Finance Minister Simplex Chithyola Banda has said he is optimistic the local economy will recover through the implementation of various strategies in the aftermath of the granting of the Extended Credit Facility (ECF) programme by the International Monetary Fund (IMF).
Chithyola Banda said this in Lilongwe when he wound up debate on the mid-year budget review statement presented in Parliament two weeks ago.
He admitted that the Malawi economy has not performed as expected in terms of GDP growth as well as inflation.
This, he said, has been largely on account of the many economic shocks that have hit the economic spine of the country including Cyclone Freddy, cholera pandemic and the Russia- Ukraine war.
According to Chithyola Banda, the shocks have had serious impact on the various supply chains of strategic commodities such as fertiliser and fuel that contribute significantly to economic growth, thereby effecting inflationary pressures in this country.
“This, however, gives me the optimism of a rebound in economic activity largely emanating from the approval of ECF which has brought back donor and investor confidence, thereby bringing about the much-needed economic stability for enhanced sustainable and inclusive growth.
“In addition, the resumption of power generation from the Kapichira hydropower station as well as construction projects across the country are expected to give the nation the much-needed boost in its productive sector,” Chithyola Banda said.
He said the ECF acts as a vote of confidence in economic governance and reforms programme for sustainable economic development.
“It is with this in mind that I would like to encourage the Honourable Members that we should not treat this ECF as an end in itself but a beginning to a better future as it gives us a platform to stabilise our macroeconomic conditions as a stepping stone for enhanced economic performance.
“That’s why my statement focused on the RDP [Recovery, Develop, and Protect] strategy which apart from efforts to recover the economy from its slumber, it outlined strategies to develop and protect our economy.
“While we celebrate, it is important to realise that it is time to roll our sleeves to work for the betterment of our people,” Chithyola Banda said.
On reductions in Other Recurrent Transactions in almost all MDAs in the wake of devaluation, Chithyola Banda said budgets for institutions have not been reduced except for external travel and fuel entitlements for senior officials.
“As regards to the decrease in wages in some votes, I would like to assure the August House that this is a reflection of lower projected expenditure based on actual performance since resources are disbursed based on monthly payroll,” he said.
On the K80 billion provision for civil servants salary increment, he said the funds will cater for special allowances and a 10 percent salary increment from November 2023 to March 2024.
Speaker of Parliament Catherine Gotani Hara then announced that Parliament will next week go into Committee of Supply to review the revised budget votes.
