Malawian President Bingu wa Mutharika on Friday accused businesses of causing foreign exchange shortages and vowed action against "enemies of the state."
"Forex shortages are being caused by the business community itself. We have out there a large number of dishonest and greedy business people," Mutharika said at an international trade fair here.
"These are enemies of the state. I will take action against you. This is dishonesty, I want you to know I am angry," he said.
Mutharika, an economist who once headed a regional trade bloc, said "investors" collect local currency and turn it into US dollars and other currencies and "ship it back outside Malawi."
"I know these things and the people who are doing this. These are enemies of the state," he said.
He said last year the poor southern African nation received its highest foreign exchange earnings from tobacco, but "in less than three months all that forex disappeared."
"Where did it go? It was not taken by you Malawians, it was the same business community. Now they are coming to cry for forex shortage."
Tobacco, popularly know as "green gold" here, contributes up to 70 percent of forex earnings to the agriculture-powered economy. The leaf also contributes 35 percent to the state's annual income.
Last year, the crop earned the country a record 162 million dollars.
"Malawi cannot be sweating with tobacco and other produce to benefit a few business people," he said. "All their accounts are in London, in Dubai and other places."
"From now on, you will hear from me. I will take action against you. Some of you better start packing up and go." he said.
Financial experts say Malawi's import cover has been hovering at 1.7 months for the past few years, saying this was too low by international standards.
The experts say Malawi, a landlocked country which imports most of its products and raw materials, needs an import cover of over four months.
Friday, 19 June 2009
Malawi finance minister says no change in economic policy
Malawi will not change economic policies that have helped usher in years of strong growth, newly-appointed finance minister Ken Kandodo said on Friday.
Kandodo told Reuters in one of his first interviews since taking office that the policies in place had been proven to work, even in the face of the global economic crisis.
"This is the same government whose economic policies have delivered in the last four years and, therefore, I don't intend to change anything at Treasury, but continue with polices on the same path," he said.
Kandodo, a former UNICEF financial consultant and businessman who was serving as head of the southern African country's National Food Reserve Agency, replaced Goodall Gondwe as finance minister on Wednesday.
The appointment came as a surprise, with analysts having praised Gondwe for helping Malawi achieve average economic growth of around 7 percent for the past three years.
But Kandodo said that he is up for the challenge and asked for support and confidence from the business community.
"I have so many years of experience in the private sector ... I am quite familiar with issues in the ministry of finance and I would like to tell investors, donors, the public and other stakeholders not to be worried."
He said a key priority over the next five years was to help diversify the country's economy, currently heavily dependent on tobacco, suffering from low demand due to the global crisis.
Tobacco is Malawi's mainstay, accounting for more than 60 percent of foreign revenue.
"With the global crisis, most of our commodities including tobacco now face a slump in demand and the only way to deal with this quagmire is to diversify to other crops like rice which have huge global demand."
The U.K. Economist Intelligence Unit has forecast Malawi will have the world's fastest growing economy after Qatar this year, but the global credit crunch still poses threats to attaining the forecast growth.
"Despite the impact of the credit crunch, I know that my colleague has tackled in the budget that I am due to present soon, the potential threats that Malawi faces with the credit crunch and I am sure we will still attain growth above 7 percent as projected because of growth in other sectors like mining and the telecommunication industry," Kandodo said.
Malawi started uranium production at a $200 million mine in northern Malawi in April, that was expected to boost the country's export earnings.
Kandodo told Reuters in one of his first interviews since taking office that the policies in place had been proven to work, even in the face of the global economic crisis.
"This is the same government whose economic policies have delivered in the last four years and, therefore, I don't intend to change anything at Treasury, but continue with polices on the same path," he said.
Kandodo, a former UNICEF financial consultant and businessman who was serving as head of the southern African country's National Food Reserve Agency, replaced Goodall Gondwe as finance minister on Wednesday.
The appointment came as a surprise, with analysts having praised Gondwe for helping Malawi achieve average economic growth of around 7 percent for the past three years.
But Kandodo said that he is up for the challenge and asked for support and confidence from the business community.
"I have so many years of experience in the private sector ... I am quite familiar with issues in the ministry of finance and I would like to tell investors, donors, the public and other stakeholders not to be worried."
He said a key priority over the next five years was to help diversify the country's economy, currently heavily dependent on tobacco, suffering from low demand due to the global crisis.
Tobacco is Malawi's mainstay, accounting for more than 60 percent of foreign revenue.
"With the global crisis, most of our commodities including tobacco now face a slump in demand and the only way to deal with this quagmire is to diversify to other crops like rice which have huge global demand."
The U.K. Economist Intelligence Unit has forecast Malawi will have the world's fastest growing economy after Qatar this year, but the global credit crunch still poses threats to attaining the forecast growth.
"Despite the impact of the credit crunch, I know that my colleague has tackled in the budget that I am due to present soon, the potential threats that Malawi faces with the credit crunch and I am sure we will still attain growth above 7 percent as projected because of growth in other sectors like mining and the telecommunication industry," Kandodo said.
Malawi started uranium production at a $200 million mine in northern Malawi in April, that was expected to boost the country's export earnings.
US donates $50,000 testing machine
The United States of America through its drug company - Pfizer - has donated a high performance liquid chromatography machine to Malawi Bureau (MBS) of Standards valued at $ 50,000.
Pfizer, a major US pharmaceutical company donated the machine which is expected to assist MBS in conducting various analyses of food such as the determination of the nutrient values.
The machine is also expected to help MBS to identify banned or substandard ingredients that may be found in food products.
The new equipment will also allow MBS laboratories to test more parameters and speed the delivery of analytical services to its customers in pursuit of high quality food products for Malawians.
The donation is also said to have complemented the ongoing work that US is supporting in the southern African country in the areas of health and nutrition.
US ambassador to Malawi Peter Bodde highlighted the importance of the equipment saying it will help MBS regulate products. “It will enable the MBS to better identify - and regulate - products that are banned or that contain substandard ingredients a process that has obvious benefits for the health of Malawians,” said Bodde.
The ambassador also said that the project was a true example of the private sector working hand in hand with the public sector to achieve spectacular results ion addressing the development needs of Malawi.
Pfizer, a major US pharmaceutical company donated the machine which is expected to assist MBS in conducting various analyses of food such as the determination of the nutrient values.
The machine is also expected to help MBS to identify banned or substandard ingredients that may be found in food products.
The new equipment will also allow MBS laboratories to test more parameters and speed the delivery of analytical services to its customers in pursuit of high quality food products for Malawians.
The donation is also said to have complemented the ongoing work that US is supporting in the southern African country in the areas of health and nutrition.
US ambassador to Malawi Peter Bodde highlighted the importance of the equipment saying it will help MBS regulate products. “It will enable the MBS to better identify - and regulate - products that are banned or that contain substandard ingredients a process that has obvious benefits for the health of Malawians,” said Bodde.
The ambassador also said that the project was a true example of the private sector working hand in hand with the public sector to achieve spectacular results ion addressing the development needs of Malawi.
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