The United Nations Economic Commission for Africa (Uneca) has pledged to work in collaboration with the Ministry of Finance towards securing the International Monetary Fund (IMF)’s Special Drawing Rights (SDR).
The organisation has also committed to collaborate with the governmnet at large towards development of micro, small and medium enterprises (MSME).
This, they say, would help Malawi and its peers in the Southern African region to build back better from Covid in fostering commodity-based industrialisation, manufacturing and regional value chains.
This came out during the 27th meeting of the Inter- Governmental Committee of Senior Officials and Experts (ICSOE) of Southern Africa last week.
ECA Executive Secretary Vera Songwe underscored the importance of countries recognising the social-economic impact of the Covid pandemic on the sub-region, leading to substantial increases in poverty, impacting social nets and transfers, and triggering a rise in inequalities.
“ECA will continue to support member states through concrete and collaborative actions such as implementation of the African Continental Free Trade Area Agreement, the African Acquisition Trust (AVAT) health response initiative, working in close collaboration with the Ministry of Finance to secure IMF Special Drawing Rights, and development of MSMEs,” Songwe said.
Finance Minister Felix Mlusu said, currently, priority for Malawi is to mobilise more resources on its own within the economy.
“We have noted that the tax base is so narrow but there are sectors that are not contributing their fair share towards taxes and we believe that if we bring everybody in the tax net, we should be able to realise far more resources than we are doing currently.
“The central dimension is the need to develop a people-centered recovery plan that focuses on well-being, improved inclusiveness, and reduced inequality. This calls for an inclusive and sustainable growth model that promotes resilience to external shocks, reduces poverty and inequality on a larger scale and makes decent job creation a priority to absorb the youth population,” Mlusu said.
During the meeting, it transpired that ECA member states are implementing budgets with large fiscal deficits averaging over 10 percent of gross domestic product (GDP), to fight the pandemic and sustain aggregate demand.
Further, the pandemic has impacted debt levels through widening fiscal deficits as revenues shrink due to disruptions of economic activity as well as contraction of export receipts.
A recent report from the Reserve Bank of Malawi indicates that import cover was seen at 1.88 months as at the week ending October 8 2021.
The reserves declined to $471.1 million from $537.7 million, representing 2.15 months of imports recorded on September 24 2021.