpaka achina chain stores? Economics yanji anaphunzira! M’mangonva za foreign investors eti?
Like
0
Replykaya mmati ndani mtsog,osavera zopusazo.ireland z n problems now cant u c
Like
0
ReplyI have read an article about Ireland concerning the same IMF. What this country did was to bow before what IMF wanted and am telling you all is worse with Ireland that you can hardly believe that this IMF is just there to kill our land.
We need to appreciate this leader of ours for his passion of care for the poor who shall become much and un bearable victims if our kwacha shall be devalued. I totally second Bingu for his move because he knows better that for every silly mistake he may allow by accepting IMF`s speeches and demands he shall become the worste leader interms of economy. Lets pray to God for the best of our motherland, Malawi.
Tikakomedwa kumvera anthuwa tizivulaza tokha komano tiganizire ubwino ongogwesa ndalama yathu popanda zifukwa zoyenera zomwe anzathunso anavomereza koma lero ali mmavuto osaneneka, ku Ireland.
May God bless malawi.!!!!!!!!!!!!!!!!!
Hot debate. What do you think?
4
Reply