The Kwacha Was Devalued & more –22nd June 2023

Muli bwanji from BA! This is the Rorshok Malawi Update from the 22nd June twenty twenty-three A quick summary of what's going down in Malawi.

The Kwacha was devalued.

On Monday the 19th, the Reserve Bank of Malawi (or RBM) and the authorized dealer banks (or ADBs) held a foreign exchange auction where they increased the Kwacha-to-US-dollar exchange rate to 1,063 Kwacha per dollar with immediate effect. This is roughly a two percent increase.

Despite these new figures, ADBs are still trading the Kwacha at an average of 1,550 Kwacha per dollar, meaning there is a 40 percent difference between the new exchange rate and the one on the market. As such, the real value of the Kwacha is somewhat unknown.

Edward Chilima, an Economist, said the mismatch of the rates widens the exchange rate gap even more, because most transactions happen on parallel markets, cash transactions and bureaus, where the rates are much higher than the new ones.

However, Wilson Banda, the RBM Governor, feels the auction was successful.

Unfortunately, the Kwacha isn't performing well on several fronts.

On Tuesday the 20th, the National Statistics Office (or NSO) published data showing that the country's year-on-year headline inflation rate has hit a ten-year high. It hit a little over 29 percent this May, and it continues to rise. The NSO attributed this to rising food prices. Their data showed that the inflation rate was at roughly 8 percent in August twenty twenty, and it has risen without interruption since.

On Tuesday the 20th, John Kapito, the Executive Director for the Consumers Association of Malawi, said that consumers are witnessing the sharpest rise ever, with no coping mechanisms in place.

Kapito's sentiments are reflected in yet another study by the United Nations Economic Commission for Africa, which lists Malawi as one of the top three countries in Africa with the highest working poverty rate. The working poverty rate is the proportion of the employed population living in poverty despite being employed. It implies that, although people are employed, their wages aren't enough to alleviate poverty. The study says Malawi comes at position three at 70 percent, followed by Madagascar at 77 percent and Burundi at 80 percent.

Labor Rights and Economic Experts have attributed this data to "wages that have remained stagnant despite the rising inflation rate".

Amidst all this economic instability, a local media platform revealed that a syndicate externalizes over ten billion Kwacha - approximately ten million dollars - worth of forex every month.

A few weeks ago, the fiscal police at Kamuzu International Airport arrested five women for possessing 338 bank cards. The media outlet revealed that these women are part of this syndicate, and that they externalize forex using multiple systems involving politicians and banks, among others.

They said the women's arrest was a scam gone wrong, as they were only trying to scare the sponsors to increase their commission, but the story leaked to the press.

The story implicates officials from the Malawi Police Headquarters Criminal Investigations Department, fiscal police, Airport Police, the Reserve Bank of Malawi, ministers, and several local Asian businesses. It also involves other countries including Zambia and South Africa.

You can read the full story in our show notes.

In our last episode, we mentioned that the Electricity Supply Corporation of Malawi (or ESCOM) had asked the Malawi Energy Regulatory Authority (or MERA) for a 70 percent tariff hike from twenty twenty-three to twenty twenty-seven. In other words, ESCOM has projected their tariffs for twenty twenty-three- twenty twenty-seven based on the cost of their operations, and that forms the basis of their application, which MERA may or may not approve after the public hearing.

On Friday the 16th, MERA released a statement saying they will conduct public hearings on ESCOM’s application in July. The hearings are scheduled for the 10th in Blantyre, the 12th in Lilongwe, and the 14th in Mzuzu. They said only those invited can attend the physical hearings, and that everyone else can watch their live streams on yet-to-be-announced platforms.

They asked the general public and stakeholders who wish to have specific issues addressed during the public hearings to submit their comments in writing to their Lilongwe offices by Thursday the 29th of June.

We have the physical address in our show notes, and ESCOM’s application there too.

The country lost a renowned actor and playwright, Thlupego Chisiza, on Sunday the 18th.

His sister Maesidiso said Chisiza had just been diagnosed with diabetes and was set to go for a checkup on the day of his death because he had complained about feeling weak. He was pronounced dead upon arrival at the hospital. He was forty years old.

Chisiza contributed immensely to the growth of the theater in Malawi. Many believed he carried the mantle of his late father, Du Chisiza Jr, who is considered the father of theater in the country. He was laid to rest on Monday the 19th.

At the time of his death, Chisiza had partnered with his brother Tiwonge to produce and premiere a film titled Belinda. Theater lovers are hoping the film was completed, and that it will uphold Chisiza’s legacy.

The Malawi Police Service (or MPS) made several arrests concerning cybercrimes.

On Friday the 16th, the MPS released a statement warning locals not to deal with a fraudulent company called Famijo Auto Traders. The company is based in Blantyre. Famijo advertises that it facilitates the importation of second-hand motor vehicles from Japan on behalf of its clients, but the MPS found that the company defrauded and stole from its clients.

MPS said they are currently investigating six fraud and theft cases involving over forty million Kwacha, which is about thirty-nine thousand dollars, and that they are working on taking down Famijo’s digital adverts. While the company owners have been arrested, the MPS has asked other locals who feel they might’ve been duped to report to their nearest police station.

In a somewhat similar occurrence, the police arrested a twenty-six-year-old local, Innocent Kananji, for impersonating Meryln Yolamu, the Inspector General of the Police…

On Monday the 19th, the MPS said that Kananji created a Facebook page bearing Yolamu’s name and photo, and allegedly used it to tell victims he would offer them a job in the MPS if they paid him. He duped unsuspecting youths of money amounting to 150 thousand Kwacha – about 150 dollars.

The police are also investigating thirteen other Facebook accounts that Kananji had, most of which had female names and pictures. They are investigating what he used these accounts for, but said Kananji will appear in court for cyber-scamming. The MPS has asked spam victims to report to their nearest police station.

In the latest development, a twenty-five-year-old local, Christopher Mbewe, shared his girlfriend’s nude pictures on social media last month after the two argued. Mbewe also sent the pictures to the girl’s father.

On Monday the 20th, local media revealed that the Chikwawa Magistrate Court had convicted Mbewe and ordered him to pay a fine of four hundred thousand Kwacha – about 390 dollars – or spend eight months in jail.

Mbewe’s mitigator asked for leniency considering that Mbewe is a university student and first-time offender, but Sub-Inspector Emmanuel Namarwa who works as a State Prosecutor at Chikwawa Police Station said that Mbewe’s behavior was inhumane and traumatizing.

Mbewe is currently at Chikwawa Prison.

Senior Chief Kalumo of Ntchisi District was removed from his position last month. Kalumo is the area the chief leads. The actual name of the chief is Yohane Ndudu. Recall that chieftaincy runs within one Royal family.

Local media shared two letters confirming the news. In one letter, President Chakwera wrote to Chief Kalumo to notify him of his removal from the position of Traditional Authority Kalumo with immediate effect for failure to exercise his duty diligently. The letter was dated the 27th of May.

The other letter was dated the 15th of June and was directed to Nundu, from the Ministry of Local Government, Unity and Culture. It bore the same news, but also requested that the Royal Family choose a replacement – an heir – for the throne.

That’s it for this week! Thanks for joining us!

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Pitani bwino!