Despite the high cost of living encapsulated by soaring inflation, still the country’s economy is slowly gaining foothold and by year-end things would have improved, an economist has observed.
John Kamanga, head of operations at Malawi Stock Exchange (MSE) told local radio Capital FM’s Day-break Malawi program that the past three months have seen an influx of companies registering on the stock market, an indication he said is reflecting that President Mrs. Joyce Banda’s economic reforms are beginning to bear fruits.
“All I can say is that since the new administration came into office Malawi Stock Exchange has seen an increase in companies registering on stock market. That is an encouraging development because it shows investors have confidence in the country’s economic reforms being initiated,” said Kamanga.
On decision by the Malawi government through its central bank to devalue the kwacha by a 49 percent margin, Kamanga observed that such decision has influenced the influx of foreign portfolio investors who hugely gained on dollar term index.
“In terms of kwacha term index as a country we have lost by at least 11 percent while foreign investors have reaped on devaluation because the lost value is in the legion of 33 percent hence they are coming in large numbers to register on stock exchange,” added Kamanga.
Meanwhile, the economist further contended that the country’s economy is slowly heaving some sigh of relief due to availability of foreign currency in the commercial banks.
He said, previously, Malawi economy came under heavy pressure due to what he dubbed ‘imbalances’ that were there in terms of imports and exports as there was no forex available to oil the process.
“To certain extent it is worth mentioning that devaluation has freed elements of availability of forex, this is good for business as companies are in better position now to import and export goods. This activity is capable of accelerating economic growth because companies will be looking for more human resource than laying them off,” he further observed.
Malawi reached its lowest point during the final days of late president Bingu wa Mutharika as a result of donor pull out that heavily impacted on the country’s economy.
For the first time in history, Malawians had to line up in long queues in order to access basic commodities like bread, sugar and fuel.
But soon after a dramatic transition that saw president Banda taking charge of government affairs after Mutharika’s demise, things begun to improve following restoration of relations with key donor partners.Follow and Subscribe Nyasa TV :