Attorney General Thabo Chakaka Nyirenda has uncovered a massive foreign currency scandal involving financial controllers of non-governmental organizations (NGOs) and managers of commercial banks in Malawi.
The scandal involves collusion to allocate foreign currency to preferred individuals or businesses for private benefit, depriving the government of critical foreign exchange resources.
The illicit process typically involves NGOs requesting foreign currency exchange from commercial banks, selecting banks for transfer, and treasury dealers issuing formal quotations.
The financial controllers then instruct the treasury dealers to allocate the foreign currency to preferred individuals or businesses.
This conduct contravenes the Exchange Control Regulations and the Financial Crimes Act, 2017, and constitutes money laundering.
The Attorney General has urged NGOs, donor-funded projects, and financial institutions to cease dealing in foreign currency contrary to regulations.
He has also instructed the Reserve Bank of Malawi and NGO Regulatory Authority to take administrative measures against non-compliant entities. Furthermore, the Attorney General warned that legal action will be taken against NGOs and individuals involved, seeking compensation for economic damage caused to the country.
The scandal has raised concerns about the effectiveness of regulatory bodies in preventing financial crimes in Malawi. The Attorney General’s office has emphasized the need for accountability and transparency in foreign currency transactions. The development is expected to prompt a thorough investigation and reforms to prevent similar scandals in the future.
