Veep urges economists to develop practical solutions

Vice-President Saulos Chilima on Thursday urged economists meeting in Mangochi under the Economic Association of Malawi (Ecama) banner to discuss implementable and practical solutions to existing economic problems facing the country.

Addressing the delegates to the conference at Sunbird Nkopola Lodge in Mangochi, he said the exogenous shocks such as Cyclone Freddy damaged some critical infrastructure and affected government’s capacity to provide goods and services to Malawians.

Said Chilima: “We have witnessed how negative external shocks to the economy can create much instability and can lead to persistent periods of weaker economic growth, higher unemployment, falling real incomes and rising poverty.

“This conference provides a superlative platform for in-depth policy relevant discussion on innovative strategies aimed at fostering sustainable growth amid uncertainty in the country.”

The Malawi 2023 Cyclone Freddy Post-Disaster Needs Assessment Report shows that the damage caused by Cyclone Freddy cost the country more than $500 million (K850 billion) and the total recovery for physical needs will require about $680 million (K1.1 trillion).

Further, the loss attributable to production was estimated at $36.4 million which translates into a real gross domestic product loss of 0.5 percent.

Ecama president Lauryn Nyasulu, who spoke earlier at the conference, said the exogenous shocks arising from the weather-related shocks, geopolitical conflicts and health shocks have slowed economic growth and pose a threat to the attainment of Malawi’s development aspirations espoused in Malawi 2063, the country’s long-term development strategy.

She decried the rising burden on public debt, currently at K9.4 trillion, with the debt- to-GDP ratio currently standing at 68 percent and the balance of payment crisis, which has resulted in protracted and persistent long fuel queues.

Nyasulu urged delegates to the conference to discuss ways of structuring the economy to do its key business of producing goods and services.

“These challenges have made the private sector development agenda become an urgent need now more than ever,” she said.

The two-day conference being held under the theme ‘Fortifying growth from shocks’, has brought together delegates from the academia, government and private sector to discuss ways of promoting the country’s resilience to climate related shocks.

The conference is taking place at a time the Reserve Bank of Malawi has just devalued the kwacha by 44 percent effective on Thursday.