By Mercy Matonga:
Attorney General (AG) Thabo Chakaka Nyirenda has accused some of the country’s non-governmental organisations (NGOs) of engaging in illegal foreign currency trading that is allegedly depriving the nation of crucial forex.
In a letter seen by The Daily Times, addressed to the NGO Regulatory Authority (Ngora), Nyirenda is accusing the NGOs of colluding with banks and private businesses to facilitate the movement of forex received from abroad for the benefit of private traders.
The AG says, legally, banks should only transfer foreign currency to third parties after it has been deposited with them and not directly from the foreign currency accounts of individuals or institutions such as NGOs.
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In the letter addressed to the Chief Executive Officer (CEO) of the Bankers Association of Malawi and copied to the Secretary to the President and Cabinet and the Reserve Bank of Malawi (RBM), the AG claims the government is missing out on benefits that could have been accrued had the banks sold the forex legally.
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Chakaka Nyirenda has threatened legal action against this malpractice and singled out some senior officials in the banking industry as culprits.
“Accordingly, I would like to warn you that I will take legal action against any NGO and all those involved in illegal dealings in foreign currency by demanding compensation on behalf of the Government of the Republic of Malawi for the economic damage caused to the country,” the AG’s letter reads.
He warns that the directors of the concerned NGOs and the senior management teams of banks will be held personally accountable for failing to uphold regulations.
Chakaka Nyirenda states that his office has gathered evidence of collusion among the financial controllers of local and international NGOs, donor-funded projects and treasury departments within commercial banks.
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He has also criticised RBM for inadequate enforcement of the Exchange Control Regulations Act in addressing the issue.
“By copy of this letter, I urge [RBM] to take appropriate administrative measures against commercial banks or senior managers involved in this malpractice,” the letter says.
Chakaka Nyirenda confirmed the authenticity of the letter to The Daily Times and reiterated in an interview that he will take legal action against the NGOs involved.
“This includes all NGOs that received donations and the banks implicated,” he said.
The AG could, however, not specify the number of organisations and banks implicated.
“All NGOs that received donations and all banks are involved and regrettably, some donor-funded projects within government ministries and departments as well,” he added.
Both BAM CEO Lyness Nkungula and RBM spokesperson Mark Lungu said they had not received the letter.
Ngora CEO Edward Chileka Banda requested more time when contacted.
