Reserve Bank of Malawi (RBM) has cited stabilising the currency, mitigating the risk to external shocks and bolstering domestic agricultural production as key strategic interventions to navigate the challenging economic environment.
In its latest Market Intelligence Report published on Friday on its webisted www.rbm.mw, the central bank noted varying inflationary pressures mainly driven by the continued food deficit, which has pushed food inflation to above 40 percent.
RBM, therefore, said three key strategic focus areas are key to stabilising the economy in the short to medium-term.
Reads the report in part: “Strategic interventions aimed at enhancing resilience and fostering sustainable growth are, therefore, critical in navigating the challenging economic landscape of 2025 and beyond.”
Reacting to RBM’ strategy yesterday, Malawi Economic Justice Network executive director Bertha Phiri said clear economic recovery plans to be implemented in line with 2025/26 National Budget that rolled out on April 1 are key to stabilising th economy.
She said: “The kwacha should be freed so that it finds its equilibrium.
“Ministry of Finance and Economic Affairs should be clear on the economic recovery plan because the economy is still not ticking.”
Lilongwe University of Agriculture and Natural Resources economist Horace Phiri said in an interview yesterday that the plan is critical, but urged the central bank to outline clearly the strategies to be employed to achieve the objectives.
“The plan is clear, but wht is critical is to ensure that it is actualised,” he said.
Finance expert Brian Kampanje yesterday described the three strategies as critical for redressing stunted economic growth, currently below the minimum six percent economic growth rate set in the Malawi 2063 First 10- Year implementation (MIP-1) which runs from 2021 to 2030.
He said: “Malawi is currently off-track on its MIP-1 and therefore the wholesale implementation of the three aforementioned strategies is not an option.
“Boosting agricultural production is an imminent need because the cost of food is beyond the reach of the majority of the Malawians as most are struggling to afford maize which is too expensive when compared to their incomes.”
Kampanje said stabilising the kwacha is one of the ways to contain cost-push inflation and ensure that Malawi achieves per capita income of $1 000 (about K1.7 million) by 2030 as espoused in the MIP-1.
He said: “The initiative of containing the black market through enforcement of importing goods and services using the banks should bear good fruits by mid-2025 if properly implemented.
“Tracking of all the export proceeds through CD-1 form [export declaration form] can improve foreign inflows and engaging Malawians in the diaspora to use formal financial systems will boost the forex reserves.”
Kampanje further said Malawi needs to continuously search for viable alternative sources of commodities such as fertiliser and cooking oil while increasing the trading partners to reduce the risks associated with global market dynamics.
Economics Association of Malawi senior economist Lucius Pawa said yesterday there is need to be realistic in economic projections, urging coordination between fiscal and monetary policies.
“Expectations on inflation are optimistic. We need to be realistic,” Pawa said, stressing the need for sound macroeconomic fundamentals to sustain stability,” he said.
Malawi has over the past years been experiencing a number of challenges that include high inflation rate at 30.7 percent, a volatile exchange rate, low foreign exchange reserves at below thre and cost of living crisis that continues to affect people’s disposable income.
