Malawi government is “determined” to steer the country out of a group of poorest countries in the world within the medium term, Minister of Finance, Economic Planning and Development Goodall Gondwe has said .
Gondwe said in Parliament on Friday when he presented a mid-term budget statement.
He attached weight to The International Monetary Fund (IMF) statement last Wednesday that they expect the economy to grow between 3 and 5 percent in 2018 and by as much as 7 percent in the medium term as the country recovers from drought-induced stagnation.
The international lender said in a statement at the end of a country mission that included meetings to discuss the extension of a multi-million dollar loan that: “Growth will be supported by enhanced infrastructure investment and social services as well as an improved business environment.”
Gondwe said IMF statement should inspire confidence that the economy is being managed as well as it should.
”They state that in the medium term (3 to 5 years), growth rates could be high in Malawi. This is the Government’s goal. We are determined to emerge out of a group of poorest countries in the world within the medium term. Yes, Sir, we can and will,” said Gondwe.
However, the country is struggling with debt and there are also fears over growth prospects following combined effects of persistent power blackouts, dry spells and armyworms attack that could shutter growth prospects.
The current drought is estimated to cut maize production by 40 percent or 210 740 tonnes while fall armyworms would cut output by 10 percent or 73 201 tons.
The country’s budget has also been affected by a domestic revenue shortfall of around K38 billion owing to the gross underperformance of the Malawi Revenue Authority (MRA
Gondwe, nonetheless, remains confident, saying with a number of economic measures that will eliminate power outages, tax collection will be normalized in the second half of 2017/18 and yield roughly K70 billion more than was collected in the first half of the year.
It is also expected that Malawi will receive a budget support of K60.0 billion from the World Bank in the course of the second half of the year.
”In the event therefore, for the whole 2017/18 total revenue plus grants would be K1,130.3 billion which is a little higher (2.6 billion) than originally budgeted at K1,127.7 billion,” he said.