By Taonga Sabola
President Lazarus Chakwera yesterday wore a brave face and admitted that the economy is bleeding from four wounds which are slowly suffocating the economy.
He said the local economy was bleeding from the wounds of structural limitations, gross imbalance between imports and exports, the Covid pandemic and government waste.
Chakwera’s admission came at a time Malawians have been taking to the streets of major cities over the past five weeks demanding solutions to economic hardships they are facing, including a sharp rise in consumer prices.
The Malawi leader has since unveiled a K500 billion two-year Socio- Economic Recovery Plan (Serp) aimed at stimulating strategic parts of the economy to ensure that Malawi stays the course as regards the Malawi 2063 First 10-year Implementation Plan.
He said, to address the problem of the trade deficit and its knock-on effect on inflation, the SERP has interventions to maintain the policy rate at 12 percent, with upcoming reviews to consider further reductions as macroeconomic fundamentals allow.
“It also includes interventions to support private sector players plying their trade in productive sectors with great export potential, including commercial farming, manufacturing, mining and tourism.
“I must, therefore, appeal to Malawians in business to take advantage of these opportunities for support by venturing more into cross-border trade with countries like South Africa, Zambia, Zimbabwe, Angola, South Sudan, Ivory Coast and Botswana,” Chakwera said.
He observed that, in these countries, trade enquiries for Malawi’s maize, sugar, soya, ground nuts, beans and rice had exceeded $300 million dollars.
“The market is bountiful but the traders are few. We, therefore, need more Malawians entering the arena of cross-border trade to benefit from the stimulus interventions we will channel towards export promotion,” Chakwera said.
To heal the wound of government waste, Chakwera said the SERP would include digitalising service delivery of governance, health, education, procurements and payments to stop wastage of resources.
He has since ordered all ministries to review their plans for local and international travel during the 2021-23 recovery period, as well as their plans for the procurement of new vehicles during that same period.
Chakwera said while he has not added a single car to his convoy, but continues to use cars inherited from former president Peter Mutharika, and scaling down on his travel plans, he expects every ministry under his administration to do the same.
“Similarly, through the office of the Attorney General, working with independent law enforcement agencies, my administration will not tolerate any of your taxes to be wasted on frivolous claims against the government by businesses whose main trade is inflating prices and extorting the State.
“I know that, during the previous administration, it had become fashionable to sue the government in the hopes of getting a big payout, but this culture has only impoverished our country as a whole,” Chakwera said.
Centre for Research and Consultancy Director Milward Tobias yesterday described the unveiling of the SERP as commendable as it would put all actors in perspective.
Tobias said the plan had covered areas that are labour intensive.
“They can, therefore, stimulate the economy quickly,” he said.
He said there were a number of construction projects listed as well as measures meant to stimulate businesses, small and medium enterprises on one hand and large scale enterprises on the other hand.
Malawi University of Business and Applied Studies economist Betchani Tchereni said SERP had been long overdue.
He was, however, quick to note that raising resources for SERP would not be an easy task, adding that the Minister of Finance would have to integrate the plan into the 2022-23 National Budget.