Finance Minister Felix Mlusu has said unless the country is hit by another devastating Covid wave, the economy is poised to recover in the short to medium terms.
In an interview on the side-lines of the 27th Inter-governmental Committee of Senior Officials and Experts which ended yesterday, Mlusu reiterated the need for contextualised analysis of the economy as pangs of Covid pandemic remained eminent.
Mlusu said the Treasury was implementing plans aligned with available resources towards recovery and to propel growth going forward.
“Things are not going to happen overnight; they will take a bit of time and when the President was being sworn in, he said we should be prepared for pain before we can start enjoying the fruits of the change in government.
“In the short term, there are things we are going to deal with and some pain that, Malawians are going to bear but I assure you that going forward, things are going to get better,” Mlusu said.
“We are injecting liquidity into the economy so that it ticks; there are developments in the transport sector, as roads are being constructed; we have paid and we continue to pay arrears that we found in government, close to K230 billion. As these businesses are recovering, we will be able to make money from them.”
Mlusu further said widening of the tax base, investing in the mining sector including a samples testing in laboratories and promotion of exports are some of the plans that will enable the government to improve its resource mobilisation and run development projects.
This is coming at a time the economy is facing inflationary pressures from increasing prices of strategic commodities such as fertiliser and fuel on the global market coupled with a volatile exchange rate and depleted foreign exchange reserves.
Recently, an International Monetary Fund (IMF) mission team, led by its African Department Director Abebe Aemro Selassie, said Malawi should address issues such as debt which is now at K4.7 trillion, and the Democratic Progressive Party’s misreporting to IMF on Gross Reserve Assets and Net International Reserves for 2018 to 2019.
“These issues need to be addressed and, as soon as they are addressed, we should be in a position to move forward with the programme with the IMF,” he said.
In an interview yesterday, Economics Association of Malawi Executive Director Frank Chikuta said negative economic growth was very unlikely for Malawi unless the country experiences a severe drought.
“Historic trends in gross domestic products (GDP) growth show that all recessions were explained by weather patterns. The structure of the economy has not changed much. It is still largely reliant on rain-fed agriculture.