Foreign exchange recovery oriented initiatives introduced in the 2024/25 financial year have failed to produce results, Business News analysis has shown.
At that time, Minister of Finance and Economic Affairs Simplex Chithyola-Banda, who is expected to present the 2025/26 National Budget this week, said the initiatives would help to stabilise the economy.
They included mega farms, labour export, carbon credit trading, mining discounted projects, cannabis biomass projects for export diversification, the visa programme, diaspora cities and enhancing diaspora remittances.
In an interview on Friday, Economics Association of Malawi president Bertha Bangara-Chikadza noted that while the mega farms project has garnered significant attention, its implementation rating remains moderate due to a lack of critical information on deliverables, thereby making it more of rhetoric.
She said: “For instance, there is limited public data on cultivated crop volumes, expected yields, contributions to local food security, or export potential.
“In contrast, initiatives like carbon credits and diaspora cities suffer from minimal visibility, unstructured reporting, and weak political prioritisation, making it difficult to assess their progress or impact.”
Chikadza, who is also a senior macro-economics lecturer at the University of Malawi, observed that to address these gaps, government must among other things mandate frequent reports for all initiatives to ascertain their achievements and alignment to structural transformation.
She says this can lead to sustainable food security and the increased overall productivity in key sectors that are key to macroeconomic transformation, stability and sustainable high growth rates that can get the country to graduate much earlier even amidst exogenous shocks.
In a separate interview, Mzuzu University economics lecturer Christopher Mbukwa highlighted that the persistent foreign exchange scarcity shows that the performance of these projects has been dismal.
He said: “Some of the said projects are still at formatting stage where you don’t expect much at this level. But others have perpetually not been able to perform as expected, for example, the mining and the cannabis projects.
“There is a need for a quick analysis of the bottlenecks impeding the progress of these projects.”
Mbukwa said specific performance indicators must be set to inform the resource allocation to these projects, adding “there is no need to allocate funds to projects whose returns are negative”.
Treasury spokesperson Williams Banda did not respond to our request for comment on the progress of the said initiatives which were highly rated
Meanwhile, the country’s gross official reserves in Reserve Bank custody have been below the internationally recommended level of three months import cover -a situation that made importation of pharmaceuticals and petroleum among others, difficult.
The report also comes as the gap between exchange rates in formal and informal markets widens, with the dollar selling at K1 751 in the formal market and as much as K5 000 in the informal market.
