Malawians should brace for rough ride – Economists

Economic analysts have warned that Malawians should brace for hard times in fending for basic goods and services because government’s failure to meet International Monetary Fund (IMF) targets and that most Malawians will not afford to purchase basic items by December 2015.

Prof. Ben Kalua: Tough times ahead for Malawians

Prof. Ben Kalua: Tough times ahead for Malawians

IMF has suspended loans to Malawi for failing to cut its wage bill and improve revenue collection, making it less likely Western donors will resume budgetary aid.

According to published reports, the University of Malawi’s economics professor Ben Kaluwa feels the current economic situation, as assessed by the IMF, will culminate into worsening donors’ confidence and further frustrate both foreign and local investors as there is a gloomy economic outlook.

Budget assistance from Western donors worth millions of dollars has been withheld for two years now —amid concerns of Cashgate, the plunder of public funds at Capital Hill— . Such aid has historically accounted for about 40 percent of the national budget.

The IMF said the loan facility would remain suspended until Malawi’s government met certain targets.

Kalua, who is based at Chancellor College in Zomba, feared that the situation will likely lead to rising lending rates in banks hence denying businesses the much-needed capital to expand their business ventures.

“Malawi has well-trained economists, but government has not allowed them to do their professional work. On varied reasons, government has tended to disregard the advice of economists; and this is the major challenge and stumbling to the growth of our economy,” Kalua is quoted by The Nation newspaper.

Kalua argued that government overspending has essentially piled up inflationary pressure on the market.

He projected that come December “most poor Malawians would not afford to buy even a packet of sugar if the economic situation remains as it is.”

Centre for Social Concern (CfSC) economic governance expert Mathias Kafunda told the paper that the urban population, which largely depends on commercial goods and services, will be severely affected in the short to medium-term.

“If inflation continues to increase at an increasing rate, then the situation will negatively impact on the pockets of the urban poor whose income remain static,” he said.

Inflation—the rate at which prices of goods and services change— is at 22.2 percent.

Prices of basic goods such as cooking oil, sugar and maize, among others, have jumped up to the sky in recent months mainly on account of a weakening of the local currency beginning end June this year as importers and traders are passing on the high cost of importing to consumers.

Minister of Finance, Economic Planning and Development Goodall Gondwe also admits that the economy is currently in “a critical point”.

He has bassured the IMF on Wednesday that government is geared to improve business environment and the macroeconomic situation in general.

Gondwe said he is “ absolutely confident “that at the end Malawi will end up with a robust and positive growth.

The IMF said on Wednesday that Malawi’s economic growth would slow to 3 percent this year from 5 percent in 2014, reflecting a decline in the maize harvest and weak private- sector investment and consumption.

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Pete Nyandoro
Guest

We were told by this old man that come December Malawians will clap hands. is this what he meant?

wosauka
Guest

Malawians are still in abject poverty.The so called economic growth is mere rhetoric.Those at the hem continue plandering resources at the expence of the poor.

ngulenjet
Guest

Kkkkkkkk what a fool of a person is kuchanco what wrong has kalua said? Bingu is a failure and those that voted for him and those that helped him steal the elections plus kenyata are all to blame for all this suffering Kuba anayamba ndiwo mu 2009

learnedmi
Guest

MALAWI ECONOMY WILL NOT IMPROVE BECAUSE WE DELIBERATELY IGNORE THE AREAS CONSUMING OUR SCARCE RESOURCES. IF WE ARE COMPLAINING ABOUT 115 DELEGATES WHY ARE NOT COMPLAINING ABOUT THE NUMBER OF MEMBERS OF PARLIAMENT? WAGE BILL IS WHAT IS CONSUMING ALL OUR TAXES. CIVIL SERVANTS ALWAYS DEMANDING A RAISE BACKED BY POLITICIANS. ALL FROM OUR TAXES.THEY ARE NOT CONTRIBUTING ANYTHING TO THE ECONOMY. THE FIGURES ARE THERE FOR ALL TO SEE BUT WE DELIBERATELY TURN A BLIND EYE.MARK MY WORDS “THE NEXT SITTING OF PARLIAMENT, MPS WILL RAISE THEIR PERKS”

Sailota
Guest

I have no reason whatsoever to feel sorry of Malawians. Nzofuna izi. Munya!!!!!! Simunati. Mudya chimanga cha pa nsalu chaka chake ndi chino.

cbk
Guest

dadaboma is right,people voted by tribe.they didn’t want also female president.

MSANA WA PETURO
Guest

I think some of you people are so stupid and can’t jst get facts. The professor has clearly stated that gvt does not take economists’ advice. What do you expect them to do after this when your stupid gvt and president can’t listen? Rubbish!!!

Mpumulo aw Bata
Guest

Wake me when it’s time to “clap hands “for this good for nothing administration. …….. Whenever that is..

Zachisone
Guest

Kodi Joice Banda wabwela? Abweze ndalama ameneyo. Peter bvutoli walipeza. Ndipo akuyesetsa kuti zinthu ziyende. Ndipo ziyenda. Inunomwe mukumunyoza mudzachita manyazi. KODI AKALUAWO AMADWALA THENDA YA MASO. KAPENA BOOZE ALLERGY. kKKKKKKKKKKKKK

akupha
Guest

University lectures and professors need to cut their salaries and benefits as well. Yes they are supposed to do research and advise Gov way forward. But what do they do. DRINKING basi. Tamuwonani maso ali psyuuuu. Kuchita kudziwika kuti thonjani wamupweteka. That is why students at Chancellor college are always drunk. Following the leaders (Lectures and professors). ADVISE GOV WHAT TO DO NEXT. Prof. in Economics. Za ziiii. . Tchito kunyenga ana a school basi for grades.

wpDiscuz

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