Goodall tells Bloomberg ‘Malawi economy understated by 40%’

Malawi  Finance Minister Goodall Gondwe has said the country’s economy may be understated by as much as 40 percent .

Gondwe told Bloomberg TV Africa in Washington on Oct. 11 that “the methodology that we are using to calculate gross domestic product has got to be looked .”

The 78 –year-old former World Bank official said: “I’m sure that once we review that, we’ll have a higher figure.”

Malawi’s economy is worth $3.71 billion, according to World Bank estimates.

The southern African nation’s economy will probably expand an average of 7.5 percent annually over the next five years, Gondwe said.

The International Monetary Fund is estimating growth of 5 percent to 6 percent this year.

“We are now about 6 percent, even with the problems that we have now,”  Gondwe said. “We think that once we have ironed out and normalized the problems here, we should be able to come up to about 7.5% or more.”

The IMF and other donors froze aid to Malawi last year in the wake of reports that almost a third of state funds were being lost through corruption. Malawi relies on donor funds to finance about 40 percent of its budget.

While Malawi’s dependence on foreign aid has eased, the country needs to restore fiscal discipline to lure donors and investors, Gondwe said.

“We need a lot of money,” he said. “Probably we need close to about $100 million or so, but more importantly we need a considerable amount of money for development projects in the country.”

Gondwe, who was finance minister between 2004 and 2009, was appointed to his current position in June after Peter Mutharika was elected president in a contested election.

Follow and Subscribe Nyasa TV :