‘Address governance lapses at Reserve Bank of Malawi, Parliament’
Malawi’s influential newspaper published on Saturday, Weekend Nation, has used its editorial comment to add credence to experts suggested best practices to ring fence the Reserve Bank of Malawi (RBM) from abuse owing to its legal framework which provides that the central bank’s head, the governor, should also double as its board chairperson.
The paper made the editorial comment in an extended coverage to the recent revelations of ‘abnormal remunerations’ at the RBM where the bank’s former governor Dalitso Kabambe’s salary is said to have more than tripled between 2017 and 2020, let alone the salaries for the bank’s directors also shot up exponentially during the same period.
Kabambe in an interview on Zodiak TV defended his K24 million monthly salary saying it was decided by the Board of the Bank and it was based on his years of service and performance in the Bank.
According to him, RBM-which is a lender of last resort-remains a crucial player in regulating the country’s economy, “as such this is a matter of national importance.”
In its report, Weekend Nation quoted experts imploring on the Tonse Alliance administration to devise lasting remedial measures to ensure the bank meets appropriate corporate governance standards.
The paper said while the Reserve Bank Act provides for its independence, the environment created, “lacks democratic princiles.”
It urges the government to “seriously and critically” address funadamental lapses of governance.
The paper said the same should be instituted at Parliament where members determine their own salaries and and condition of service.
In quotes reported by the paper, renowned legal expert Justin Dzonzi said there should be mechanisms that perhaps would distance certain decision-making processes from the individuals.
“We have no problem with the independence of the central bank with monetary policy issues but when it comes to conditions of service they should be totally independent. Perhaps the power should be vested with the Ministry of Finance so that decisions affecting their conditions of service should reflect the general status of the economy,” Dzonzi said.
With respect to members of Parliament, Dzonzi said their conditions of services should also be vetted by an independent body “to decide what would be competitive packages for them in an economy like Malawi.”
Happy Kayuni a political and administrative studies lecturer at Chancellor College is quoted observed that what is happening at RBM and Parliament is not in tandem with governance issues and asked government to demonstrate what it has been promising about good governance and rule of law by, among other things, starting with correcting these institutions.
‘‘The reforms exercise which government is undertaking should carefully look into these matters. We know that some of these institutions are highly politicised. For instance, members of Parliament are used to build support of government agendas,” he said.
Kayuni also suggested that there should be an independent body to look at the operations and conduct of these institutions to correct such issues and ensure there is sanity in the institutions.
Meanwhile, auditors have instituted a forensic appraisal at RBM to establish how its affairs have been managed in recent times and the audit results would be concluded in the first quarter of 2021 and central bank’s spokesperson Onellie Nkuna said the findings of the forensic audit will be shared with all its stakeholders once the audit is complete.
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RBM oversees the financial sector. It is obviously logical that the salary for the big guy at RBM to be benchmarked a little higher above the industry itself. RBM is a bank for banks. Go and do a survey in the industry what the CEOs of these little banks are receiving. I mean u want the Governor himself to be receiving what?. Come on people, we just have to accept that there are some jobs which are well paying and in itself it’s an incentive to pursue such jobs.
The recommendations appear plausible.
Lets face it, we mean we can pay a governor Mk 24 M with our economy? Something is wrong here. OBSENE!!!
24 million a month seriously..that’s why he was so big headed
Absolutely nothing wrong with that salary considering the status of the job. Thats roughly less than half a million rands, or 30 thousand dollars. Check what other Reserve Bank governors are earning in the continent and you will find that Kabambe ranks among the lowest paid. The Reserve Bank governor’s job siwuphunzitsi kapena ukapentala. Dont act surprised, its normal for the guy to earn that much. Dont even mention the crap of ‘considering the state of the economy nonsense’. How much did the Tonse Alliance lawyers get for the job they did? Is it not billions?.
I do not feel the comparisons would make any sense. What size is their economy compared to ours?
Our economy is reliant on only one crop, no one wants to buy, yet we keep on growing it. You want to compare this with economies which have harbours, natural gas, gold, diamond, platinum mines etc.
Be realistic. Until we have people who want to and know how to grow our economy, stay away from comparisons.
The problem with bias and parochial thinking is seen in your comment. Malawi has MANY avenues of making money. Dont just think tobacco is the only way. We pay taxes also. The problem is the WHOLE system, not just Kabambe. Why didn’t the courts consider the size of our economy when they gave billions to the Tonse Alliance? Why didn’t the MPs consider the size of the economy when they awarded themselves hefty allowances? If Kabambe was a nyau you would not have had problems. Do not try to save money through Kabambe as if he is the only CEO… Read more »
You are right. You should question someone who calls himself Anzelu. Such people are not as intelligent as they claim to be
Some of these countries your comparing to have resources that enable them to afford these high salaries. Lets face facts if you compare Malawian teachers salaries to those of their counterparts, you will discover that Malawian teachers are under paid. Similarly, Malawian doctors are probably underpaid compared to their counterparts in other countries. If we decided that they should be payed in line with their counterparts in other countries, would the country afford it? Where would it get the money? Salaries must be realistic in line with the economic situation in the country. If one feels that the money he… Read more »
Mbuli iwe, you do not compare salaries bcoz economies are different. Salaries are tied to the economic status of the country. K24 million salary is just obscene in an economy like Malawi. Kabambe belonged to a group of pipo who captured the state.
No Malawian is paid In dollars. It is totally wrong therefore to convert a Malawian salary into USD. Compare the Salary of the president down K3,000,000 and governor K24,000,000 in the same country, professor versus ordinary public officer? Any logic in Malawian sense where majority citizens live on zero Kwacha per day? Come on guys, let us use common sense, intelligence and justice.
Concern Citizen very correct. The board members should be STUPID ENOUGH.
As forensic audit is under way at RBM, let another indipendent body begin with a similar audit at parliament. MPs should not think that they are untouchable; we employed this bunch of people many of whom have low IQs.
RBM needs thorough audit when audit report is out let parliament scrutinize and fish out all skeletons so that we can sanitize this institution and put right policies to stop future abuse. Its almost like the untouchable institution in this country. I bet cashgate happened bcoz RBM played along, go back all the way to the time of perks ligoya to current. The problem is that if RBM is rotten it simply means our economy is rotten too that’s the head or engine of our economy so let’s fix that.
Check RBM website you will find they have been audited annually. audited accounts and annual reports are filed on the website for the public consumption. As required, the audit report is signed by two auditors one local and one foreign to enhance quality and also avoid unreasonable suspicion from the likes of you.
We are not talking of doctored and sugar coated audit but a thorough audit which is able to point out why account No 1 was being abused and RBM never raised an issue until people were caught with cash or other scandals emerged? That’s the kind of audit we need. The rot to be fished out and double sanitized.
Very correct. Why didn’t RBM fine the commercial banks that were involved in cashgate? It’s because RBM was part of the syndicate!
I also doubt it if cashgate could have happened without the knowledge of the RBM. It did know, or it should have known.
Vilemi dazi is a baby, he thinks government is run like a church session