Today is the second day of the New Year 2025 and I guess not too late to wish you valued readers and partners a happy New Year.
If I were asked to describe the year 2024, I would say it was a mixed bag. Here is one year the nation lost Vice-President Saulos Chilima and eight others in a military plane crash, a tragedy that will take a generation to heal. It was also a year when the climate-induced disasters caused havoc, leading to reduced harvest, especially for food crops.
Persistent fuel scarcity, which has since been carried forward into the New Year as some transitioned into 2025 while on fuel queues, also left many Malawians enduring sleepless nights at fuel stations to the detriment of their personal development and contribution to the growth of the national economy towards achievement of the aspirations outlined in Malawi 2063, the country’s long-term development strategy that seeks to turn the nation into an inclusively wealthy middle-income status.
Positives in the year included sustaining the Extended Credit Facility with the International Monetary Fund amid the external shocks, including climate-induced disasters that hit hard the agriculture sector, energy and transport infrastructure.
It would also be incomplete to take stock of the year 2024 without appreciating strides in infrastructure development despite a tight fiscal space and indeed predominantly stable power supply which was a rare experience in living memory.
But, at the same time, challenges of low foreign exchange reserves, fuel scarcity and high inflation rate continued to haunt the economy. The year 2025, an election year, should be one for every Malawian to reflect deeply on the challenges and lessons drawn to find lasting solutions.
During its last meeting of 2024, the Reserve Bank of Malawi Monetary Policy Committee (MPC) maintained the policy rate at 26 percent while also keeping intact the Lombard rate at 20 basis points above the policy rate and the Liquidity Reserve Requirement (LRR) ratio at 3.75 percent for foreign currency deposits.
When I looked at some of the policy prescriptions in the year, I wondered whether they were the right ones to heal the economy and how long it would take.
Why the above questions bothered me is because I have noted that for the past six decades Malawi has been taking the same approach to improve the economy. However, the strategies do not seem to have worked out well, something that demands novel and sophisticated models to find solutions because simplistic models that may have worked in the 1980s when the problem was single variable may not work now in a complex environment.
Economies do not recover through miracles or prayer. They do by making hard choices and strategies that will later benefit the economy at large.
Inflation is one key variable the MPC has been using to manage the economy. But truth be told, Malawi’s inflation is not really about demand as authorities often put it because it remains from the supply shocks with almost all strategic commodities, including maize are being imported. The day Malawi will find an alternative way to deal with the supply side shocks will mark the start of the road to sustained recovery.
Many people use the dawn of a New Year as a time to implement resolutions and goals to improve their situation. To achieve the set goals, some invest in further education while others put their money in property development as well as in children’s education.
To achieve more, one needs to discard old bad habits and do business unusual. It has been said before that doing the same thing over and over again and expecting different results is next to insanity.
Do you want to do great things from January 1 2025? Well, you will need to do away with distractions such as obsession with social media—especially the gossip, let go of procrastination and be consistent when doing things. Do not be contented with your current status, always have the hunger to achieve more even if it means going out of your comfort zone.
Remember, they say birds of the same feathers flock together, meaning the people you interact with have a huge influence on your life. Reflect on who you hang out with and what issues dominate your conversations, avoid bad company.
In the book Making Your First Million, Malawian economist Henry Kachaje stresses that people become what they think and this applies even to financial capabilities. He argues: “If you do not think in millions, you will not earn money in millions—simple. Your earning limitations are first set in your mind before they manifest physically.”
Wishing you a happy New Year 2025!
