Mwanamveka denies involvement in Reserve Bank misrepresentation fiasco

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Mwanamveka denies involvement in Reserve Bank misrepresentation fiasco
Mwanamveka denies involvement in Reserve Bank misrepresentation fiasco

Africa-PressMalawi. Former Minister of Finance under the Democratic Progressive Party (DPP) government Joseph Mwanamveka had distanced himself from the misrepresentation fiasco at the Reserve Bank of Malawi saying he was not Minister of Finance during the period under concern.

Mwanamveka further exonerated himself by adding that the matter appear to arise from normal dealings between Reserve Bank Malawi (RBM) and International Monetary Fund (IMF) as the central bank goes about its operations under its mandate as prescribed by the Republican Constitution.

The media has been flush with reports that IMF has discovered that RBM may have misrepresented some figures in its GRA and NIR reporting in the period from 2018 to 2019, which in turn led to the fund making decisions that it should perhaps have not made such as disbursing to Malawi a sizable chunk of funds under the Extended Credit Facility (ECF).

“RBM is an independent body, which carries out its normal operations independent of the executive and even independent of the Ministry of Finance, just like the judiciary and ACB are to the Ministry of Justice. It is normal for RBM to report variously on so many issues, including on Net International Reserves (NIR) and Gross Reserve Assets (GRA) to international organizations such as World Bank or IMF without consulting the executive, or indeed the Ministry of Finance. It is in its mandate,” said Mwanamveka in an interview with Nyasa Times.

Mwanamveka, a DPP spokesperson on Economy and Finance, said has always been a straightforward and transparent manager in as far as matters of the economy and finance are concerned.

Mwanamveka protesting innocence cited his professional record starting from 1990 to 1996 at RBM; CEO for the Continental Discount House (CDH) from 1998 to 2007; Malawi Savings Bank (MSB) from 2007 to 2009; Secretary to the Treasury (ST) from 2010 to 2012; then rising to occupy different cabinet portfolios including being the last DPP Minister of Finance.

It was during the time he was Minister of Finance that the IMF resumed budgetary support to Malawi after being frozen for several years following the discovery of Cashgate scandal during the Dr Joyce Banda’s administration.

RBM is responsible for submitting research findings and reports that are used by the IMF to determine state readiness or eligibility of the country for various lines of credits or budgetary assistance including the Extended Credit Facility (ECF). The reports have been found to contain fabricated numbers.

Our sources at RBM have confirmed that there have not been any conclusive decision on whether Malawi should refund the money as has been reported in some media outlets. IMF’s African Department representative, Abebe Aemro Selassie is quoted in the media to have said that there are remedial measures currently taking place to correct the ‘misrepresentation’, and hoped that the situation would be corrected and normalized.

The IMF has over the past year been reluctant to resume its Extended Credit Facility(ECF) program to the Malawian government due to a number of factors among them lack of expenditure discipline, inflated AIP and also corruption. The ECF is always key in entrenching macroeconomic stability, preserve debt sustainability, and advance governance reforms among countries with protracted Balance of Payments (BoP) challenges.

Under the Reserve Bank of Malawi Act as promulgated by Parliament in 2018, RBM is said to be independent of the executive as well as the Ministry of Finance when carrying out its operations mandated to make certain disclosures to international organizations, including Breton Wood institutions such as the World Bank and IMF without consulting the executive or the Ministry of Finance.

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