Malawi Confederation of Chambers of Commerce and Industry (MCCCI) president Lekani Katandula has said the recent tough but “decisive” economic policies the government implemented are yielding the domestic economy massive dividends.
Speaking on Friday night at Sanjika Palace during a presidential dinner for business captains, he said the 44 percent kwacha devaluation is now unleashing so many positive economic multiplier effects into the economy.
Katandula: The country is now
on right trajectory
Said Katandula: “I applaud the government for taking such a bold decision. As a result, we immediately qualified for a new ECF [Extended Credit Facility] with the International Monetary Fund] and also we have seen resumption of direct budget support.”
He said although foreign exchange situation has not yet fully stabilised on the market, the chamber is aware that the country is now “on the right trajectory.”
Katandula said the private sector still has a huge backlog of foreign exchange on the back of huge demand for the commodity.
He said as it stands, the private sector is taking a conscious stance following the devaluation, explaining that they cannot fully increase remuneration bills as it would increase inflationary pressures in the economy.
Katandula also bemoaned lagged effects of external shocks in the economy citing devastating impacts of Cyclone Freddy, the war in Ukraine and other previous tropical storms which he said hit the economy at a time it was beginning to recover.
Speaking separately, NBS Bank plc chief executive officer Kwanele Ngwenya, whose bank sponsored the dinner, said the role of the business community, including banks cannot be overemphasised.
He said last year, the economy saw a massive improvement in the trade gap from minus $1.7 billion to minus $350 million, representing an 80 percent slump.
But Ngwenya clarified that the reduction was mainly due to a decline in imports and not necessarily due to increase in exports; hence, the need for a focused strategy to boost exports.
In his brief speech, President Lazarus Chakwera urged the business community to think outside the box and start proving tangible solutions to economic problems gripping Malawi.
“Break those boxes, I hear answers almost everywhere I go but little solutions to our problems, let us change, going forward,” he said.
Malawi consumes $250 million worth of foreign currency every month which translates to an annual import bill of $3 billion.