Malawi Pres. Joyce Banda says battered economy back on track

Malawi’s battered economy is on track and  that economic growth is on its way, President Joyce Banda has said.

Banda said the country is now able to see signs of economic recovery with the the recent appreciation of the Kwacha  against major currencies, saying it is a sign that economic policies which her government instituted on assertion to power in April 2012.

“Clearly, we are seeing an economic recovery,” she noted.

The Malawi leader, addressing reporters  Friday at Kamuzu International Airport on arrival from the Republic of South Africa where she attended the 23rd World Economic Forum for Africa,  assured Malawians that more signs of of increased buoyancy in the economy will be noted .

”Kwacha is now appreciating against the US dollar, this is not a mere achievement and it is a clear sign that Malawian economy is stabilizing” she said.

Pres. Banda: Economy on track
Pres. Banda: Economy on track

Banda’s administration adopted the Economic Recovery Plan (ERP) effectively devaluing the kwacha by at least 49 per cent against major currencies and introduced the automatic pricing mechanism (APM) for fuel much to the displeasure of many commentators who argued that the policies were likely to bite hard on poor masses.

“Let me thank all Malawians for their patience; we had to take difficult decisions and now we are reaping fruits of those decisions,” President Banda said.

She also said Malawi stands to benefit, among others, in the areas of commercial agriculture, farm input subsidy programme (FISP), and loan schemes following her attendance of the WEF.

This week Malawi Kwacha appreciated against the US dollar from K420  to trade at K380 in what economic analyst say is due to the inflows from the tobacco trade – Malawi’s main foreign exchange earner accounting for more than half of all foreign exchange earnings.

The import cover, the determinant of the country’s ability to import goods and services in a specified period, is slightly above one month now, an equivalent of $188.1 million against the internationally recommended minimum of three months [$564 million].

The central bank said Malawi’s gross official reserves improved to $206 million as at 26 April 2013, raising hopes for increased availability of foreign currency to meet the country’s strategic imports.

Such a reserve position is an equivalent of 1.10 months of import cover, according to the daily money market statistic published by the Reserve Bank of Malawi (RBM).

In the past few weeks, there has been a turnaround in most of the country’s macroeconomic indicators as indicated by the stabilisation of the local unit, an improvement in the foreign exchange reserves and easing of inflation rate which has for the first time in the past 12 months registered a drop, marginally decelerating to 36.4 percent in March from 37.9 percent in February thanks to improved food availability in most parts of the country which contributed to the fall in the food inflation basket.

And Treasury Bills (T-bills) rates have declined from an average of 43.05 percent on March 26 to 36.43 percent on April 30 moving down by a whopping 15 percent in the period.

President Joyce Banda often tells Malawians at rallies that they should be patient as her economic reforms would “pay off soon”.

President Joyce Banda leaves Cape Town after attending world economic forum on Africa 2013, seen here off by among others Malaw
President Joyce Banda leaves Cape Town after attending world economic forum on Africa 2013, seen here off by among others Malaw
Pres. Banda jets back
Pres. Banda jets back

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