By Isaac Salima:
Stakeholders at the Public Affairs Committee (Pac) conference Tuesday had a field day as they demanded answers from government officials about the struggling economy.
Pac convened an All-Inclusive Stakeholders Meeting with a focus on the triggers of election violence. The engagement winds up today.
However, economic issues took up a larger portion of the deliberations, with stakeholders asking officials about the steps being taken to recover the economy.
Mafuta Mwale
Reserve Bank of Malawi (RBM) Governor Macdonald Mafuta Mwale was the first to make his presentation on Malawi’s economic situation.
The governor, who took charge of the central bank four months ago, said that the depreciation of the local currency is not a solution to the current economic challenges.
Mwale said the devaluation of the Kwacha always has serious implications for inflation, hence it is not the way forward.
“Devaluation is not a solution because it always has serious consequences, especially on inflation. Traders tend to push their prices higher, further punishing Malawians. If you were to ask me, this is not the way to go,” he said.
The RBM chief added that the country should instead focus on other sectors such as agriculture and mining, as they have the potential to grow the economy.
“The solution is to produce and export. To devalue the Kwacha in this current state is not a solution. If we invest, for instance, in mining, by 2030 it could contribute over 10 percent to the country’s GDP,” Mafuta Mwale said.
In his remarks, Minister of Finance Simplex Chithyola Banda clarified on the collapse of the Extended Credit Facility by the International Monetary Fund (IMF).
“This is only the suspension of the programme. The programme has not been terminated, as some people are alleging. Officials from the IMF will be in the country on Thursday so that we can continue with our discussions,” he said.
The government officials were being questioned following a 25 percent devaluation of the local currency by RBM in 2022 and a 44 percent depreciation in 2023.
Chithyola, however, maintained that it was necessary to devalue the Kwacha at that time.
People’s Party secretary general Ben Chakhame wondered what the country has been doing with the funds it has been borrowing.
He wanted to know what measures are being taken to improve the foreign exchange situation in the country.
“Forex is coming. I am very confident about that,” Mafuta Mwale responded without clarifying where it would come from.
He further decried what he described as government systems and policies which hinder the implementation of set programmes.
At one point, tempers flared as activists Bon Kalindo and Sylvester Namiwa were denied an opportunity to ask their questions.
Moderator Maggie Kathewera Banda said time was up and that d
