Prosper Ndlovu recently in Lusaka, Zambia
MALAWIAN President Professor Peter Mutharika says tough austerity measures implemented by his government have saved the country from economic collapse with a growth rate of four percent expected this year and six percent in 2019.
He told fellow Heads of States and Government who attended last week’s 20th Common Market for Eastern and Southern Africa (Comesa) Summit that significant strides were being made and that Lilongwe was doing its best to foster economic development in the country.
“As a country, we are also doing our best to improve our economy so that we can participate in the regional economic affairs as a stronger country. But Malawi’s economic path has been a steep road to climb in the last four years,” said Prof Mutharika in his inaugural speech before the close of the summit.
“In these few years, we have taken GDP growth rate from 2,4%. In the 2018/2019 financial year, we expect growth to be at 4% in 2018 and rise to 6% in 2019.
“We had to take the route of tough austerity measures, which included cutting down on travel. Regrettably, that may have limited our participation in some forums but we just had to cut down on spending in order to improve the economy.”
The Malawian leader said since his takeover as president in 2014, he has made progress to transform the economy despite the odds. He reminded the gathering that Malawi had sunk to a level where its deficit nearly equaled its annual national budget, a trend he blamed on corruption by public officials.
“There was simply no money because of the massive looting of government resources that we called ‘Cashgate’,” he said.
The president said the economic malaise in the country was worsened by the 2015 tragedy of national floods and drought in one year. These resulted in crop failer and subsequent hunger throughout the country. In 2016, Malawi had another drought and crops failed again.
“Throughout this time, Malawi had no budgetary support from any donor. But we achieved economic recovery without donor budget support through crises of national disasters,” said Prof Mutharika.
Four years ago, he said Malawian inflation topped 24% but said the country has managed to attain single digit inflation.
“Four years ago, interest rates were at 42 per cent. Today, interest rates are at 16 per cent. We have also taken our foreign currency import cover from the lowest point to the highest point in our economic history,” he told the Summit delegates.
President Mutharika said from an import cover of two months, Malawi has improved to an import cover of six months, adding that local currency was now stable and predictable.
“We are also implementing a robust Foreign Direct Investment program. Malawi has significantly improved on the Global Doing Business Index. Our goal is to have smaller Government and a bigger private sector. We believe this is the way the region must go,” said President Mutharika.
He assured his regional counterparts that Malawi will continue doing everything possible to become a dependable partner and team player in the region.