Minister of Finance Felix Mlusu has appealed for patience from Malawians on the prevailing poor economic situation, saying government is working on strategies to rebound the economy.
The minister made the appeal in an interview on Tuesday at Parliament Building after the House passed three money Bills. He was asked to explain what government was doing to contain the worsening macroeconomic environment which has seen kwacha losing value, foreign exchange shortage and rising cost of goods and services which Malawians are complaining about.
Mlusu admitted that all was not well and that government has been listening to cries of the citizens about the economy, but appealed for patience, saying all will be well as this is just a transition.
He said: “It is true things are not well and nobody can deny that we are going through a difficult period, even the President said we are going to have pain in the initial stages.
“But we are putting strategies to turn around the fortunes of this economy through various sectors to re-energise the economy.
“We appeal for patience, let me assure you that in the coming months we will be busy implementing projects that we will be releasing money into the system, employing more people, buying more goods and services, this will move the economy strongly going forward.”
Mlusu said apart from the projects, government is also promoting export of crops, both value-added and raw to diversify foreign exchange sources.
Parliament unanimously passed three money Bills, including two about World Bank grants amounting to K28.3 billion and K156.9 billion supplementary Appropriation Bill.
Mlusu presented the Bills in Parliament and said government will only pay commitment charges on the grants as its contribution.
He said: “This is free money given to us by the World Bank, we will only pay commitment charges which is money that is paid to any bank as processing fees for the money.
“The grant is very critical because it will help us among others buy Covid-19 vaccines for the population as well as buy some oxygen equipment needed in our hospitals. The Bill gives us access to the World Bank grant”.
The World Bank grants include the K24 billion International Development Association (IDA) additional financing for Covid-19 Emergency Response and Health Systems Preparedness Project Loan Authorisation Bill.
The K24 billion is additional financing from the World Bank following a K5.2 billion financing for the project disbursed in April this year.
The objectives of the project are to prevent, detect and respond to the threat posed by Covid-19 in Malawi and strengthen national systems for public health preparedness.
The project constitutes a phase of the Multiphase Programmatic Approach (MPA) Programme and consists of the Original Project and accompanying activities such as case detection, confirmation, contact tracing recording, among others.
The second grant is the K4.3 billion IDA Additional Financing for Equity with Quality and Learning at Secondary Project. The overall objective of the project is to improve the quality of science and mathematics instruction in community day secondary schools (CDSSs).
On the supplementary appropriation Bill, Mlusu said the K156.9 billion are resources that were spent in the 2020/21 National Budget on emergencies such as containment of Covid-19 through procurement of personal protective equipment, purchasing of food for citizens affected by hunger, among Other Recurrent Transactions (ORT) in ministries, departments and agencies.
However, members of the opposition accused the government for excessive borrowing which is harming the economy through high interest rates and high inflation leading to rising cost of living.
On his part, Democratic Progressive Party spokesperson on Finance Joseph Mwanamvekha cautioned the government to manage resources prudently, saying rising debt levels is counterproductive.