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.
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.
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.
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.Follow and Subscribe Nyasa TV :