Malawi at critical transition, on recovery path—JB

President Joyce Banda has said Malawi is presently at a critical political, social and economic transition, recalling that when she took over the office of State President on April 7, 2012, there was poor political and economic governance and that the economy of the country was on the verge of collapse.

“Shortage of fuel and foreign exchange were the order of the day. There was acute shortage of drugs in hospitals; manufacturing capacity of many industries went down; many businesses scaled or closed down thereby shedding off a lot of jobs,” said President Banda on Friday when she officially opened the National Dialogue on Economy at Nkopola Lodge in the resort district of Mangochi.

The Head of State said for example, Unilever sent most of its staff on leave due to some of these challenges.

President Banda

“I would like to underscore that these challenges inevitably eroded the gains that the country had achieved over the past years. Therefore, my government prioritized to reverse this trend as a matter of urgency. In this regard, Government has put in place tangible measures to address these challenges in the immediate, medium and long term,” said the President.

She said so far, the main goals of her administration have been to launch an economic recovery plan, which has included the devaluation of the Malawi Kwacha; normalization of bilateral relations with Malawi’s cooperating and development partners; and repealing of punitive laws “that have retarded political and social economic development of our country”.

“Although I promised Malawians that our efforts will start bearing fruit after a year, I am pleased to report that, with God’s grace some of these measures have already started yielding the desired results. The traditional relationship between the United Kingdom and Malawi has been restored. Closer home, we have renewed our relationships with our neighbours including Mozambique.

“On 19th June, 2012, the International Monetary Fund (IMF) wrote a Letter of Comfort to our development and cooperating partners requesting them to start disbursing resources that were withheld because of the suspension of the programme.

“Furthermore, Distinguished Ladies and Gentlemen, on 22nd June, 2012, the Millennium Challenge Corporation (MCC) Board approved the Malawi Compact programme that was suspended due to the country’s poor governance record. These, undeniably, demonstrate the trust and confidence that our development and cooperating partners have in my Government.” President Banda said.

She said one of the most important lessons is that most governments are ready and willing to support her government’s efforts to improve the country’s situation.

Banda observed that there is an overwhelming interest by private and public companies to come and invest in Malawi and that there is such a rich community of Malawian diaspora in Africa, Europe and the United States of America that are keen and willing to support the development efforts of their Government.

“The Malawian Diaspora could provide a significant source of foreign exchange, transfer of skills, technology and capital. Their networks abroad could be very strategic for our growth agenda.

“I am pleased to report that Parliament on Wednesday, 27th June, 2012, approved the 2012/2013 national budget to allow government business to proceed. With all this, I wish to express my sincere appreciation to our development and cooperating partners for the support that they have so far rendered to us.

“I also wish to thank the people of Malawi for their understanding and giving my government a chance to institute tough but necessary measures that are aimed at turning around the economy for the benefit of our country,” President Banda said.

“The question I ask myself is how do we quickly garner this goodwill into a force of growth in my country? I then realize that the first objective we confront in this regard is that we must ourselves take the responsibility to answer the question: how do we achieve our objectives?

“Allow me to proceed to say that our vision is very clear: to eradicate poverty through economic growth and wealth creation. To realize this, we have set for ourselves a value system of integrity, honesty, tolerance, selflessness and stewardship whilst embracing three cornerstones of Unity, Equity and Development.

“As a Government, we desire to see Malawians enjoy their freedom, dignity and sense of pride; and maximize their capacity to realize their social, political and economic empowerment,” said the President.

President Banda said her government has thus developed strategies to realize this vision, which include the establishment of an Economic Recovery Programme to deal with current challenges of political and economic governance by creating sustainable and progressive monetary and fiscal policies to stabilize the economy; introducing austerity measures to cut on waste and promote prudent fiscal management programme; developing a fresh, more diversified and productive economic model which will re-instate traditional drivers of growth that can generate foreign exchange.

She said Government has decided to promote a private sector-led economic growth with the following priority through the diversification of commercial agriculture with irrigation programmes, tourism, mining, energy and infrastructure development including ICT, rail, roads and airline.

The dialogue ends on Sunday.

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