Reserve Bank of Malawi (RBM) Governor MacDonald Mafuta-Mwale has urged commercial banks to increase investments in the private sector to boost production, generate more revenue and enhance economic growth.
The governor’s call made during the Bankers Association of Malawi (BAM) lakeshore conference in Mangochi on Friday comes against the backdrop of data showing that commercial banks’ extension of credit to the public sector crowds out private sector growth.
“Through this [increased investment], you can help inflation to go down, government deficit can be reduced through increased revenue and the exchange rate can stabilise through higher exports that cushion foreign exchange pressures,” said Mafuta-Mwale.
He said Malawi does not produce enough for the domestic as well as the export markets, resulting in perennial trade deficits with figures showing that Malawi imports $3 billion (about K5.2 trillion) worth of goods against $1 billion (about K1.7 trillion) worth of exports, creating a $2 billion (about K2.4 trillion) trade deficit.
“But if banks can really facilitate investments in production through the private sector, we can turn around things,” said Mafuta-Mwale.
He said as a financial institutions regulator, RBM expects banks to collaborate more closely with the private sector in driving production and stimulating growth.
In his remarks, BAM president Phillip Madinga said commercial banks are already working with the private sector and are committed to accelerating investments to support economic
Audit Consult Malawi, an audit, tax and business advisory firm, has called for transformation.
“We know the importance of the private sector and we are currently working with various stakeholders to help boost the country’s economy,” he said.
Madinga, who is Standard Bank Malawi plc chief executive, said through conferences such as this one, bankers come up with strategies and solutions to enhance the country’s sustainable development.
The conference, which attracted participants from all the country’s banks, was held under the theme ‘Facing the future together: The phenomenal power of synergy’.
