Malawi in a deeper financial crisis

Malawi Congress Party’s Felix Jumbe who is also former President of the Farmers’ Union of Malawi (FUM) claims Malawi is in a deeper financial crisis. Below is what Jumbe posted on his Facebook account (UNEDITED):

Malawi in for a Financial Crisis like that of Zimbabwe.

1. Government borrowing direct from Reserve Bank is restricted by the Reserve Bank Act to 20% of government revenue.

2. Government borrowing from Reserve Bank is also restricted to 25 % of government revenue by The Public Finance Act whose controller is Secretary to the Treasury.

3. The Governor of the Reserve Bank and the Secretary to Treasury are the government officers who are to ensure that these limits are not exceeded.

4. By end August 2013, barely two months into the new budget, government has borrowed directly from RBM in excess of 114 billion over the legal limit by both acts of 72 billion Kwacha by 42 billion Kwacha.

5. This in effect is manufacturing money which is the recipe for depreciation of the Kwacha.

6. Watch out on what will happen to the value of the Kwacha very soon.

7. The Reserve Bank Governor and The Secretary to the Treasury must resign on negligence and for failing to guide government.

8. The Presidential Jet was sold at 15 million USDs and we were told that the money is being used to buy maize. The truth is that there is no evidence that the money came into Malawi and if they have received let them show the SWIFT code acknowledging receipt by the Reserve Bank or and Government account anywhere that might be illegally opened.

9.The maize that got rotten 31 million kgs is equivalent of 1100 trucks of 30 metric tons each. Loading Five trucks per day it would take 220 days. Where has this maize gone.

Apart from this direct borrowing, government has been raising money through the treasury bills.

This is nothing but the truth, if it means dying for this truth I Felix Jumbe I am ready to die and join those who died for our freedom in 1959.