Government through the Reserve Bank of Malawi (RBM) has stopped monitoring money which the country’s Non-governmental Organisations (NGOs) receive from their donors.
In September last year, RBM issued a directive to all NGOs in the country through the Council for Non-governmental Organisations (Congoma) that all NGOs should be submitting their financial reports to RBM.
In an interview yesterday, RBM spokesperson Ralph Tseka said the directive was one of the many directives to police people and organisations on foreign exchange in a fixed exchange rate regime.
He, however, said the directive was automatically dropped after the floatation of the kwacha in May this year.
“Now that we have a floating exchange rate regime, this directive would be inconsistent with the liberalised exchange rate regime. After the devaluation of the kwacha and subsequent floatation, some of the directives were rendered irrelevant and this is one of them.
“Since we are now operating in a liberalized exchange rate environment, this directive automatically dropped off,” said Tseka, in a response to an e-mailed questionnaire.
He said the directive was necessitated by the need to monitor inflows of NGOs because the country was going through a serious shortage of foreign exchange.
“It was observed that since NGOs receive their funding in forex, there was need for them to receive the forex through a bank then implement their projects in any way they like.
“There were rumours that time that some NGOs were receiving money in their foreign accounts and were not repatriating the funds to Malawi because the exchange rate at that time was not right,” Tseka said.
In an interview recently, Congoma board chairperson Voice Mhone said at this year’s Congoma Annual General Meeting that one of their resolutions was to ask RBM to reverse the directive it made.
“When the directive was made in September last year, we wrote RBM, asking them not to implement the order. Since then, they have not responded to our letter. We would like the RBM to reverse the order in writing,” Mhone said.
Tseka has, however, said there is no need to write the NGOs a letter as the directive was dropped off naturally the time the kwacha was floated.
The move to monitor NGO money was perceived at that time as a government tactic to stifle descent from NGOs which were very vocal critics of the late president Bingu wa Mutharika’s government.