Malawi aspires to become a middle-income economy at least by 2030. To achieve the target, the country needs to be posting a six percent GDP growth rate in real terms per year on average. But in the past decade, the economy has, on average, been growing by about 4 percent. What needs to be done? In this interview, WILLIAM KUMWEMBE engages National Planning Commission Director General Thomas Munthali on what could help change the country’s economic misfortunes.
We are talking at a time the local economy is very volatile; pressured by both exogenous shocks and structural challenges; are these things not making you, as a planning commission, shiver?
I think, first, one has to appreciate the context that this is coming mostly out of two things; one of it is beyond the country’s control. There have been a number of exogenous shocks. These are things that, in the process, disrupt a lot of logistics around trade and productivity of the nation.
The second aspect is what we, as a country, have neglected for some time. We have neglected the productive sectors where at times like these, we could have a buffer of resources from where we could tap. At the moment, the fiscal space is not there and the only thing the government can do is resort to debt, but unfortunately, when it comes to debt, it in the process clouds out whatever private sector would have been involved in. And again, it means we hardly have any forex. So when you want to get the debt in terms of foreign exchange, we may not get it. At the moment, our debt has even reached some unsustainable levels, meaning our credit rating becomes so low. It is a wakeup call. We need to focus more on the productive side. If we continue to do business as usual, we will not have the resources, we will continue to sink into debt and eventually it will balloon.
Considering all these factors, the central bank governor Wilson Banda suggests a slash of medium-term growth projection, saying it is not realistic anymore. What is your take?
I don’t think the issue is about downgrading because the moment you are downgrading it is like you are accepting that we cannot do anything about it. That is accepting defeat. I strongly believe that the targets, we are talking about an average of six percent, should remain intact.
But what we should be asking ourselves is; what can we do differently to make sure that the targets can be achieved. We have got what it takes if all we do is to focus on what we have outlined as catalytic interventions in MEP1. Answering your question; should we downgrade? No. It is very possible to meet the targets if we go into radical investments.
But, truthfully, to attain the middle-income economic status within the next eight years, which the country failed in 20 years under the flopped vision 2020, is a tall order, isn’t it?
No! Not at all! With Vision 2020, we had a vision but we did not have an institution to oversee the implementation part of it. The issue now is that we, as Malawians, sat down and put up a vision. Except for a bit of complementary resources coming from partners, almost all other resources came from the government. The beauty is we have an institution established through an Act of Parliament whose role is two-fold; envision for the long term and at the same time oversee implementation of that vision. And I think that is a very big difference because what it means is that we begin to hold each other accountable. If we continue on that path, we have a very high chance of meeting the targets.
Since Malawi 2063 was launched, what can be the tangible thing to write home about?
I think at this time it is a bit challenging. When we are talking about the MEP1, essentially, we could have been talking a lot more if it was not for Covid, for cyclones and other shocks. You look at infrastructure projects like the Shire Valley Transformation Programme; they could have been at an advanced stage if it were not for the shocks. We have to start afresh on certain things like consolidating on the issues of power; we had to take a little longer. Even the commercialisation of the agriculture sector itself, the issue of putting up mega farms; there is now the agitation of getting certain things in place. What is key now is to make sure that we start. One year down the line, you cannot point out certainly that this is something completed. But what is more important is that the things that matter have started.
What is it that we have been doing wrong that we need to be doing right going forward?
We as a nation, have for a long time neglected the sector; we need to sustain the social-services sector. A lot more times we have gone populist, especially because of the short electoral cycles. The government’s main role should be to facilitate the drive where private sector players thrive.
We need to be running fast in all sectors of the economy. The second point is accountability. We believe that, now that there is agitation from both the public and the leadership, we should make sure things change going forward.