Forex shortage hits Malawi, Kwacha depreciating: Opposition says Chakwera fails to outline measures to keep economy ticking
The local currency, the kwacha, is weakening against all major convertibles and foreign exchange reserves are depleting according to, Reserve Bank of Malawi (RBM) figures with Leader of Opposition in Parliament Kondwani Nankhumwa accusing President Lazarus Chakwera for failing to adequately address measures to spark the economy.
Nankhumwa was responding to Chakwera’s maiden State of the Nation Address (Sona) delivered in the House on Friday.
He said Chakwera’s Sona failed to boldly define a comprehensive road-map, let alone timelines of how his electoral promises would be implemented.
Instead, Nankhumwa pointed out that President Chakwera chose to hide behind “less definable Hi-5 agenda, such as prospering together and subtly throwing the responsibility of ending poverty in this country back to Malawians.”
The opposition leader said he is disappointed that foreign reserves are “fast dwindling” under the Malawi Congress Party (MCP) government than it was under the previous DPP regime.
“Forex is scarce; the Kwacha is depreciating and many Malawians are failing to buy goods and services due to a weaker Kwacha.
Malawi experiences significant seasonal volatility in its foreign exchange inflows, with earnings from the key tobacco export crop concentrated during a period between March to August.
Nankhumwa said President Chakwera in his SONA, did not adequately address this matter, “especially on what measures his administration would put in place to keep the economy ticking.”
But Chakwera in his address said Malawi’s economy will contract 1.9% this year because of instability caused by a presidential election re-run and the Covid-19 pandemic.
Chakwera said public debt had risen to 4.1 trillion Malawi kwacha ($5.53 billion), or 59% of gross domestic product.
He repeated promises to crack down on corruption, saying it was holding back economic growth.
“The success of Malawi’s economy going forward, … we will not tolerate corruption nor will we interfere in the affairs of institutions fighting corruption, we will observe the rule of law in order to provide predictability of the political and economic environment,” he said.
In the agriculture sector — a lifeline in Malawi’s economy — Chakwera announced the start of an “affordable inputs program,” in which 4.3 million smallholder farmers will receive subsidized seeds and fertilizers.
He said this will improve tremendously the level of productivity in the sector, which currently contributes 30 percent of the country’s Gross Domestic Product.
Meanwhile, Nankhumwa has asked the Chakwera administration to seriously consider reducing cooperate tax the private sector pays to government.
“Due to Covid-19 the private sector is failing to register profits and end up firing employees or put them on half pay. This development has led to accumulative figure of about 400,000 already dismissed from the time Malawi registered its first Covid 19 case in April this year.
“Statistics further indicates that, if this left unchecked, the private sector, shall lay off about a million workers by December this year,” he said.
The opposition leader wondered how the government will fund the huge wish-list that President Chakwera has produced in his SONA without borrowing domestically as well as internationally.
“This is mindful of the fact that domestic borrowing is inflationary and could be a disincentive to investment, which the government needs to create jobs and spur social and economic development.
“This is where fiscal discipline meets political rhetoric and it is not always a pleasant atmosphere,” he said.
Nankhumwa said although he knows it is difficult for MCP to acknowledge, the DPP government successes under former president Peter Mutharika recorded some landmark progress in institutional, social, political and infrastructural developments that the new government can use as a springboard for economic success.
Chakwera unseated Mutharika in a June 23 re-run election after the 2019 polls were overturned by a court, citing irregularities.
Eyes now are on Chakwera’s first full national budget which the finance minister Felix Mlusu is expected to deliver during the current sitting of parliament.
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Mukhalira kutsutsa mpaka kale. Inu tidabyala nkhadze. Muyikidwa ngati maliro a chitsiru.
Hahahaha amayesa boma ndi mpingo
Ayiwona nyenkhwe
Osanamapo apa ai,dziko pafupifupi lilonse mavuto amenewo alipo.Why kudana ndi boma latsopano inu a dpp
Kwacha kuchita kulakatika ngati mikanda.
Kodi Chakwera amatudzuliranji maso akamalankhula? Koma simfiti ameneyu?
He is indeed hiding behind the less definitive Hi5 agenda which has no measurable performance criteria or indicators. Nanga how can you measure ” prospering together” and hold abusa accountable? Ife we want 1 million jobs in 1 year, universal fertilizer subsidy, K15000 stipend to grannies, K14000 passport, non renewable driving license, free electricity and water connections, duty free week, K100,000 tax free on salary, K50000 minimum wage, medical scheme for civil servants, promotions for civil servants, soft loans for civil servants, bullet trains between Lilongwe and Blantyre, kudya katatu, houses for police, army, prison and immigration etc etc. Ife Hi5 sitidya. And please remind Chakwera that this is not Assemblies of God church where you can preach lies and stupid church patrons will still not ask you questions. This is Malawi and we expect nothing but substance from Chakwera as he continues chewing our taxes.
chimodzimodzi mkaka….ku kongeresi kuli afiti okhaokha
Ife kumastands… brace for impact Tonse government. Protests to follow December —January about to get real for this country
Eeeeeeh.. Its too early Mr president plssss!!!!!
