The World Bank has tipped Malawi to work on bold reforms including enhanced exports, sound debt management and cushioning for the vulnerable if the current economic status has to improve.
World Bank Country Manager, Hugh Riddell, said this in Lilongwe during the launch of the 15th edition of Malawi’s Economic Monitor which has been titled ‘Strengthening Fiscal Resilience.’
Riddell said the war in Ukraine and Tropical Storm Ana has affected Malawi.
The report further indicates that the challenges the country is facing have been exacerbated by low crop production, limited resilience projects to disasters and the COVID-19 Pandemic.
it also points out that an increased inflation rate will worsen poverty levels in the country by three percent.
Riddell said it’s time the country addresses the micro-economic challenges adding that Malawi’s foreign reserves have decreased and that the country’s external and public debt is at high risk of distress.
‘What we are seeing at the moment in the economy is the lack of fiscal and foreign exchange buffers. The country faced a real challenge with COVID and the economy slowed down. What the country needs are the buffers to be able to respond to the shocks and bounce back from them and that requires a private sector that is active in driving the economy, creating jobs generating foreign exchange, and generating revenues.
“Government can then invest in human capital development and social protection to protect the poor, so a lot of what we are saying comes back to the private sector and what we need to see in Malawi is a more proactive policy approach to attract foreign investment domestic investment into Malawi’s great opportunities. we see a lot of opportunities in this economy but it’s going to need the private sector to play their role to bring that capital technology in.”
Minister of Local Government, Blessings Chinsinga, said the government remains committed to ensuring the country achieves fiscal stability and will make sure the recommendations are taken on board and that results are seen.
“We have already started making sure that we take the implementation of these reforms seriously. So going forward Malawians should expect the ministry to go flat out to ensure that all the necessary outstanding policy issues are addressed so that we create an environment in which decentralization is successful,” said Chinsinga.
Malawi has been sailing through economic turbulence which among others has seen a 25 percent devaluation of the Kwacha and inflation rising as high as 19.1 percent in May.
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