October 26, 2021

Export Development Fund Operation Without Licence shocks Nankhumwa

Leader of Opposition in Parliament, Hon. Kondwani Nankhumwa MP says he has learnt with shock that Export Development Fund [EDF], a registered incorporated financial services company, has been operating without a licence for nine [9] years. Nankhumwa said this has come to light during a Public Accounts Committee [PAC] of Parliament hearing held with senior officials from the Reserve Bank of Malawi [RBM] on Wednesday, 1st September, 2021 and has since called upon the PAC of Parliament to immediately investigate this matter for operating as a financial institution without licence from the Reserve Bank of Malawi for 9 years. He said under the Financial Services Act, and other relevant legislations no company can conduct financial services business in Malawi unless Reserve Bank of Malawi [RBM] has given that company a licence to operate as a financial institution.

Nankhumwa questions RBM’s unquestionable integrity on EDF – PAC of parliamentary should investigate

In a statement of expressing his shock dated 2nd September, 2021, Hon. Nankhumwa said it is suspicious that RBM which is the financial services regulatory body allowed EDF to operate for close to a decade without a licence saying RBM holds 100 percent shares in EDF. Nankhumwa said one wonders whether this was a deliberate attempt to flout the law for whatever reasons or that it was pure negligence on the part of RBM Board of Directors and top management saying the RBM is supposed to have unquestionable integrity as a regulator in this business…’’I wish to call upon the Financial Intelligence Authority [FIA] and other relevant agencies to investigate this matter to establish what may have caused this apparent disrespect for the law,’’…said Nankhumwa.

Reserve Bank of Malawi: Regulator without questionable integrity

He said he has received information pertaining to alleged irregular and unprocedural appointment of the current Export Development Fund Chief Executive Officer [CEO], Mr. Gerald Nsomba saying according to the gathered information, the CEO position was advertised in the local press in February, 2017 but no interviews were conducted and no-one was employed. Nankhumwa said it is alleged that the current EDF CEO was employed in 2020 without following the laid down procedures of RBM Group and its subsidiary, Export Development Fund which demand a merit-based competitive selection process. Further to that, Nankhumwa pointed out that there are reports that the said CEO does not possess the prerequisite qualifications for the job contrary to the RBM Group Human Resource Policy, which prescribes a relevant Master’s Degree and at least 10 years’ experience as Head of Department.

By Vincent Gunde

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