(NYASATIMES) Reserve Bank Governor fired

Reserve Bank Governor fired
By Nyasa Times
Published: July 1, 2009

Malawi President Bingu wa Mutharika has told Reserve Bank Governor Victor Mbewe that his position is untenable and he seizes to be head of the institution by today (Wednesday).

The highly placed source at Office of President and Cabinet (OPC) said Mbewe was summoned by Chief Secretary to the President Bright Msaka yesterday where he communicated that the President has lost confidence in him. Mbewe has been forced to tender his resignation by Wednesday.

The official who spoke in his personal capacity and refused to be named, said Mbewe and former finance minister Goodall Gondwe did not defend the President when the IMF team recently visited Malawi.

“The President felt gravely betrayed by Mbewe and Gondwe after they failed to defend his policy of overpricing the Kwacha and reasons not to devalue the currency. The Reserve Bank Governor has also fallen out with the President for failing to close money exchange Bureau due to the shortage of forex,” said the official.

The IMF report accused the Mutharika government of gross abuse of public resources especially in statutory corporation, government overexpenditure and also attacked the administration for purchasing fertilizer for the subsidy programme in the previous financial year’s budget.

Mutharika wants somebody who can understand his economic policies both as Finance Minister and central bank head in the face of forex scarcity and IMF nailing report.

Mbewe had so far been complying with Mutharika’s brand of economics, but was powerless to close Bureau because the RBM has appealed to the Supreme Court a court order that stopped his institution from effecting any closures.

The governor is reported to have told Msaka that the central bank is not a law enforcement agency and any forex bureau found to be contravening the Banking Act are referred to the Fiscal Police Department for action.

Meanwhile, Mbewe has accepted that he will not enter in confrontation zone with the Ngwazi Dr Bingu wa Mutharika who is adamant to pay contract termination dues only offering three month salary.

Mbewe and Bright Msaka the Chief Secretary were not readily available for comment on this breaking news alert.