Malawi holds on to new K5,000 banknote
LILONGWE - Malawi government has said it has no intention to put into circulation the new K5 000 banknote because the plans have not pleased some consumers and economic commentators, who argue that the move points to longer-term macroeconomic downturn.
Minister of Finance, Economic Planning and Development Goodall Gondwe told official Malawi News Agency (Mana) that government plans to introduce a K5 000 bank note, to reduce printing costs.
But a statement released last Thursday by Treasury said government had no plan to introduce the new bank note which had already been christen by people as ‘Namapopa’ (bloodsucker) a year after introducing a K2 000 note.
The Treasury statement said Minister of Finance Gondwe “only agreed with the supposition of a [government] reporter that the issue of K5 000 would be appropriate at this time now that the rate of inflation was in decline.”
Read the statement in part: “The general public is therefore being informed that there is no likelihood nor plans of issuing a higher bank note than the K2 000 note in the foreseeable future.”
The statement further said Malawi’s macro economy, including the Kwacha currency, is now stable and the government intends to maintain the stability.
Gondwe received a barrage of criticism on the move to introduce the K5 000 bank note.
Consumers Association of Malawi (Cama) executive director John Kapito said the introduction of the note would be an indication that the kwacha has lost value as evidenced by high cost of living. “The higher the note tells you how stinking our economy is becoming. This is something authorities need to be careful about because it can also trigger inflation and this is something they need to do wisely.
“We have seen countries where high notes were introduced such as Zimbabwe and the repercussions they have had. There are a lot of areas we could have managed the current situation, but not introduction of new note,” Kapito said as quoted in The Nation newspaper.
Catholic University dean of social sciences Gilbert Kachamba also said quashed Gondwe for disclosing about the new bank note, saying “there is no justification to introduce a higher currency denomination.”