The Centre for Democracy and Economic Development Initiatives (CDEDI) has said that cabinet ministers, top government officials, the ruling elite and top banking officials, have captured the economy and turned the glaring mismatch between the official dollar rate and that on the black market into an instant lucrative business at the expense of the deserving business community.
Addressing the media on Thursday in Lilongwe, CDEDI executive director Sylvester Namiwa said according to their findings, this trend is to blame for the further weakening of the local unit against the US dollar since the latter is being traded without any backing.
“A case in point is that after the cancellation of the pre-loaded visa cards, that was subjected to abuse, commercial banks have put their foot down and are not selling the much sought-after US dollar, currently pegged at K1,751.00 on the official market.
“Shockingly, the accumulated forex is easily accessed by powerful ministers and ruling elite who travel on the pretext of transacting government business. In their application for forex, they inflate their requirements and the moment they get the dollar, they immediately sell it to the desperate business community at black market rate.
“Malawians may wish to know that at the height of this forex crisis, a senior Cabinet minister and influential Malawi Congress Party figure, whose name we have but will withhold for now, has the luxury of buying real property in US dollars.
“Just recently, the flamboyant politician applied for $450,000 at one of the commercial banks, which is about K788 million at the official rate, but took the money directly to a Malawian businessperson of Asian origin, where he sold the dollars at K4,200, translating to about K1.8 billion, making an instant profit of almost K1 billion,” he said.
This means, according to Namiwa, the said business person will import goods and services reflecting a black market rate, when if it were not for this Cabinet minister, he could have accessed the same dollars on the formal market.
“The above scenario, probably explains why Cabinet ministers, top government officials and party officials are hoping from one country to another, not to serve Malawians, rather siphoning the US dollar from the formal system to the black market.
“And details have emerged that some powerful individuals are, actually, getting the forex direct from the Reserve Bank of Malawi (RBM). Given the situation above, it is clear that there is total chaos in the Malawi money market where both the central bank and commercial banks are not accountable, let alone transparent, in their dealings. This development has, however, impacted negatively on the welfare of Malawians, where prices of basic goods and services are going up on a daily basis.
“Unless something is done to stop this illicit business, the gap between the conventional and black market will continue to widen and the forex scarcity will worsen.
“The above, coupled with lack of government incentives to encourage diaspora remittances, paints a gloomy economic picture. The Exchange Control Act is discouraging those in the diaspora from channeling their hard-earned savings through their Foreign Denominated Accounts (FDAs) since it is compulsory that larger chunks of their money will be converted into the local unit automatically.
“To avert a forced loss, the Act has rendered FDAs redundant, since mechanisms have been put in place to ensure that savings of Malawians in the diaspora get home but at the same time enjoy the black market rate. Apparently, some Malawians have information and names of those involved but have, unfortunately, resigned to fate, owing to the fact that mandated State organs such as the Anti-Corruption Bureau (ACB) and the Financial Intelligence Authority (FIA) have been captured by the same people at the centre of this illicit trade.
“CDEDI, however, hereby reminds Malawians that as per the wording and spirit of Section 12 of the Republican Constitution, they should not feel helpless or intimidated, rather they should stand up to address the crisis that is threatening their survival and that of millions of other Malawians,” he said
In view of the above, CDEDI said it intends to revive the people power hashtag to dismantle this cartel and liberate the economy by using the lifestyle audit and naming-and-shaming to expose those involved.
“In order to give back power to the people, CDEDI has since come up with an initiative dubbed The People Power Forum’ where the citizenry will have a chance to ‘nominate’ public officers whose lifestyle, wealth and property is not consumerate with their legitimate earnings. Thus far, CDEDI has engaged a reputable international institution to manage the ‘nomination ‘ in a manner that does not give room for manipulation,” he said
Namiwa said the process will process take a tips off anonymous route in the following categories: the executive (Cabinet ministers), political appointees (advisers and State residences employees), the legislature (Members of Parliament), the Judiciary (Judges, Magistrates and Lawyers) and civil and public servants.
“The format is simple: A dedicated toll free line will be made public where the citizenry will be required to push their vote in line with the above mentioned categories, singling out those that they wish to justify their lifestyle against their earnings publicly as a sure way that they are not beneficiaries of theft, corruption and illicit proceeds.
“Needless to say that a good citizen pays tax, therefore, the standard expectation would be that all business proceeds should be accompanied by proof of payment of tax to the Malawi Revenue Authority (MRA), to clear any doubts.
“By the end of the day, Malawians will be given an opportunity to distinguish between honest and corrupt public officials. This public court will be held every fortnight and a draw of names of candidates from the different categories will be conducted.
“It is sad to note that after voting, Malawians have literally nothing that gives them leverage to invoke the powers contained in the Constitution. This is the reason those elected become untouchable and in the process loot and plunder public coffers without remorse,” he said.
CDEDI has urged Malawians within and outside the country, groups and institutions to come forward and provide both technical and material support to help make this dream of bringing back people power a reality.
