The Reserve Bank of Malawi (RBM) Governor, Charles Chuka, has said 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.
Chuka said Malawi’s public sector is not short of technocrats and such technocrats have been to the same schools that the International Monetary Fund and World Bank people who keep on advising the country have been.
“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.
“Malawi has the largest number of technocrats, who are experienced for that matter, but they are just moving in circles. They will read the politics very well and they are good at it. We are very good at interpreting politics, we will read it and we will behave accordingly,” he said.
Chuka told Parliamentary Committee on International Relations yesterday that the Reserve Bank’s role is to preserve the value of the Malawi Kwacha and the interest rates are currently high to ensure that people who have the local currency continue keeping it instead of rushing for foreign currencies.
“It is, therefore, up to the politicians to ensure that the country produces more, in terms of food such as maize, so that we can reduce inflation which will in turn directly compel us to reduce interest rates,” he said.
Vice Chairperson of the International Relations Committee in Parliament, Alex Meja, said the politicians still need the technocrats to check their actions.
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