To many Malawians, the year 2023 was tough as it was riddled by Cyclone Freddy, shortage of forex and the 44 percent devaluation of the Kwacha. Journalist TAONGA SABOLA caught up with Finance Minister Simplex Chithyola Banda to discuss 2023 and what lies ahead in 2024.
The year 2023 has come to an end. How can you describe it?
The year 2023 was a mixed bag in the sense that from the beginning to mid of the year Malawi’s economy was characterised by many shocks. We faced one of the worst shocks in recent years on Tropical Cyclone Freddy which hit the country in March. In addition, there were external influences from the wars in Europe and other countries.
It was also a year that Malawi’s debts reached unsustainable levels and that many Malawians were living in hopeless situations.
But towards the end of the year the hopeful situation emerged. Malawi qualified for the International Monetary Fund (IMF)’s Extended Credit Facility (ECF) and then this was followed by resumption of the Direct Budget Support by our development partners.
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Therefore, the resumption of the direct budget support was a significant economic indicator of their confidence in the leadership of President Lazarus MacCathy Chakwera’s led government and the economic reform initiatives my ministry has put in place.
Towards the end of last year, we saw authorities devaluing the Kwacha by 44 percent. Has this helped the local unit to realise its true value?
The World Economic Outlook report has indicated that we have managed to narrow the gap to around 5 percent between official and parallel policy rate. This means that the realignment of the Malawi Kwacha helped address the gap.
What measures has the government put in place to cushion Malawians from the effects of the devaluation?
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Realising the possible adverse and unintended effects of the re-alignment on some sections of the population, the government has already negotiated with development partners such as the World Bank and Multi Donor Trust Fund for adjustments to Social Cash Transfer Programmes in order to cushion the poor against the effects of the alignment.
In recent times you have been talking of the RDP Strategy. Please unpack it for us?
We are moving towards economic recovery and my ministry is exploring new economic initiatives that will help us grow and develop our economy. In our Recover, Develop and Protect (RDP) Strategy, we have lined up a number of activities starting from Carbon Trading where we can generate and sell carbon credits, Diaspora Engagement where we can incentivise initiatives that will help members of the diaspora community to invest back home, Golden Visa Programme where Malawi can open up to other nationals to become Golden Visa holders and invest in this country, Cannabis Biomass Projects where locals can participate in the growing of the local varieties, mining discounted projects where we can do proper and thorough analysis of our minerals and monetise them to improve our GDP and Labour Export just as people have witnessed the Israel labour export programme.
We have four other countries who are interested in getting labour from Malawi.All the above will help us grow own economy and malawi will not be the same again.All these will help us address the 4Fs that have been affecting us.I am happy that we are already solving the Forex issue and Fuel and working towards solving the remaining Food and Fertiliser issues. I want to assure Malawians that with initiatives put in place achieving the MIP-1 of the MW2063 is optimistically achievable and I have hope that we are gonna fast track its implementation.
Talking of economic recovery, what role do the ordinary citizens have to ensure that the economy recovers?
I call upon Malawians that time has come for them to fully participate in the development of this economy. It doesn’t matter where they stand in society but we are all Malawians and we need to collectively play a role in ensuring that our economy grows.
I will be conducting budget consultations for a week before we meet and present the same in Parliament later in February. I want people to give us their observations and feedbacks so that the budget we develop is pro Malawians and that it serves the interests of the general public
I am a Malawian who has faith and belief that developing this country is possible. We simply need to have the spirit of patriotism and be visionary to realise the Malawi we all need.
Any last words?
I would like to finish with a message of hope. Malawi’s economy is going to rebound very soon. I simply need to be given the benefit of doubt and the possibility of producing economic wonders is very eminent.
