Economic recovery path impresses World Bank

The World Bank says Malawi has achieved incredible economic results in the last three months despite concerns on macroeconomic stability and expenditure-side controls.

Speaking during a meeting with Minister of Finance and Economic Affairs Simplex Chithyola Banda on Thursday in Lilongwe, the regional director for Macro, Equity and Institutions for Africa East and South at the World Bank, Hassan Zaman, said the consultations and collaboration that the ministry made were necessary and have been impactful.

Zaman said the Malawi Government should strive to close the gap between the official and parallel exchange rate to foster the gains accrued from the International Monetary Fund (IMF) Extended Credit Facility (ECF) that the country qualified for recently.

“The objective of our coming was to meet the authorities to take stock of the recent macroeconomic adjustments instituted by the government and to discuss how the World Bank can continue to work with the government to support its most important structural reforms to unlock private investment and growth.

“The bank is fully committed to supporting the Ministry of Finance and Economic Affairs with financial management capacity building,” he said.

Zaman said the results in three months since the minister assumed office have been incredible but government needs to enhance macroeconomic stability.

In his remarks, Chithyola Banda said the country is in a defining moment where qualification for the IMF Extended Credit Facility has triggered huge economic expectations from Malawians.

“The sluggish economic growth projected at 3.3 percent by the IMF team is as a result of the huge economic malaise and damage that has characterised the economy for so long.  We are working on diversifying the economy through mega farms enhancement, labour export, mining discounted projects, among other measures,” he said.

The minister also said he consulted widely with different stakeholders to come up with the recovery, develop and protect (RDP), a roadmap to address fuel, forex, food and fertiliser problems in the short-term and develop and protect the economy in the long-term.

He said the Ministry of Finance and Economic Affairs is geared towards adhering to strict fiscal discipline and reducing the domestic debt as pointed out by the World Bank.