Former economic planning minister Ralph Jooma has said radical changes are needed to revive Malawi’s economy, which is in bad shape and requires a fresh approach.
The Mangochi-Monkebay parliamentarian for People’s Party (PP) told parliament that his party has “serious reservations” with the assumptions that are underpinning the 2015/16 national budget currently under debate in the House.
“We are told that the economy is projected to grow by 7 per cent and inflation will decline to 16.4 per cent and interest rates will also decline. We wonder what positives government is foreseeing that we and Malawians in general are not seeing,” said Jooma.
Jooma said that all indications show “a precarious situation on the ground.”
He noted that this year, Malawi has not produced enough grain and consequently, therefore, staple food prices will skyrocket.
“Inflation in Malawi is directly correlated with food prices. Secondly, although it is being highly proclaimed that we have a lot of foreign reserves now, the reflection on the ground is not the same, and the exchange rate is somewhere between K460 and K480 to US$1.
“So basically, Mr Speaker, Sir, we think that inflation will not be as low. Exchange rate will not be as stable. Interest rates will remain high and industry capacity utilization will subdue and therefore hamper economic growth because the economy will not be able to produce the projected goods and services. This is the reality,” said Jooma.
Meanwhile, Minister of Finance and Economic Planning Development Goodall Gondwe concede that the country is going through turbulent times.
Speaking during a breakfast meeting organised by the Association of Early Childhood Development in Malawi (AECDM) to lobby for more funds towards early childhood development, last Wednesday, Gondwe said the economy is in “bad” shape.
An economic observer told Nyasa Times that although DPP had “rigged the May20, 2014 election, it will not be able to rig the economy”.
He observed that the majority of the country’s leadership was more interested in political expediency rather than pragmatic bread and butter issues.
To restore Malawi’s position on a positive economic growth path, he suggested an investment is needed which calls first for investor confidence and security.Follow and Subscribe Nyasa TV :