Mutharika upbeat about solving Malawi problems, admits economic turmoil

President Peter Mutharika’s state of national address on Monday night presented Malawians strong assurances of what his  government intends to do in providing short and long-term solutions to the country’s problems, highliting  a number of public investment programmes.

President Peter Mutharika : Upbeat

President Peter Mutharika : Upbeat

In his national address monitored on taxpayer funded Malawi Broadcasting Corporation (MBC).  Mutharika admitted the nose-diving performance of the country’s economy.

“Following the poor climatic conditions that have had a devastating effect on the production of both food and cash crops, the economic gains achieved up to the early part of 2015 have been reversed,” Mutharika said.

According to him, the real GDP growth of 6.2 percent recorded in 2014 declined to 3.2 percent in 2015, and is projected to decline further to 2.8 percent in 2016.

“Similarly, the stabilizing trend in the exchange rate and the interest rate was reversed,” pointed out the Malawi leader.

But Mutharika was quick to mention that the country was still maintaining high foreign reserves. He said the country has the “highest reserves in history” since independence.

Donor Confidence

Mutharika said there is increased confidence in macro economic management on the part of donors and that Malawi was “on track” on the Extended Credit Facility arrangement with the International Monetary Fund.

“I am pleased to report that there is increased confidence in the country’s macroeconomic management. Given the improvement in the fiscal performance, which is evident from the fact that we are on track on the Extended Credit Facility arrangement with the International Monetary Fund, it is expected that better weather conditions during the coming growing season will help to establish a robust macroeconomic situation, as well as the resumption of high growth,” he noted.

The President hoped for better weather conditions in the country’s forthcoming agricultural season for economy boost.

Malawi’s economy is at the verge of collapsing following the depreciation of the kwacha and inflation currently at 22 per cent.

Life is becoming punitively expensive for average Malawians including civil servants who are staging sit-ins and strikes for increased pay.

Currently, Mzuzu University (Mzuni) is indefinitely closed since government has failed to honour a 35 per cent salary increment for staff.

Over 4 000 students are affected.

Optimistic

Mutharika also talked about  Food Security,Water, Energy, Education, Land Reforms, Public Sector Reforms and the Fight Against Corruption.

The President said he is optimistic that despite natural setbacks on the growth of the economy, the resilience shown by Malawians is good enough to turn the tide in no time.

Malawi has for the past two years faced poor climatic conditions that have had a devastating effect on the production of both food and cash crops, thereby reversing any economic gains achieved up to the early part of 2015.

“Government, in collaboration with its partners is in the process of sourcing relief food for all food insecure people. In our medium to long term measures, we are breaking the cycle of food insecurity using the National Resilience Strategy which Government has developed. This plan outlines strategies that will be implemented to break the vicious cycle of food insecurity for the next 5 years,”

According to our records, the country has about 300,000MT of cereals earmarked for humanitarian support, which is enough to cover the affected communities until March 2017. The country’s Strategic Grain Reserve (SGR) has been restocked with about 113,000 Metric tonnes of maize.

He also touched on infrastructure development, a sector he said has seen construction of a good road network across the country, school blocks and hostels, power generation stations, health facilities and water systems among others.

The President’s address brought timely reassurances to Malawians at a time when global economic trends are creating a ripple effect towards small economies.

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