IMF, Malawi style

Exchanging my “International Money Funds” in Malawi is an amusing, and frustrating, experience. In Malawi, there are a few generally accepted ways to exchange money.

1) The government artificially holds the official exchange rate at 150 Kwatcha to the dollar – this is what you get at the banks, using your USA ATM, or if you use your credit card. This helps the Malawi government charge us more for everything and save themselves some cash. This is generally enforced by Malawians.

2) The “real” exchange rate on the international market is closer to 170 Kwatcha to the dollar – this is what you get at the Foreign Exchange Offices in Malawi, a semi-legal, heavily reinforced, kiosk-like service of some of the foreign-owned banks. This is also generally provided by Malawians.

3) The black market rate for cash is around 180 Kwatcha to the dollar – this (I hear from others) is what you get when you bring your dollars (only $50 or $100 notes) behind the local grocery store and deal with swarms of men offering you mostly real, but sometimes fake, piles of Kwatcha that they keep in their car trunks or man bags. Usually, people do not get arrested here, but there is an occasional crack-down on foreigners engaging in this activity (which usually ends in some quick transfer of said $50 or $100 to the police versus the black market traders). This service is provided by Nigerians.

4) Some local folks, whose names are quietly passed from expat to expat, will actually take a foreign exchange check and give you a reasonable exchange rate (175 Kwatcha) while they send your check into their account in a land far far away. You meet, you exchange small talk, they take your check, hand you a grocery bag of cash, and they send your check to London in their courier service. This is provided by Indians.

I, of course, would only use the legal option 1.

That said, whatever way you use is a royal pain. Malawi is almost exclusively a cash-oriented economy. The largest bill denomination here is 500 Kwatcha ($3.33 – $2.77). This makes carrying enough money safely, or stuffing enough money in your pants without looking overly bulky, quite difficult. On average, in Kwatcha, to fill a gas tank takes about 10,000; dinner out for 2 is 5,000; grocery bills are about 5,000; housekeeper gets 10,000; gardener gets 12,000; electric bill is 15,000; 2 fire extinguishers about 16,000. I think that I need a larger purse.

Luckily, through a personal reference, I get VIP service at my South African-owned bank. This makes me feel better when I am carrying a load of 300,000.00 kwatcha cash for deposit. I walk in, walk right upstairs to the special service section, and get immediate service from the very helpful bank staff. I also have the world’s largest personal checkbook and an ATM card that only Jon seems able to use (a distinct disadvantage for several reasons). And, they now let Jon cash my personal checks. Is that another “helpful” attribute of my account status?