Make 2024 the turning point, consolidate gains

Monday, January 1st marked the dawn of the New Year 2024 which I dare say is critical for the country given that each passing day will draw us closer to the September 16 2025 General Elections.

Naturally, the New Year was ushered in with pomp and fanfare by all manner of people through a variety of events, including crossover prayers and dance parties nationwide.

The New Year has come on the back of a turbulent storm on the economic front that has left many individuals and organisations bruised in one way or the other as they pushed on to keep afloat.

Ever since the Covid-19 pandemic whose first confirmed cases were recorded in the country in April 2020, Malawi has struggled to fully recover. The recovery strategies were further derailed by a combination of other external factors, including the slowdown in the global economy also worsened by the Covid-19 pandemic as well as tropical storms that destroyed road, electricity and other infrastructure.

In the past two years, the local currency has been devalued twice, first a 25 percent review in May 2022 and later by 44 percent in November 2023 to realign the exchange rate with the parallel market amid scarcity of forex in authorised dealer banks (ADBs). The scarcity of foreign exchange made importation of other strategic commodities such as fertiliser, fuel and medicines a tall order, leading to prolonged shortages and queues in filling stations.

During the past year, Malawi Government secured the Extended Credit Facility (ECF) with the International Monetary Fund (IMF) after prematurely cancelling a previous ECF in September 2020 and forfeiting a $70 million disbursement. This time around, Malawi has been granted a four-year $175 million loan under ECF to be disbursed in four equal instalments.

I must say that the IMF financing or loan may not be colossal in itself, but is a catalyst for injections from other donors and partners. Meanwhile, the World Bank and the European Union have already disbursed some funds and committed to resume direct budget support. It is such injections that may help to stabilise the economy if our duty-bearers play ball by ensuring adherence to public finance management and other measures meant to heal the economy.

Malawi also formally sealed the $350 million second compact under the Millennium Challenge Corporation, United States of America government urgency. The new compact is focusing on road infrastructure to stimulate agricultural productivity and commercialisation, one of the three pillars in Malawi 2063 (MW2063), the country’s long-term development strategy. This is to roll out early this year.

In the recent past years, Malawi kind of laid a foundation for economic development and recovery by putting in place measures to resuscitate it. The measures have been tough and made life unbearable for Malawians who woke up to the realities that they cannot afford most of the things they managed before.

They say to get healed one must endure swallowing bitter pills. Malawians have endured such processes for long in the hope that things will improve, however, many times they have been given a raw deal as, before the expected recovery, usually the storm returns to their chagrin.

Politics has been a major contributing factor to the worsening fortunes among Malawians. It gets worse in an “election year” like the one we are facing ahead as political parties at the helm of successive administrations have tended to throw all caution to the wind and spend without regard to the consequences as long as their spending will keep them in power.

It is, therefore, my prayer that in 2024 and beyond duty-bearers will work to ensure that the economy stabilises and Malawians reap the fruits of the pain they have endured over the years of rebuilding, as it were. Today, a negligible number of Malawians can afford three meals a day aka kudya katatu, surely we cannot go on like that or malnutrition will worsen and make the attainment of MW2063 aspirations a pipedream.

This should be the time for our duty-bearers to learn and walk the talk that good economics makes good politics. Do the right things on the economic front and the politics will fall into place, not the other way round.

So, as we celebrate the New Year 2024, let us reflect and make it a turning point by consolidating the gains made as both individuals and the country.

Happy New Year 2024!