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NBM asks Malawi not to reverse economic reforms

National Bank of Malawi (NBM) has asked Malawi Government not to reverse the economic reforms, saying they see light at the end of the tunnel.

NBM chief executive officer George Partridge said this at a press briefing he addressed at the bank’s head office in Blantyre on Friday.

Some of the reforms government introduced early this year to fix the country’s economic challenges include the devaluation and flotation of the kwacha, re-introduction of the automatic pricing mechanism (APM) on fuel and higher interest rates.

Partridge said government needs to develop thick skin so as not to reverse the reforms despite an outcry from people.

“Things first get worse before they get better. We know that the currency will over-depreciate, and so will the interest rates and inflation, but there will be tipping points. So, looking at 2013, we would like authorities to persevere and not reverse the reforms,” he said.

He said the bank has performed well, especially in the second half of the year as there were a lot of challenges in the first half.

He attributed the bank’s good performance in 2012 to the economic reforms, saying they brought confidence in business partners both locally and internationally.

 “Although painful, the monetary reforms brought in confidence. So, our fortunes as a bank and the industry as a whole have changed for the better as there was confidence here and abroad. As a bank, we did not reach our full potential in 2011 because the environment was not good.

“Our country risks worsened in the first part of 2012 because of the economic policies that we were pursuing and when country risks worsened, the risks of our corresponding banks abroad also increased and they were fearful to grant us lines of credit. That is why some of the credit, or some of the international trade that we were doing, was curtailed because we operated only on cash upfront basis,” said Partridge.

He further said with the country risks, the bank’s customers also could not establish lines of credit with their suppliers abroad as they were also supposed to import on a cash upfront basis.

Among other 2012 achievements, Patridge cited the establishment of the bank’s subsidiary NBM Capital Markets, significant improvement in small and medium enterprises (SMEs) portfolio, relocation of the bank’s service centres to better premises, expansion of outreach in terms of representation, and the official opening of the magnificent NBM Towers, among others.

The financial institution is optimistic the bank will perform very well in 2013, if government does not backtrack on its reforms.

 

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