Malawi’s economy is excessively bleeding potential profits and revenue losses due to capital flight and illegal externalisation of foreign exchange in the tourism and trade sectors.
Nyasa Times can reveal that a special committee that was set-up by the Ministry of Finance in February last year has discovered the illicit conducts that have led to losses in fees and national revenues worth over US$5 billion for the past 6 years.
The committee was formed with the objective of cutting out the massive plunder of foreign exchange due to illegal foreign currency externalisation and transfer pricing.
As members, it has Reserve Bank of Malawi, the Financial Intelligence Authority, Anti-Corruption Bureau, Directorate of Public Prosecutions, Malawi Revenue Authority, Department of Immigration and the Malawi Police Services.
Most of the investigations conducted point to players in the tourism sector of the country, popularly known as the Warm Heart of Africa, who have established accounts in eastern and western countries where their clients make deposits for travel and tourism packages.
“The figure is at US$5 billion now for the past 6 year period but it will definitely increase once we piece together all details. These earnings are not remitted to Malawi and follow-throughs clearly show no records in the accounts of local tourism establishments.
“It is a close knitted diabolical scheme whose multiplier effects are stunted growth of the sector, low payments of workers, illegal zero tax charges of those earnings and dwindling progress of the national economy,” one of the investigators said.
Government statistics show that the tourism contributes 7.7 percent of Malawi’s GDP (Gross Domestic Product).
For the trade sector, most firms have been externalising foreign exchange in the name of acquiring new equipment such as factory machinery or repairs most of which do not show up in the country after the expected times.
Action on the tourism sector has not started yet. As it stands, the committee members’ joint efforts have resulted in the apprehension of over 30 firms involved in illegal externalisation leading to recoveries of close to US$1 billion.
While acknowledging massive progress made by the special committee, the central bank’s spokesperson Mbane Ngwira requested for more time to verify figures and various details.Follow and Subscribe Nyasa TV :