JB says Malawi economy recovers, on path to growth

Malawi President Joyce Banda has said that the country’s economy which she found stuttering when she took over power last year from DPP regime is finally on the mend and now registering growth and gave out  figures to back her.

Banda was speaking in Mangochi when she opened a three day annual conference for the Economics Association of Malawi (ECAMA) on Thursday.

She reminded the economists that  when she came into power, Malawi was in a state of an economic downturn.

“Among other problems: bilateral and multilateral relationships soured; fuel was difficult to find. There was shortage of foreign exchange which led to disruption in trade and investment and some companies closed down or downsized. These adverse developments affected all of us: from the well-to-do in town to the masses in the rural areas,” she said.

President Mrs.Joyce Banda speaking when she opened the conference

President Mrs.Joyce Banda speaking when she opened the conference

Banda said the bold economic reforms which her administration embarked on, albeit painful, have been and still remain necessary.

“As we stand today, we can all bear witness that the reforms are bearing fruit. The Kwacha has gained strength on the foreign exchange market,” she said.

President Banda noted that  monthly inflation rates have started declining from 37.9 per cent in February 2013 to about 25.2 per cent in July this year.

“ Inflation is projected to decline further to 16 per cent by December 2013.”

She also pointed out that interest rates are going down as well and are projected to drop to 17 percent by end of this year.

“Production capacity for industry has also increased from 30 per cent to 75 per cent in the past one year,” she said.
President Banda said the implementation of her brave reforms has ensured that fuel is readily available and foreign exchange reserves continued to improve from 1.5 months in April 2013 to about 2.4 months as of 23rd August 2013.

The increase in import cover has been due to steady donor inflows, tobacco earnings and good monetary policies, she said.

President Banda  told the conference that  in the past financial year, her government has also been able to lay a strong foundation for economic recovery and sustainable growth.

“ Our Social Security Programs have now in-built activities to wean out those who can progress to income-generating programs. Many of our citizens have benefited from these programs.

“My Government has also initiated a number of projects that are intended to change the structure of our economy and create a conducive environment for growth. In the coming year, challenges in the energy sector will have significantly been resolved. In infrastructure, projects to revitalize the railway lines, airports and key roads are underway.”

In tourism,  President Banda disclosed that government is finalizing the electronic visa system, implementing the open sky policy and aggressively building our technical and infrastructural capacity to assert our position as “the warm heart of Africa”.

In mining, she said both legal and policy reforms are underway; a national air borne survey will be launched shortly and will enable us to quantify the country’s  mineral resources.

“We will then be able to put our mineral resources on the national asset register. This exercise will enable us as a country to structure these assets to support the transformation agenda that enriches and empowers Malawians at all levels,” she said.

In Agriculture, Banda said government has  embarked on diversification both within and out of agriculture.

“We are focused on mobilizing our youth and women into cooperatives and farming clubs to become the engine of our agricultural expansion. My Government has decided to commercialise the growing of maize to boost both food security and exports.

“ To overcome dependence on rain fed agriculture, my Government has supported a two crop a year program with expanded irrigation. We have also reinforced animal farming,” she informed.

President Banda confidently said “ the economy has almost recovered and is on the path to growth. “

According to the Malawi leader, in 2013, Growth is expected to reach about 5 percent, against 1.8 percent in 2012.

She said her agenda now is to ensure continued stability so that Malawi  achieve sustainable economic growth.

President Banda, who faces election next year, has won acclaim in the West for austerity measures and gestures to bolster the economy of the impoverished country.

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