The Reserve Bank of Malawi (RBM) is yet to start reviewing the Exchange Control Act, 1989, which governs administration of foreign exchange in the country, as directed by President Peter Mutharika.
The Malawi leader indicated when he officially opened the RBM building in Mzuzu on May 25 that the legislation was too old and had to be reviewed as a way of controlling illegal foreign exchange externalisation in the country.
He said illegal forex externalisation was draining the country’s foreign exchange reserves hence the need for RBM to tighten all the loopholes if the country was to develop.
Mutharika said the country was losing more money in illegal foreign exchange externalisation than the aid the country requires.
“We need to secure what we already have but we cannot progress with an Exchange Control Act that is older than our democracy,” said Mutharika.
RBM spokesperson Mbane Ngwira, however, said the bank has from 2012 embarked on foreign exchange liberalisation process which is an ongoing process with the current Exchange Control Act in place to improve service delivery in the foreign exchange market.
Ngwira said the issue of illegal foreign exchange externalisation is dealt with by relevant laws and authorities.
“The issue of illegal foreign exchange externalisation and other monetary offences are dealt with by relevant authorities and laws such as the Anti-Money Laundering Act,” he said
Ngwira, however, noted that the review of the Act may set the pace for the foreign exchange liberalisation process.
“The Exchange Control Act is not a hindrance to the liberalisation process but a means of controlling or guiding transactions in the external sector,” he said.