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RBM’s ‘suspicious’ payouts to chiefs

Local government and Central Bank in blame game, fail to explain who initiated the payments in the system

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Onilie Nkuna

Malawi News is in possession of spreadsheets that show money transfers from the Reserve Bank of Malawi (RBM) to various traditional leaders through various commercial banks.

The payments, taking place between December 1 and December 22, 2020, went to various traditional leaders including senior chiefs, traditional authorities, sub-traditional authorities, group village headmen and village headmen.

The list shows names of a number of chiefs with corresponding amounts and their banks. Some of the names on the list include traditional authorities Kalembo, Ndindi, Pemba, Mkoola, Kachindamoto, Senior Chief Nyambi and Senior Chief Mbwana.

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Others are Kalolo, Makanjira, Khongoni, Katuli, Fukamapiri, Ngokwe, Mpando and Inkosi Mzikuobola.

The payments went through various commercial banks in the country.

Interestingly, in some of the cases, the payments are not uniform such that a junior traditional leader gets an amount for a traditional authority. In other cases, traditional authorities are getting an amount meant for group village headman.

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We asked RBM and the Ministry of Local Government about these payments and why they are different.

The Ministry of Local Government disowned the payments, saying they did not originate from them. On the other hand, RBM said government was better placed to explain the payments in question.

Spokesperson for Local Government, Anjoya Mwanza, said RBM was better placed to comment on the payments. She added that chiefs’ payments are decentralised and are paid by each district council, not local government at Capital Hill.

“The chief’s payroll is decentralised to each district council. As such, district councils make monthly honoraria to the chiefs. Payment of honoraria is done through the bank accounts of the chiefs,” said Mwanza.

On her part, the then Reserve Bank spokesperson Onilie Nkuna said government was better placed to comment on the payments.

She said Government related transactions are initiated in the system by government itself and the central bank does not process payments or salaries of beneficiaries.

“Government related transactions including salary payments are initiated in the systems by the Government. Once Government loads in the systems, RBM only conducts the due banking related processes.

“With regard to salary payments, a lump sum is loaded in the system by Government and thereafter RBM processes the lump sum that is transferred to a commercial bank. It is at the commercial bank where the salaries are paid to the ultimate beneficiaries.” she said.

Asked to comment on the payments that show emanating from RBM, Nkuna said: “To this end, RBM would not have information pertaining to payment to the ultimate beneficiaries including allowances to chiefs. This notwithstanding, Government would be the competent institution to comment on this.”

According to a source at the Accountant General (AG), payment of salaries or honoraria for chiefs and indeed civil servants, begin from the Ministry, Department or Agency. The MDA submits to the AG request for payment and the AG pushes Treasury for funding.

The source said when there is actual cash, Treasury moves the RBM to enable commercial banks pay the beneficiaries so that when the commercial banks claim their money, they find it readily available in the system.

The source said the role of the RBM is to settle payments from government to commercial banks through a platform called Automated Transfer System (ATS) which is done twice in a day.

The revelation comes at a time when RBM is also under spotlight over a K1 trillion transfer it made on June 26, 2020.

Executive Director for Centre for Social Accountability and Transparency (CSAT) Willy Kambwandira said these revelations are bruising the image of the Central Bank even further and making Malawians lose confidence in it.

But he said the developments provide an opportunity for government to cleanse the Central Bank.

“It is also clear that this has been the trend for some time. However, we believe that the revelations provide an opportunity to government to take decisive actions and reprimand officers that were involved.

“The forensic audit reports at RBM clearly provide names of people suspected to have been involved in clandestine activities, and it is our expectation that people implicated should be brought to justice.

“Our concern is that there is no action, no enforcement of the law and punishment on such revelations,” he said.

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