Malawi President Dr Lazarus McCarthy Chakwera has arrived in Riyadh, Saudi Arabia through King Khalid International Airport, ahead of the Saudi-Africa Summit to be held on Friday, November 10, 2023.
Upon his arrival, President Lazarus Chakwera was welcomed by Hon Nancy Tembo, Malawi’ Minister of Foreign Affairs, the country’s Ambassador to Kuwait and responsible for Middle East Younos Abdul Karim and senior Saudi government officials.
Chakwera in Saudi Arabia
Key among the engagements of President Chakwera in Saudi Arabia will be to witness the signing of a financial agreement for the construction of the Mangochi-Makanjira Road and holding meetings with fertilizer manufacturing and oil companies among other bilateral talks.
Chakwera left Malawi on Wednesday via Kamuzu International Airport.
Democratic Progressive Party National Governing Council (NGC) Senior member Hon Ken Msonda has backed the Malawi Government decision of pelting 44 % devaluation on the kwacha.
In a exclusive interview, Msonda said the truth is that the current devaluation has nothing to do with the current President Dr Lazarus Chakwera.
The kwacha devaluation has nothing to do with chakwera as a head of state.
“It is a global economic crisis; international economic hit men are behind it. Many African nations, especially poor nations have devalued currencies. At the moment African nations are in the process of agreeing to trade in their local currencies among African nations using AfrixBank,” he said.
He said Russia is in the forefront funding AfrixBank with billions of dollars and encouraging African nations to trade in their local currencies among themselves using this bank.
He said what is currently happening is an international monetary war between USA, UK, NATO on one hand and Russia, China, Arab nations on the other hand.
“Russia/Ukraine and now Israel/Hamas wars are just the beginning of more problems for poor African nations, Malawi inclusive,” he said.
Msonda said Malawi shall be the worst victim in this case because the country imports too much and exports too little besides depending too much on IMF, World Bank and other western and European countries for budget support and aid.
Reserve Bank of Malawi finally endorsed the exchange rate of K1,700 to a United States Dollar. The new exchange rate is with effect from today 9th November 2023, according to RBM Governor, Dr. Wilson Banda, who issued a statement Wednesday..
The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has been relentlessly calling for devaluation aimed at re-aligning the Kwacha. The MCCCI repeated this call a few days ago cautioning that there should, as a requisite condition, be a guarantee of forex in-flows and safety nets to cushion the poor.
The key strategy in cushioning the poor is to ensure that staple food prices remain contained.
Former Reserve Bank of Malawi Governor Dalitso Kabambe has described Wednesday’s 44 percent Malawi Kwacha devaluation as reckless.
According to Kabambe, there will be no recovery from the macroeconomic meltdown in the aftermath of the devaluation.
Kabambe
He says the devaluation will only make the suffering experienced by Malawians worse, as prices of basic goods and services such as fuel, fertilizer and food items will soar.
Kabambe says looking at the timing of the devaluation, it must be a prior conditionality for International Monetary Fund (IMF) Extended Credit Facility (ECF).
“Since K1,700 per dollar is still below the market equilibrium, we should anticipate further depreciations,” says Kabambe.
According to former RBM governor, Malawians should expect further depreciations of the kwacha as the K1 700 to a dollar exchange rate is still below the “market equilibrium”.
“Furthermore, the devaluation is reckless as the previous one given that the fundamentals of the monetary policy remain helpless and the fiscal consolidation non-existent,”adds Kabambe.
In a statement on Wednesday night, RBM Governor Wilson Banda said the 44 percent devaluation follows the imbalances as well as the mismatch in the exchange rate in cash and telegraphic transfer.
The kwacha was also devalued by 25 percent in May 2022 and since January this year, the local unit has depreciated by 13.1 percent.
The former ruling Democratic Progressive Party (DPP) has cancelled the political rally that was scheduled for this Sunday at Masintha Ground in Lilongwe.
In a statement, the party’s spokesperson Shadric Namalomba says the rally has been postponed until further notice to allow its members join all Malawians in commemorating Remembrance Day, which falls on November 11 every year.
“To the war veterans living, we thank, salute and wish you good health and long life. To the fallen heroes may their souls rest in eternal peace,”says Namalomba in a statement.
Namalomba
The party’s president Arthur Peter Mutharika left the country last week through Chileka International Airport in Blantyre on a private trip accompanied by former first lady Gertrude Mutharika, but details of their trip have remained confidential.
Commonwealth member States commemorate Remembrance Day (Poppy Day) each year to honour those who volunteered, sacrificed, served, fought and died for freedom during the First and Second Wars.
The Malawi’s central bank Reserve Bank of Malawi (RBM) has devalued the kwacha by 44 percent effective today at midnight.
Following the devaluation, the kwacha will be selling at K1, 700 against the US dollar in authorised dealer banks from K1, 180.
In a statement, RBM Governor Wilson Banda says this follows the supply-demand imbalances and mismatch in the exchange rates in the cash and telegraphic transfer markets.
“Spot checks on some market players indicate that the market is able to clear bills at this rate,” says Banda.
The RBM Governor has however, said the bank will closely monitor developments in the market to avoid disorderly behavior among market players that may cause excessive volatility.
