Report and Accounts 2010 RBM Reserve Bank of Malawi Reserve Bank of Malawi Reserve Bank of Malawi Reserve Reserve Bank of Malawi Reserve Bank of RESERVE BANK OF MALAWI REPORT AND ACCOUNTS FOR THE YEAR ENDED 31ST DECEMBER 2010 2 Report and Accounts RBM RESERVE BANK OF MALAWI REPORT AND ACCOUNTS FOR THE YEAR ENDED 31ST DECEMBER 2010 3 Report and Accounts 2010 RBM BOARD OF DIRECTORS Dr. Perks M. Ligoya Governor & Chairman of the Board Mrs Mary C. Nkosi Deputy Governor Mrs. Betty Mahuka Mr. Gautoni Kainja Mr. Joseph Mwanamveka Board Member Board Member Board Member Dr. Patrick Kambewa 4 Board Member Mr. Ted. Sitimawina Board Member Report and Accounts RBM MISSION STATEMENT As the central Bank of the Republic of Malawi, we are committed to promoting monetary stability and soundness of the financial system. In pursuing these goals, we shall endeavour to carry out our duties professionally and exclusively in the long-term interest of the national economy. To achieve this, we shall be a team of professionals dedicated to international standards in the delivery of our services. 5 Report and Accounts 2010 RBM EXECUTIVE MANAGEMENT Dr. Perks M. Ligoya Governor Mrs. Mary C. Nkosi Deputy Governor Dr. Grant P. Kabango Acting General Manager, Economic Services 6 Report and Accounts RBM 7 Report and Accounts 2010 RBM HEADS OF DEPARTMENTS Banda, L. (Ms) Director, Banking and Payment Systems Chitsonga, D Director, Information and Communication Technology Chokhotho, R. Director, Human Resources Goneka, E. Director, Research and Statistics Kabango G.P. (Dr) Director, Special Duties Kajiyanike, M. (Ms) Director, Currency Management Malitoni, S. General Counsel and Bank Secretary Matambo, W. Director, Internal Audit Mathanga H. Director, Treasury Milner J. Director, Exchange Control and Debt Management Mkulichi, N. Director, Bank Supervision, Blantyre Branch Mlelemba E. Director, Non-Bank Supervision, Blantyre Branch Mseka, C. (Mrs) Director, Accounting and Finance Mwale M. (Dr) Acting Executive Assistant in the Governor‟s Office Mzengereza, C. Director, Strategy and Risk Management Wemba, M. (Mrs) Director, Administration 8 Report and Accounts RBM GENERAL NOTES Owing to the rounding of figures, separate items will not always sum to corresponding totals. The following symbols should be noted in the text and statistical annex tables. .. Means not available - Means nil or less than one half of the significant digit shown * Means preliminary figures + Means revised figures Copies of the Report and Accounts may be obtained without charge from: The Director of Research and Statistics, Reserve Bank of Malawi, P.O Box 30063, Capital City Lilongwe 3, Malawi. Fax: (265)-1-770593. E-mail: [email protected] Any opinion expressed in this document should be regarded as solely that of the Reserve Bank of Malawi. The Bank wishes to express its appreciation of the co-operation and assistance from the Ministry of Finance, the National Statistical Office, financial, commercial and industrial organisations in supplying data and background material. 9 Report and Accounts 2010 RBM TABLE OF CONTENTS 1.0 OPERATIONS AND PERFOMANCE OF THE RESERVE BANK OF MALAWI ............................ 14 1.1 Implementation of the Results of the Rationalisation of the 2008 Organizational Structure ............. 14 1.2 Staffing and Staff Complement.......................................................................................................... 14 1.3 Appointments ..................................................................................................................................... 14 1.4 Capacity Building ............................................................................................................................... 15 2.0 IMPLEMENTATION OF MONETARY POLICY DURING THE YEAR 2010 ..................................... 16 2.1 Introduction ........................................................................................................................................ 16 2.2 Implementation of Monetary Policy in 2010 ...................................................................................... 16 2.3 Monetary Policy Instruments ............................................................................................................. 17 2.4 Monetary Policy Assessment ............................................................................................................ 17 2.5 Challenges ......................................................................................................................................... 18 2.6 Conclusion ......................................................................................................................................... 18 3.0 DEVELOPMENTS IN THE GLOBAL ECONOMY ............................................................................. 19 3.1 International Economic Outlook......................................................................................................... 19 3.2 Economic Outlook for Industrial Countries ........................................................................................ 19 3.3 Emerging and Developing Economies .............................................................................................. 19 3.4 The Sub-Saharan Countries .............................................................................................................. 20 4.0 DEVELOPMENTS IN THE MALAWI ECONOMY ............................................................................. 21 4.1 Production and Prices ....................................................................................................................... 21 4.1.1.1 Agriculture: Tobacco .......................................................................................................................... 21 4.1.1.2 Agriculture: Tea ................................................................................................................................. 21 4.1.1.3 Agriculture: Sugar .............................................................................................................................. 22 4.1.2 Manufacturing .................................................................................................................................... 22 4.1.3 Financial and Insurance Services ..................................................................................................... 23 4.1.4 Information and Communication ....................................................................................................... 23 4.1.5 Construction....................................................................................................................................... 23 4.1.6 Mining and Quarrying ........................................................................................................................ 23 4.1.7 Domestic Consumer Inflation ............................................................................................................ 23 4.2 BALANCE OF PAYMENTS ............................................................................................................... 24 4.2.1 Exchange Rate Movements .............................................................................................................. 24 4.2.2 External Debt Situation ...................................................................................................................... 25 4.2.3 External Debt Service ........................................................................................................................ 26 4.3 PUBLIC FINANCE ............................................................................................................................. 27 4.3.1 Revenues ........................................................................................................................................... 27 4.3.2 Expenditures ...................................................................................................................................... 27 4.3.3 Financing ........................................................................................................................................... 27 4.4 MONEY AND CREDIT ...................................................................................................................... 28 4.4.1 Money and Quasi-Money .................................................................................................................. 28 4.4.2 Activities of the Commercial Banks ................................................................................................... 29 4.4.3 Activities of the Reserve Bank of Malawi .......................................................................................... 30 4.4.4 Activities of the Other Financial Institutions ....................................................................................... 31 4.4.5 Money Market .................................................................................................................................... 31 4.4.6 Domestic Debt Stock ......................................................................................................................... 32 4.4.7 Treasury Bills Yields .......................................................................................................................... 33 4.4.8 Inter-Bank Money Market .................................................................................................................