Mutharika promises 7.5 percent economic growth rate

Malawi’s new President Peter Mutharika has said his government will implement policies that will turn around the country’s economy to achieve a 7.5 percent economic growth rate for the next five years.

However, a local analyst has doubted the attainment of the economic growth rate.

Speaking during his inaugural speech at Kamuzu Stadium in Blantyre on Monday, the new President said the government will take a bottom-up approach that involves and directly benefits ordinary people.

Malawi’s economy is estimated to have grown by about five percent in 2013 according to International Monetary Fund (IMF) after growing by about 1.9 percent in 2012.

After recalling how the previous Democratic Progressive Party (DPP) government grew the country’s economy between 2006 and 2010, the President said the new government will deliver a people centred economic growth at the rate of 7.5 percent for the next half a decade.

“Our plans are to build a new network of first class roads across Malawi. We want to make Farm Input Subsidy Programme (Fisp) available to all subsistence farmers and to improve the delivery of the system. We will implement a biometric system where beneficiaries will use fingerprints. We will also introduce a subsidy programme on cement and iron sheets,” said Mutharika.

But in a telephone interview on Monday, Chancellor College professor of economics Ben Kaluwa doubted the attainment of 7.5 percent growth rate in the next five years.

He also cautioned government to be careful on the implementation of the subsidy programmes.

“We have had a number of things wrong and it will be difficult for the economy just to grow by 7.5 percent. We also need to be careful on the implementation of the cement and iron sheets subsidy programme because we already have a controversial Fisp that drains a lot of government resources but ends up benefitting people that are not targeted,” said Kaluwa.

Commenting on the statement which has highlighted a number of infrastructure development, the Green Belt Initiative (GBI) and national unity, Indigenous Business Association of Malawi (Ibam) president Mike Mlombwa who was present at the inauguration ceremony said there is hope in the promises that Mutharika has made.

He pointed out that infrastructure development plans like road and rail network, the Nsanje World Inland Port and the GBI will revamp economic growth.

“Its pleasing that the President has pointed out the importance of working together as a nation regardless of our political differences. That way we will see Malawi developing,” said Mlombwa.