Malawi economy hopeless – Economic professor

Malawi’s economic expert Professor Ben Kalua of the University of Malawi has described the country’s economy as hopeless and helpless, saying the tobacco high rejection rate and low prices and low prices for tea and sugar are not helping matters.

Prof Ben Kalua: Economy hopeless

Prof Ben Kalua: Economy hopeless

Kalua was reacting to reports by President Peter Mutharika and Finance Minister Goodall Gondwe that the economy, which is shrinking steadily for the past three years, would pick up in June.

“The country’s economy is worrisome. The kwacha continues to depreciate against the dollar at an alarming rate when the tobacco market is on. The situation is helpless and hopeless,” he said.

He said it was unlikely that the economy would pick up by November this year taking into account the current economic fundamentals, especially in the absence of donor support.

“The absence of the budgetary support, the high rate of tobacco rejection rate, the low tobacco prices make it impossible for the economy to pick up. The economy was supposed to pick up during this tobacco selling season but this will not be the case this year,” said the professor of economics at Chancellor College.

He said sugar, which is the second forex earner in Malawi, is performing poorly so too tea which was supposed to earn Malawi a reasonable foreign exchange.

“This is not good for Malawi. We were supposed to strategise on the exit of our traditional donors long time ago but we waited until they had gone for us to start thinking on how we can stand on our own,” said Kalua.

Both Leader of Opposition in parliament Lazarus Chakwera and Peoples Party acting president Uladi Mussa were  pessimistic that the economy would bounce back any time soon as illustrated by Mutharika.

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5 thoughts on “Malawi economy hopeless – Economic professor”

  1. Smickey says:

    Professor of economics the problem on the ground is very clear even to an ordinary Malawian…. Well as an expert in the field WHAT are the SOLUTIONS??? We need economic solutions that can be achieved at a household, community and country level…..

  2. John says:

    Someone asked WHAT SHOLD BE DONE?

    THE ONLY HOPE FOR MALAWI IS COLONIZATION AGAIN FOR 100 YEARS!…

  3. Chandamale says:

    Ask that question your professor of doom Peter he should tell us what to do now.

  4. chingambwe says:

    then what should be done, prof?

    1. Dengulanga says:

      The Fiscal policies being run by the Malawi government are not in tandem with the existing Monetary policy framework.Secondly, the fiscal policies are supposed to use the systems, processes and laws that are anchored into a PFM framework and environment that is both dysfunctional and lacks controls. How good the fiscal and monetary policies may be, if operated and implemented within a dysfunctional PFM framework and environment, this country will not go ahead. The only way they can go is down south and faster than the population of Malawi will see.This is common sense which we do in Chanco in Economics 202.It is not rocket science for any sane people to see this.

      The operators of our PFM systems should all be put in Prison and bring new ones whose task should be to clean up so that we can move ahead. The present PFM systems are too porous and the same porosity is abated by lack of political will to plug them and use institutions appropriately meant to curtail this existing wastage and obvious lack of prudence.Secondly, the Public Investment Management that government works on allows every Jim and Jack to formulate a project that does not pass a simple appraisal test. This is why we even borrow for toilets and consumption for most of the times. Corruption is just endemic and needs to be rooted out.First, it must start by removing the Police from our roads that are supposed to be custodian of the law and yet practice corruption open and unabatedly.Second, the allowance culture in government must be killed yesterday. A government that does not have a robust source of resources should also desist from subsidizing silly programs like FISP rather than subsidize medication.

      Government ought to promote self reliance and hard work. This should be supplemented by firm control over whom we allow into the country as investors. Most of the people we allow are basically looters and traders. Why should Chinese and Indians be allowed to trade and take out so much foreign exchange?

      If one goes to Chileka or KIA, the Chinese and Indians are allowed into restricted areas and pass through customs without paying duty. They are treated by our very own police like they are VVIP and yet when I bring a bottle of cooking oil from South Africa, as a national, I am asked to pay duty. The incentives are reversed.

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