Malawi economy is not functioning –Chilumpha
Malawi’s former vice president Dr Cassim Chilumpha, who once served as finance minister, says the decision by government to print new money and introduce a 1,000 banknotes is a “symptom of the fact that things are getting expensive in Malawi.”
Chilumpha said Malawi’s economy is now ailing and needs a quick therapy
“This is an indication that Malawi is an expensive country,” said Chilumpha.
“It’s an indication that the economy is not functioning,” he said on Daybreak Malawi programme aired on Capital FM.
He also said Malawi is grappling with high inflation rate due to “the non-avalability of fuel at regural basis.”
Chilumpha further pointed out that “ taxes are raising the cost of living.”
Malawi is highly taxing its people to finance the Zero-Deficit Budget. The final plan was adopted after the donor community closed their aid taps due to governance and human rights concerns.
Chilumpha however appealed to government to get to terms with the donors so that they can inject dollars in the economy.
“We have to make sure foreign exchange is avaible. The government has got to re-engage the donors, IMF and World Bank,”
But President Mutharika is on record to have told some donors to ‘go to hell.’
He has also rejected to meet the World Bank team that visited the country with an economic bail out offer and challenged that he will not just accept their programme but would “study it and find out if this programme is answering our problems.”
He said in remarks aired on state broadcaster MBC: “I want to make this clear, I will be cooperating with them but let us cooperate not on a wise person and an idiot (basis). No. We are all wise people.”
On the other hand, the central bank governor, Perks Ligoya, played down assertions that the introduction of a complete new series of bank notes and coins will trigger inflation.
“We in central banking know what causes the inflation. What causes the inflation is not the value of the currency, itIt is the total money in circulation that affects level of prices,” he said.
Ligoya said Reserve Bank reguraly “mop excessive liquidity in circulation.”
He added: “No-one should have that fear that by introducing K1,000 note prices will go up.”
Menawhile, Nation Statistic Office says the consumer inflation has accelerated to 10.3 percent year-on-year in January from 9.8 percent in December, mostly due to rising food prices.
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