Malawi economic outlook grim, opposition leader Nankhumwa calls for strict financial discipline to avoid ‘crisis of unprecedented levels’

Leader of Opposition in Parliament Kondwani Nankhumwa has  said it is “an open secret” that Malawi economic outlook is grim and has called on President Lazarus Chakwera and his Tonse Alliance government to ensure strict financial discipline to avoid ‘crisis of unprecedented levels’.

Nankhumwa:Malawi is standing too far from the great dream of becoming a predominantly producing and exporting country than the perennial predominantly importing and consuming country.

He was speaking during the closing of the mid-term budget review meeting of Parliament in Lilongwe on Friday.

Said Nankhumwa: “Inflation is on the rise and the resultant effects can tell. Our people are day by day becoming worst off. The continued increase in the pump price for fuel has become the cancer that is eroding the disposable incomes of our people. Obviously, this is further shrinking our Per Capita income.

“To most people, life is barely survival and we are slipping miserably on the path to becoming a middle income economy. As at present, we risk remaining a permanent member of the Least Developed Countries and even cherishing being its President.”

The Leader of Opposition also pointed out that the country’s trade balance is easily telling that Malawi is standing too far from the great dream of becoming a predominantly producing and exporting country than the perennial predominantly importing and consuming country.

“From the end of 2019, the trade balance has worsened from US$352.8 million to US$566.7 million. Gross Official Reserves are even giving us no hope, sharply contracting from US$846.6 million to US$574.3 million over the same period.

“The Malawi Kwacha is also steadily losing value, depreciating by 5 percent from July to December 2020 after almost a five year period of stabilisation,” he said.

Nankhumwa said the negative trade balance is expected to persist as the country will continue to import more due to Covid-19 and export less due to contraction of economic activities in the country.

“This shall result in a widened balance of payments, which will fuel further depletion of gross foreign reserves and depreciation of the Kwacha,” he pointed out.

Nankhumwa said the high growth rates that the Chakwera government is projecting are “exaggerating” domestic revenues, especially taxes, which  he said may not be realized as companies may not produce any substantial taxable output.

“This may result in our domestic revenues getting off track as was the case in the first half of the financial year,” he said.

Nankhumwa advised   the government to maintain strict financial discipline and fiscal prudence under the current grim economic outlook to avoid an economic crisis of unprecedented levels.

“Indeed, the government must ensure strong fiscal management to avert financial resource leakages as well as maintaining public domestic debt levels that are sustainable to avoid public debt distress,” he said.

The Leader of Opposition further said that it saddens every Malawian to note that the government has significantly overspent within six months and has borrowed almost 600 billion Kwacha domestically bringing the total public domestic debt to a whooping 4.5 trillion Kwacha.

“What could the Tonse Alliance government have been thinking? Where was all this money channelled to, and yet civil servants such as teachers are being denied Covid 19 risk allowances? The nation is waiting with abated breathe to know the leakages where the money has spilled into,” he said.

Nankhumwa said he is fully aware that apart from claiming millions of lives globally, the Covid 19 pandemic has also destabilized local, regional and global economies, citing the IMF that  gross domestic product (GDP) for Sub-Saharan Africa has contracted by negative 3.2%.

“However, it is also during hard times like these that leaders rise to the occasion and demonstrate leadership agility. The country’s leadership should instil confidence among Malawians that it can manage a crisis and save the lives of its people.,” said Nankhumwa.

He then commended the Presidential Task Force on Covid-19 for its efforts to ensure that there is coordination and soberness in how Covid-19 funds are utilized.

The Leader of Opposition also applauded the government for its decision to audit all transactions taken by all clusters that are using Covid -19 funds.

“However, Malawians are eagerly awaiting a report on how the initial COVID-19 funds were utilized,” he said.

Nankhumwa, nonetheless, commended the government for listening to opposition  counsel to introduce Covid -9 cash transfers, which go a long way in cushioning the effects of poverty, especially among the ultra-poor.

“The DPP government, under former President His Excellency Professor Arthur Peter Mutharika, successfully implemented this programme. However, the way the Covid 19 cash transfers have been implemented this time has left a lot of gaps, especially at targeting.

“My understanding is that the programme is meant to help the poorest of our society survive the economic effects of the pandemic. But what we have seen is that even those that are economically well-off have also benefited from the Covid 19 cash transfer programme,” he pointed out.

