The VP made the call Wednesday in Mangochi during this year’s Economics Association of Malawi (Ecama annual conference being held under the theme “Going beyond macroeconomic stabilization, the need for building resilience to external shocks."
Chilima said the conference’s theme resonates well with the current economic undertakings in light of the COVID-19 pandemic.
He said the pandemic has "challenged static reasoning and demands critical thinking, realigning policies and energies on what turns around the economy."
“In the real sector, COVID-19 has uneven impacts across sectors. Before COVID-19 set in, projections from business interviews conducted in February 2020 suggested that in 2020 the Malawi economy would grow by 5.5 percent. After COVID-19 set in, revised estimates done in April 2020 revised our growth prospects downwards to 1.9 percent. Now most recent business interviews have further lowered the GDP growth estimates for 2020 to 1.2 percent,” said Chilima.
He outlined some key turn around strategies Government has embarked on to bring the economy on a sound footing.
“We believe we will put the economy on a more sure footing as we explore more permanent structural changes. Government is committed to resolving infrastructure deficits in the shortest period. These infrastructural deficits can be quickly addressed by access to huge amounts of money under long-term financial arrangements," he said.
"Government seeks to clear arrears in private sector which in a way will be injecting capital to boost liquidity levels and broadening the tax base among others,” said the Vice President.
Dr Wilson Banda who doubles as Governor for Reserve Bank and Chairman for Ecama board of trustees, was optimistic that the economy will gradually grow despite various schools of thought suggesting further decline.
“What needs to be understood is that the country’s economy is anchored in agriculture sector and you can appreciate that despite prevalence of COVID-19, production hasn’t stalled as feared. In essence food inflation has been contained and on the monetary side we are monitoring developments on the market and responding accordingly to induce growth as evident with the recent downward revision of the policy rate,” said Banda.
Banda: we are closely monitoring the economy
Ecama believes economists hold the key in supporting government to steer the economy on track.
Lauryn Nyasulu, Ecama’s president, said the local and international restrictions have thrown economies across the globe off balance, adding: "But it’s time to think of rebuilding smarter through resilient measures."
“Pre COVID-19 growth of the economy was projected at 5.5 percent but with the coming in of the pandemic and slowing down of economic activities the growth has been revised to 1.2 percent. So you see that there has been a contraction of about 4 percent which is quite significant for the country. As economists we are here to bang heads and come up with proposed solutions to the situation which will be shared with Government through a communiqué,” said Nyasulu.
Part of the participants to this year's annual conference
She was also quick to point out the need for structural changes and deliberate policies to boost key drivers of the economy like the energy sector.
The two day conference has drawn participants from both public and private sectord with key speakers solicited from diverse affiliations such as the World Bank, International Monetary Fund (IMF) and the academia.