RBM challenges private sector to enhance production
Reserve Bank of Malawi (RBM) on Tuesday challenged the private sector in the country to increase production and address the prevailing supply side pressure affecting macroeconomic situation.
RBM Governor Dr McDonald Mafuta Mwale was speaking in Blantyre during this year’s investment symposium that had some companies pitching investment projects to prospective financiers.
Speaking during the symposium, Mwale said the central bank decided to organise the symposium as a step towards supply side interventions aimed to compliment its traditional demand side policy control.
“The main issue for this meeting is that, let us face it, as a country, right now, we have a lot of problems stemming from high inflation rate, which is coming because we are not able to produce enough for our own country’s consumption. And we have problems of foreign exchange in Malawi, because we are not able to export and fetch any foreign exchange. You can see all these problems. To me, they need to be addressed, because as Malawi, we need to produce for our own self,” he said.
The Governor said the meeting was so important to chart a clear direction towards achieving economic independence.
He said “When you look at our exports and imports since long time, even before the year of 2000 Malawi, has never produced and exported enough to cover the amount that we want to import. Normally, importation is higher in dollar terms than exportation. So if we want to make sure that this gap, is filled , this deficit, is reduced by encouraging private sector encouraging financial sector banks, to come in open and identify projects that can really produce for us and export ,”
To increase production and exports in Malawi, the key strategies discussed include introduction of import substitution projects that reduce forex draining while at the same time develop export-oriented projects.
According to the Governor , there is need to creating backward linkage opportunities where large corporations contract local workers to produce raw materials and this is possible through megafarms.
“There is need to supporting projects that can add value to local production while at the same time we establish a dedicated team to monitor and engage with banks, financial institutions, and the private sector.
For Malawi to uncrease production, the Governor saidthere is need to utilize Development Finance Institutions (DFIs) and provide longer-term, subsidized lending for strategic projects.
“The overall goal is to boost domestic production capacity, reduce reliance on imports, and create opportunities for value-added exports that can help stabilize the country’s economic challenges,” he said..
During the symposium, various economic pundits spoke in support of the call. Some of the speakers who include President of Bankers Association of Malawi (Bam) President Phillip Mandibga., Secretary to the Treasury Betchani Tcheleni and many more other speakers.
In his remarks Madinga requested the RBM to translate all the related and important documents into Chichewa so that people who cannot understand English can be able to get the message.
Madinga said Banks pledge to support ATMM strategy through stimulation of small and medium enterprises (SMEs).
“Mr Governor as BAM we are asking you to work over achieving macro economic stability through entering into dialogue to resolve public debt,” he said.
