Experts at the country’s central bank, the Reserve Bank of Malawi (RBM), say that the bank legitimately wired the K1 trillion in a single day in June last year to various local commercial banks as part of debt restructuring process.
Media reports published over the weekend indicated the June 26, 2020, a day before President Lazarus Chakwera was declared winner of the June 23 fresh presidential election, was questionable and “one of those under investigation at the central bank.”
The article also linked the transactions to allegations of impropriety among RBM senior management that led to the arrest of former Governor, Dalitso Kabambe, Deputy Governor Henry Mathanga and Senior Dealer Financial Marketing Operations Leah Ndonga who are presently on bail.
While Minister of Finance, Felix Mlusu, has simply said they are “investigating the matter,” Economics Association of Malawi (ECAMA) executive director, Frank Chikuta, entirely declined to comment on the matter, according to the article.
But a high ranking official at RBM, privy to the information surrounding the transactions, who sought anonymity for fear of employment reprisals said the media was misleading.
“The transactions were actually a pure debt restructuring process from short to medium term loan (5 to 6 years) to make it cheaper for Government in terms of interest payments.
“The holder of this debt is AfreximBank, an international investor in the country’s debt market,” RBM official said.
The RBM official said at the particular time in June 2020, the Malawi Government debt was to the tune of K4.8 trillion, and it was part of this debt that was being restructured from short term, 90 days Treasury Bills to become medium term, that is, 5 to 6 years.
‘Deposits Into Commercial Banks’
According to RBM official, AfreximBank wanted to invest in the local debt market and they transact everything in US dollars.
“For this to happen they [AfreximBank] need local commercial banks through which they can exercise their marketing right. In this case they don’t trade with individuals but rather their account, which is in foreign currency. They bring their dollars into their account, which helps the country to have a stable forex reserve,” the official explained.
Nyasa Times is digging deeper into the story following the release of the Deloitte forensic report, to ascertain whether there were indeed illegal transactions at the Reserve Bank under the watch of former Governor Dr Dalitso Kabambe.
Dr Kabambe aspires to become leader of the ruling Democratic Progressive Party (DPP) at the next convention succeeding former President Prof Peter Mutharika subsequently becoming torch bearer in the 2025 presidential elections.Follow and Subscribe Nyasa TV :