Government has opened Lilongwe Airport to international aeroplanes but immigration has not removed the restriction on foreigners obtaining Entry Visa’s how do you expect tourists to come with Forex. Kwacha will continue to depreciate and jobs will be lost until Government re-opens borders to foreigners.
Let’s just keep our fingers crossed. It’s early to judge Tonse alliance or Chakwera. DPP caused all these messy
Just remind him where necessary but don’t talk of DPP back to power again soon, they caused pain to Malawians that even up to 2060, shall still be in our memories
But the size of pain was small as compared to what the depreciation of Kwacha will cause.
Liar. DPP and Lhomwes survive on the plight of another man’s suffering, especially northerners
inu ingogulani chingwe 2025 mudzikhwedza. alliance kudzakhala itatha
DPP kuba
The economy is bad. Yes. The economy has been bad each time a new regines assumes power but we have always recovered. This time the economy is wordt chifukwa chokuba APM and his stooges. Do not blame Tonse Alliance. A DPP munanyanya kuba.
The economy is suffering as a result of DPPs reckless and unpatriotic act of importing coronavirus cases from abroad to stop the court sanctioned election not to mention the looting……but make no mistake evil lomwes, God is always on the side of the righteous and Malawi’s economy will bounce back big time , watch this space.
First it’s about type of finance minister, an insurance guy, try one with economics, accountancy or mba
They all study Lipsey so don’t worry too much President Chisokonezo
izi ndizofunika Koutsoyiannis osati Lipsey yekha
kwacha kulakatika kuti lakataaaa
You do not explain your headline. If the Kwacha is depreciating then please tell us the last months rate versus the present rate.
the government needs to adjust the rate. There’s no forex apart from the black market. Anyamata apaziboliboli asangalale
NoExcuse.Peter managed the economy amid very dificult situations.civil servants paid through out, fuel everywhere,forein carency in abandance so many positive things moved.
What about TEACHERS?
Can you give us the number of months when teachers were not paid?
When we kicked out DPP, black market was MK780/$1 was available, Bank pegged at MK745/$1 was available.
MCP Govt 3 Months below:
Now bank is MK780 / $1 No dollar Available
Now Black market MK895 / $1 No dollar available. Rand at 48, scarce.
Prices of Goods rising Fuel going up on Sept 19th.
SONA was supposed to address these things, But we got Housing for MPs.
Unemployment which was already too high getting worse with covid, social unrest is inevitable.
Speeches cannot run an economy, businesses do, reduce taxes now, reduce Gvt spending on useless things, kick start construction projects, roads, schools, hospitals, housing, etc, to have money start circulating and boost the economy, and get businesses to start employing.
Madef loans make people poorer than ey were be4, use that money as tax incentives for small business to grow n create employment.
One of the successes of DPP was to steal money like it is nobody’s business. What can one learn from stealing?
Seems they were stealing money they themselves made. Governments must make money……
Where there is a will, there is a way. This too shall overcome..
Would Nankhumwa to tell us which economy has been spared by the COVID-19? Malawi is not alone to be hit by the pandemic. Most economies have contracted. The Rand has lost value and so other currencies. Chakwera has not even announced his first budget. My advice to Nankhumwa Is keep quiet. You are desperate to score points and have become a baking dog.
Yes munyetse
Olimbana ndi a mwenye awona chani? Nyekhwe..just like idi amin
Izinso ndiye pano ai
All those things that Nankhumwa is saying, why didnt the DPP government do them. But now it is time for hypocrisy to roam the avenues of Opposition. Have you forgotten your phone conversation with Grezelder Jeffrey about your plans to steal from the Ministry of Agriculture? I will remind you that you had five years to do all these things that you accuse Chakwera today?
Chakwera & Chilima are not being accused. They are just being reminded politely that there was Forex Reserve to cover a period of 6 months which apparently has dwindled to unprecedented levels, whose explanation is required. We shouldn’t have short memories please. We were told by the Vice in his campaign trails that there was a lot of money in government coffers. To day the question is: why can’t he go and get the finances he was bragging about? Instead of spinning more funds from what the previous government left, they are busy sharing from the meagre reserves they found and mention that that has come about due to the second elections and Covid 19. Didn’t Ansah and Mwanamveka warn them that they were running short of funds and Chilima emphasized that whatever was there belonged to government? He wrongly thought his ploy to steal an election was not going to materialise but God did it the other way round and now the task to resuscitate the economy lies in his lap; that is the kind of God we genuine Christians serve. If DPP failed then the alliance couldn’t find anything in the coffers. These guys have been busy locking up people (which of course is commendable as long as it is established that they have cases to answer) instead of running the government. Why can’t they get the frozen accounts money and boost the scarce forex? Bottom-line is they are proving not worth the salt, period.
The depreciation of the Kwacha and forex shortage has just began with Rinse government.They need to put their ducks in a row to get this sorted or else by December indeed there will lot of layoffs.
Stop talking about yesterday. The past is for us to learn from, the future is for us to determine and the present is for us to live. Let’s deal with the issues we have at hand. As to who caused them we are all aware of that but that will not solve the problems.