Forex squeeze forces Malawi's Mutharika to skip AU Summit

Blantyre, Malawi (PANA) - Malawi 's acute depletion of foreign exchange (forex) reserves has forced the immediate-past chairman of the African Union (AU), President Bingu wa Mutharika, to skip the on-going AU summit in Malabo, Equatorial Guinean.

The summit opened Thursday.

Presidential Affairs deputy minister Nicholas Dausi confirmed that Mutharika had missed the summit but refused to discuss the reasons.

"Yes, His Excellency Ngwazi Prof. Bingu wa Mutharika is not attending the AU summit but ask the Information minister or the Foreign Affairs minister for the reasons," he said.

Both Information Minister Symon Vuwa Kaunda and Foreign Affairs Minister Prof. Etta Banda did not answer their phones but sources at the ministries of Finance and Foreign Affairs confirmed that Mutharika, heavily criticised by his globe-trotting, was forced to skip the summit was lack of forex.

"Plans were on for the president to fly to Malabo but we just could not raise enough forex," said a source at the treasury. "It's pathetic."

Another source at the Foreign Affairs ministry said there was no Malawi delegation at the summit because the advance party that went to Malabo was asked to come back home.

The source said Malawi is being represented by the Malawi ambassador to the AU, Isaac Munlo.

Mutharika, who has the penchant for travels, is heavily criticised for travelling with a huge entourage that includes government and ruling United Democratic Progressive Party (DPP) officials, chiefs, religious leaders and other guests.

Some people are put on the presidential entourage purely as a 'thank you' for being loyal to him and his party.

Malawi is currently experiencing an acute forex squeeze following the disastrous performance of the southern African country's chief forex earner, tobacco, and the souring of relations with major Western donors.

Tobacco, whose industry has over 80 per cent of Malawians depending on it either directly or indirectly, contributes to up to 75 per cent of all forex in Malawi . But of late tobacco is increasingly suffering from a growing anti-smoking lobby.

It is projected that this year receipts from tobacco will drop to around US$ 300 million from US$ 450 million last year.

Ironically, US$ 300 million  is Malawi’s annual budget for petroleum products alone but the country has to import other essentials like fertilisers and medical drugs.

The Mutharika administration has also been at loggerheads with most of the donor community culminating into the expulsion of British High Commissioner to Malawi Fegus Cochrane-Dyet.

Cochrane-Dyet was declared persona non grata following the leakage of a scathing diplomatic cable to British Foreign Secretary William Hague in which he described the 77-year-old economist-turned-politician as "increasingly becoming autocratic and intolerant of criticism".

London reacted by not only expelling Malawi's Charge d'Affairs to Great Britain, Flossie Gomile-Chidyaonga, but also suspending all development aid to Malawi.

Several other bi-lateral donors and multi-lateral donors like the Germany, Norway and the United States and the International Monetary Fund (IMF), the European Union (EU) and World Bank have also expressed concerns on governance and human rights issues and have since scaled down their aid pledges to Malawi.
-0- PANA RT/VAO 1July2011

01 july 2011 17:41:35




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