11 November 2016

Malawi: Govt Introduces 2,000 Kwacha Banknote

Photo: Mo Cuishle
kwacha

The Reserve Bank of Malawi (RBM) has introduced a 2,000 Malawi kwacha banknote to try to ease desperate cash shortages.

Central bank governor Charles Chuka told a news conference that the development follows the devaluation of Malawi Kwacha on the market as well as economic turmoil.

He the new bank note will be put intocirculation in December this year but is expected to become almost worthless.

"Due to economic crisis and devaluation of our kwacha, the RBM will introduce the K2000 note that is expected to be on the market in the coming month of December," said Chuka.

Chuka said the new bank note will bear the portrait of freedom fighter Reverend John Chilembwe while the motif on the back of the K2,000 note will be the Malawi Univesity of Science and Technology at Ndata in Thyolo.

Some quarters says poor Malawians should expect tough life because of the development.

Prices are doubling every day and food and fuel are in short supply in the southern African nation.

But previous issues of new banknotes have done little to curb the cash crunch faced by Malawias.

The development comes after Chuka told Parliamentary Committee on International Relations that the high inflation and high interest rates prevailing in the country are not a result of lack of knowledge among technocrats including those at the Central Bank but are fruits of political choices.

According to Chuka, RBM is only responsible for the management of inflation and interest rates but the power to ensure that the two rates are low rests in the hands of politicians.

"Malawi does not need advice. Your Minister [of Finance Goodall Gondwe] has been involved in advising other countries and those countries have been successful. In Malawi, issues are not about technical advice but political choices. We, the Reserve Bank and the Treasury work together almost on daily basis. We know what we want. We know what needs to be done. We know what Malawi needs in the next 50 years.

"Sometimes, I ask myself as to what is important for the politician? Is it to win an election or reduce poverty? It might be, with this poverty, you might lose a seat. But the way, I know Malawian politics, somehow it is still easy for you to win a seat. But why is it that Malawians are getting poorer and poorer every year but are still giving you a seat? What is the problem?" Chuka wondered.

He gave an example of Rwanda where he said despite the availability of few technocrats in that country, people have just checked their politics and the economy is flourishing.

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