If wishes of the G-7 Ministers of Finance at their Meeting in Paris, France come to pass, the World Bank and its sister Bretton Woods institution the International Monetary Fund (IMF) are set to step in with packages to stimulate economies of import-dependent vulnerable countries in the Global South such as Malawi.
The developing economies are bearing the impact of the joint US-Israel war on Iran unleashed on February 27 2026 that has disrupted supply chains and pushed up costs for energy, fertiliser and other key commodities due to the closure of the Strait of Hormuz, a waterway that handles at least 20 percent of global oil and other commodities.
Earlier this week, precisely on Tuesday, France’s Minister of Finance Roland Lescure told the G-7 meeting that alongside his colleagues and their governors of central banks they have implored the IMF and World Bank to step up the efforts.
“We all share a common view. Those imbalances are not sustainable,” he told journalists after the meeting.
There could not have been better news this week. The Middle East war has hit poor economies hard, washing away all the gains made, especially on the macroeconomic front with inflation under threat due to rising prices of oil and fertiliser and, the bigger picture, a potential global recession looming.
Most of the affected countries such as Malawi depend on agriculture and use fertiliser to nourish soils to boost production. In that regard, any further spike in fertiliser prices could have a significant effect on food security, exports and economic growth.
This is why it is crucial to build these partnerships and work out the stimulus packages to give a push.
But, at the same time, it is important to end the conflicts that are holding the whole world to ransom, disrupting livelihoods and destroying economies. There is more to gain from a peaceful world than one rife with warfare mostly perpetrated to fulfil minor or selfish interests of a few. The world, mostly the Global South, is yet to recover from the economic shocks caused by the Covid-19 pandemic and the Russian war on Ukraine started in February 2022.
It is unfortunate that while efforts to end that conflict were underway, the war on Iran, again in February but of 2026, was unleashed.
Typical of the African proverb ‘when two elephants fight it is the grass that suffers’, the burden is being borne by innocent poor countries that have over the years worked hard to stabilise their economies, building on the gains only for these conflicts to scatter them in a blink of the eye. What is cruelty or “crimes against humanity” if this isn’t? It is evil, I must say.
In April this year, World Bank Group president Ajay Banga hinted at a package in the region of between $80 billion and $100 billion over the next 15 months for countries hit hard by the war in the Middle East. During the Covid-19 pandemic, the bank disbursed $70 billion for a similar cause.
These efforts are welcome and reflect growing realisation that the needless conflicts are hugely and negatively impacting global economic growth and inflation mostly in developing countries already burdened by debt and other structural challenges.
The G-7 Ministers of Finance comprising Canada, France, Germany, Italy, Japan, the United Kingdom and the United States and the EU also agreed on the need to re-open the Strait of Hormuz and support Ukraine. To achieve lasting peace, though, the US and Russia hold the key.
Writing in the World Outlook Report earlier this year, IMF economic counsellor Pierre-Olivier Gourinchas stated that “the global outlook has abruptly darkened following the outbreak of the war in the Middle East” and further warned about a pending energy crisis of unprecedented scale” if the war drags on. The war has dragged on…
Malawi and the other poor countries in the Global South may have their own challenges, but the conflicts are also frustrating their efforts to heal their economies to get better.
For Malawi, Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha in April stated that a recent $80 million (about K140 billion) World Bank grant and pending Rapid Response Facility stand to stabilise the economy and cushion external shocks.
Malawi’s economy is also faced with slow growth and the United Nations (UN) recently said economic transformation remains slow and constrained by deep structural weaknesses that could derail further implementation of Malawi 2063 (MW2063), the country’s long-term development strategy that seeks to transform the economy to lower middle-income status by 2030 and upper middle-income by 2063.
In the K10.9 trillion 2026/27 National Budget, economic growth is projected 3.8 percent in 2026, up from 2.7 percent in 2025 and further strengthen to 4.9 percent in 2027. However, this growth rate is still far from the desired sustained six percent rate to achieve meaningful impact to drive MW2063.
Definitely this is not a desirable situation; hence, my prayer as stated in the Lord’s Prayer in Matthew 6:9-13 in the New Testament, is that the conflicts should “deliver us from evil” through the stimulus packages.