He called on the government to rectify the “anomaly” so that the programme benefits the most vulnerable people, particularly the elderly, people with disabilities and persons living with albinism.

Nankhumwa further said this will also bode well with the Tonse Alliance government’s pledge that once voted into power, it would pay the elderly money for their upkeep.

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Banda
Banda
1 month ago

Malawi will never be an exporting country unless they find new items to export. The Western World is demanding good quality Medical Marijuana (Chamba). In addition Phamaceutical companies are in need of opiolds both agricultural products that can generate vast amounts of Forex. Mexico recently leagised Chamba to supply the USA market who legalised Chamba in many States 10 years ago. Canada, European countries are looking for suppliers. Malawi needs to think outside the Box as they cannot produce enough tobbaco, cotton,, ground nuts, tea, sugar to ever become a wealthy Nation. You wait sit on your hands other countries… Read more »

The Khumalos are racketeering
The Khumalos are racketeering
1 month ago
Reply to  Banda

Chamba chanu mukulimira kuti amwene?

Banda
Banda
1 month ago

No money in growing food products especially maize, reason why agriculture is heavily subsidized by Government World ove.

Wakwiya ndi kadeti
1 month ago

Omvera uyu ndi bulutu naye. Awa nthawi yawo inatha ndipo sadzabwereranso m’boma. Just look at the number of stories with a bad picture of dpp. Everyday there is a dpp scandal about theft starting with Muthalika today. DPP refused to appoint people from Ntcheu to Chitipa to senior position and APM was directly involved in the bad dealings.

The Khumalos are racketeering
The Khumalos are racketeering
1 month ago

Your type, who are obsessed and misguide by hatred to the point of rejecting objective reason are the ones that are guarding the steel ropes anchoring the country to the bottom of the world. It’s in the mind, it gets conceived in the mind

Jah
Jah
1 month ago

Baba this is good advice moyo wachinyau basi. Zikuonekelatu kuti wr on autopilot pano no one fixing the economy

nafundo zalo
nafundo zalo
1 month ago

kodi ijayo ya bingu kha mumkati Hray cani cani ya the elderly inatha bwa? joji malemya pena pake you are a joke. munadya ndalama zimene zija pano mukuti Tonse alliance itani?. mumaenda mmidzi kuwaphikila anthu mipunga and cipiloni blanket ndikumati mwathandiza nkhalamba.
stop posing.
dzana umacita cibwibwi ndi envelope ya ndalama siumadziwa kocokela umatelo. sad soul and LIAR

Mangochi Kabwafu
Mangochi Kabwafu
1 month ago

Strict financial discipline chaninso apa, as if you know anything. Unkaleka kulangiza agogo ako ali ku Mangochiwo.
Naye fat boy.

Last edited 1 month ago by Mangochi Kabwafu
nafundo zalo
nafundo zalo
1 month ago

nanuso matukutuku ndalama mumapatsana zija ku dpp munaononga dziko agalu acabecabe inu. dpp simudzabweraso anyapapi. gulitsani magal8moto njinga anakaziunhika ku mangoci zija. ziola muona .mbwiyanuyo sanati. so corruptive .ncifukwa anathawa umphawi ogona mu studio flat ku SOUTH BEND ku US. galu wacabecabe .
MUZAZISAZA.DIKILANI MUONR

Lester
Lester
1 month ago

the 5% loss Nankhumwa is talking about is in the banks. Black market is much more than that and thriving. Paziboliboli is back in business

Kaluli The True Patriot
Kaluli The True Patriot
1 month ago

That is greed of the highest order that is causing corruption and abuse of finances of the highest order. That mentality where everyone wants to be extremely rich without working hard for it. Just by having super allowances and perks are out of this world which do not match with the level of our economic development.

Kaluli The True Patriot
Kaluli The True Patriot
1 month ago

What about the Covid-19 allowances you claimed? Can you pay them back please. Even as an opposition leader you do not have to claim allowances for fuel when you already have a VX Prado with fuel privileges as leader of opposition. That is double dipping you do not have justification for claiming that allowance. You went into the taskforce as leader of opposition in parliament. Shame on you Kondwani George Malemia Nankhumwa.

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