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.

Leader of opposition Nankhumwa: All important elements were included in Sona but the devil is always in the detail
Chakwera: Malawi’s economy will see a contraction of 1.9% this year

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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Dpp and udf kutha ngati Makatani

Mukhalira kutsutsa mpaka kale. Inu tidabyala nkhadze. Muyikidwa ngati maliro a chitsiru.

Medson
Medson
9 months ago

Hahahaha amayesa boma ndi mpingo
Ayiwona nyenkhwe

ANA ACHEPA
ANA ACHEPA
9 months ago

Osanamapo apa ai,dziko pafupifupi lilonse mavuto amenewo alipo.Why kudana ndi boma latsopano inu a dpp

Pewani
Pewani
9 months ago

Kwacha kuchita kulakatika ngati mikanda.

Kharupa
9 months ago

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… Read more »

I'm That I am
9 months ago
Reply to  Kharupa

chimodzimodzi mkaka….ku kongeresi kuli afiti okhaokha

Bauleni
Bauleni
9 months ago

Ife kumastands… brace for impact Tonse government. Protests to follow December —January about to get real for this country

Cornerstone
Cornerstone
9 months ago
Reply to  Bauleni

Eeeeeeh.. Its too early Mr president plssss!!!!!

Banda
Banda
9 months ago

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.

Daniel Shaba
Daniel Shaba
9 months ago

Let’s just keep our fingers crossed. It’s early to judge Tonse alliance or Chakwera. DPP caused all these messy

Nyirenda Tobious
Nyirenda Tobious
9 months ago

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

Pewani
Pewani
9 months ago

But the size of pain was small as compared to what the depreciation of Kwacha will cause.

Zimwanda
Zimwanda
9 months ago
Reply to  Pewani

Liar. DPP and Lhomwes survive on the plight of another man’s suffering, especially northerners

Palije
Palije
9 months ago

inu ingogulani chingwe 2025 mudzikhwedza. alliance kudzakhala itatha

James mpata
James mpata
9 months ago

DPP kuba

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