A leading economic commentator in Malawi has asked the government to intervene in the country’s bank interest rate which he says is leaving most Malawians poorer than ever before.
Henry Kachaje, who heads the Economists Association of Malawi, told the state controlled MBC tv that there is need to have clear policies that would protect ordinary Malawians from banks that are only bent to make huge profits at the expense of poor Malawians.
“Almost all banks are making huge profits at the end of the year. The government cannot control interest rates but we need some intervention from the government,” he said.
He said it was ironic that the base lending rate, the rate at which banks use to give people who lend money to the banks is very low.
Kachaje said it was therefore important to have policies in place that would ensure that people who lend money to the banks also make profits..
He suggested banks don’t care much about the private sector because the government itself is the biggest customer as it borrows huge sums of money.
Kachaje, however, said government cannot fix the interest rates, saying doing so would excessively limit the profits and this would have negative effects on the economy as the economy would completely colllapse if banks close down.
Meanwhile, the country’s year-on- year inflation as measured by Consumer Price Index (CPI) is hovering at 23 per cent .
Inflation in the country is mainly driven by availability of food especially maize.