Reserve Bank of Malawi explains K432 million payment to chiefs
The Reserve Bank of Malawi has attributed its payout of K432 million in chiefs’ honoraria to the Accountant General’s Department.
Last week, Malawi News reported on the payments as seen on transfer records emanating from the Central Bank.
In a response, RBM said in a statement that it is the Accountant General that instructed the transfer of K432 million to bank accounts of various chiefs across the country in December last year.
The payments were to cover the months of November 2020 as the salaries for the month were processed and submitted late.
The Central Bank has said this after the Ministry of Local Government feigned ignorance on the origin of the payment instruction.
In the statement, titled ‘RBM Report on payment of honorarium to chiefs for December 2021’, RBM says it acted under the instruction of the Accountant General to pay commercial banks who eventually paid the chiefs.
The Central Bank received funding instructions totalling K37.18 billion in December 2020 from the Accountant General’s Department for processing. The amount included the K432 million payment for chiefs.
“The bank received funding instructions totalling K37, 189, 824, 093.58 from the Accountant General’s department for processing. From the K37 billion that was transferred to ATS [Auto Transfer System], Accountant General uploaded files amounting to K432, 615, 789.00 in respect of chiefs’ honorarium.
“This is the amount that was eventually transferred to individual accounts at commercial bank for those chiefs that have bank accounts,” reads the statement.
It further says district councils are responsible for preparation and payment of salaries to chiefs and respective civil servants.
According to the records RBM has provided, it made the K37 billion transfer to cater for 54 councils across the country.
“The Reserve Bank acts on instructions from the Ministry of Finance especially the Accountant General’s office. Payment of chief’s honorarium follows the same procedure as that of salaries for all civil servants and the Bank’s role is confined to that of a banker i.e. receive instructions from Government and facilitate payment of the same into beneficiary accounts,” says RBM in the statement, signed by spokesperson, Ralph Tseka.
It further explains that government, through local councils, originates the list of chiefs to be paid honorarium.
“On the other hand, Accountant General issues instructions on how the funds should be moved from one account to another therefore all transactions that were processed by the Bank were based on clear instructions,” reads the statement.
When asked to explain the payments last week, spokesperson for the Ministry of Local Government, Anjoya Mwanza, pushed it to RBM, saying it was better placed to explain.
She said chiefs’ payments are decentralised and are paid by each district council.
“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,” Mwanza said.