Minister of Finance Dr. Ken Lipenga says government is putting in place policies to ensure that the appreciation of the kwacha is sustainable.
Speaking in reaction to Leader of opposition John Tembo response to the state of the nation address, Lipenga said the country has to deal with structural problems in the economy.
“The cycle of the Malawi indicate that the season where there is always food shortages (November till next harvest) food prices especially maize are high and so is inflation. The government is trying to weaken this season that’s why the President is speaking so passionately about the second crop.
“If many farmers as possible grow a second crop, we will have abundant maize during this period and inflation will be affected positively because what drives inflation in this country is mostly the price of food (maize),” he said.
Lipenga said the dependence of the economy on two crops (Maize and tobacco) has made its seasonal resulting in tough times during before harvest season.
He added that since Malawi is largely an importing country, government introduced the Economic Recovery Plan (ERP) to address balance of payments.
“The ERP is intended at enabling Malawi recover in the long term by addressing balance of payment challenges because the bottom line of our economic challenges is failure to export as much as we should.
“When a country is importing more than it is exporting, it is reflected in the weakness in the currency. We have been importing more than we were exporting but we did not allow that to be reflected in the value of our currency by pegging it at a particular level,” Lipenga said.
The finance minister said previously, there had not been any relationship between the value of the currency and the state of the economy hence the economy moved from the official to the black market.
In his address to parliament, the leader of opposition John Tembo said figures given by government and monetary authorities indicated that the kwacha was doing good but said the situation on the ground was different.
Tembo asked government on how it will ensure that the gains made by kwacha are sustainable and how the gains will mean to the economics of the general public.
He said: “While we commend our government for the achievement, our apprehension is to see how these Capital Hill figures tickle down to the ordinary Malawians in the villages and our cities.” —Malawi News AgencyFollow and Subscribe Nyasa TV :