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.
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.