Malawi economy not ticking all the boxes -Ecama: Magalasi upbeat on revival

Radical changes are needed to revive Malawi’s economy, which is in bad shape and requires a fresh approach, Economics Association of Malawi (Ecama) has said.

Kachaje: Malawi economy in bad shape

Kachaje: Malawi economy in bad shape

Magalasi: Reforms key to economic revival

Magalasi: Reforms key to economic revival

The group’s president Henry Kachaje said it clear in the light high inflation rate at 23 percent as of August 2015, according to National Statistical Office (NSO), high interest rates in commercial banks, hovering around 37 percent as well as a downgraded gross domestic product (GDP) growth rate of three percent this year from an earlier projection of 5.5 percent, that economy is not ticking.

Unemployment levels continue to rise including for university graduates.

An the International Monetary Fund (IMF) mission to Malawi has since declared the country’s three-year Extended Credit Facility (ECF) off-track due to fiscal slippages equivalent to about two percent of GDP, which emerged during the second half of 2014/15 financial year, in part because of overspending on the wage bill.

Kachaje said there need for quick “fix “solutions so that the economy gets back on track.

He said IMF is only giving “statistical evidence” on Malawi’s ailing economy but the people are feeling the pinch.

Ecama president said the government must intervene and come up with policies that ensure a change of direction and policy realignment so that policies the country is developing and pursuing are aligned to long-term development vision.

He said the country need to be prioritising “critical areas.”

President Peter Mutharika’s chief economic adviser Collins Magalasi, who participated in the debate organised by Ecama in Blantyre, admitted that Malawi is in dire economic situation.

“We do not have to wait to be told that our economy is not in good shape, but our duty as government is to keep improving and that is what we are trying to do,” Magalasi said.

Magalasi said most of the economic challenges the country is facing today were inherited by the previous People’s Party administration.

He said Mutharika government has prioritised the public sector reforms “so that we become efficient and effective.”

Magalasi said the reforms are key to economic revival.

Meanwhile, the Malawi kwacha is on a steady appreciation path and was trading at around K549.9343 against the dollar by Tuesday on the foreign exchange market, according to the Reserve Bank of Malawi (RBM).

This is a gain from a low of K565 to a dollar a few weeks back.

Foreign exchange market dealers have attributed the recent appreciation to, among others, declining demand for foreign currency and lower buying power among foreign exchange buyers or businesses.

The local unit has continued to appreciate against the greenback and South African rand, but is depreciating against the British pound and euro.

“I think there have been times when we see some temporal movement of the local currency against the major currencies, but what we must ask ourselves are questions as to why it is gaining, is it because we have produced more as a country?

“Is there something we can attribute to that kind of currency stability? If we cannot pinpoint to something like that, then we must get back to the drawing board and fix,” commented Kachaje in the local press.

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Attati Mpakati
Guest
Magalasi, as expected, is yet again economical with the truth. Being an economist does not necessarily imply you have to apply the same precepts into explanations. To say the currecnt economic challenges were caused by PP is to say the least, insulting the intelligence of Malawians. You know, at least those who were awake, that it was your thug, Bingu who plunged this country into an economic tailspin. It took a less learned Joyce Banda ( when you compare her to the boasting of the Mutharikas that they are educated) to turn the country back on track. Yes, we have… Read more »
Phiya
Guest

Bingu adathawitsa ma donors onse ndipo zinthu zidafika pamwana wakanaphala.amayi adazibwezela kenanso aziononga,pabwela APM akonzenso osati kupitiliza kuwononga,tikukuonani,muyesa tizavota potengela region?

Niaphaphi
Guest

Vuto ndi asilikali aku Malawi mmalo mothamangitsa ntchona wa America ‘yu ali busy kukwela mahule ku Chigwili. This is a rotten country. They say we r peace loving bt ash we r very sleepy no wonder politicians feed us garbage.

Few good men
Guest

Mutharikas cant make good leaders.

Clement
Guest

It’s Joyce spoiled our economy and it doesn’t need explanations. Mr H Kachaje, that’s the way we talk to another if we want someone to pay attention not chakwera and other failed politicians are doing. We want those who called themselves economists to come forward with solution to fix our economy. There is no need to be silent like you are watching Arsenal Manchester Utd game then put blame to the govt.

njala chithambo
Guest

I feel we have old and very dull economist how could a country full of water from Songwe to Nsanje be food insufficient, which University did the so called president of Ecama, Presidential Adviser did go.

I feel Malawi is not poor but our readers make poors decisions especially when it comes to resource allocation. please hire for free advice

Yankho
Guest

Collins I remember you used to stand by the poor and that time you sided with the poor. You groomed Mabvuto to be one of the ren owed advocate , that time you were working with MEJN. But look now you are both foolish and vwry stupid, mwina chimene chatsala ndi kumangokwera mahule ndi kuvina ndi mahule you have completely forgotten that at one time you sided with the poor. Mulungu akukuonani

segerege
Guest

Do we people remember how our economy was before JB took over from Bingu? a malawi tisamalankhule ngati ana. pamene bingu amamwalira dziko lino zonse zofunikira zitasowa muno. mdzimayi anathamanga thamanga nkudzibwezeretsa. a ndale omwe ali mu cash gate ambiri mwaiwo anali a DPP. Atangotisiya Bingu onse anathawira kwa JB kuti akapitilize ntchito zawo zonyansa. JB anawamanga.
Iwe Magalasi nena zoona. DPP inaononga dziko nthawi ya bingu nkubwera JB kudzakonza nkubweranso. DPP kudzapitiliza kuononga.

Kingsley Jika
Guest
A few days ago I heard this Magalasi man on MBC TV explaining gvt efforts to turn things around. For me, he’s one those few guys who know to speak in a language we all can follow. Honestly, we’re at a point where we must call reason to duty, take politics out of it all & discuss with open mind what role each one of must play to heal this land. He talked about this year’s floods & how that they struck where it pained most. On the other hand, Kachaje has been instrumental in calling each one to understand… Read more »
chakhalira
Guest
I understand Magalasi is the Chief Economic Adviser wa APM and he is also in the band wagon of blaming the PP government Cash gate. What sense and solution will this give to Malawians? If the Economists has nothing to advise APM on the way forward, why not say it to the President that he has no idea as to how solve these problem? Tililabe za Cash Gate ya PP mpaka liti? Mumatengeranji udindo oti si muutha? In any case I thought we were hearing of MK12Billion ya PP Cash Gate and we also hear of MK577 Billion ya DPP.… Read more »
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