Malawi’s Minister of Economic Planning and Development Atupele Muluzi said Friday the Malawi economy needs to mobilise its own resources to accelerate economic growth.
Muluzi was speaking in Mangochi during the official opening of a third annual conference of the Association of Business Journalists (ABJ) convened under the theme ‘Encouraging Malawi’s economic independence’.
“Despite the need for additional external financing, it is important that domestic resources be mobilised to avoid increased aid dependence,†he said.
Currently, Malawi’s donors contribute about 38 percent to the national budget, according to Muluzi, a situation economic analysts believe has over the years weakened Malawi’s ability to attain economic independence.
Overreliance on donors has, however, dealt Malawi economy a heavy blow over the years as it has fueled the scarcity of foreign currency at a time when donors withhold aid to Malawi because of governance or economic concerns.
Donor aid to Malawi is the second major important source of foreign currency after tobacco, which wires in about 60 percent of all foreign currency proceeds.
Muluzi, however, observed that there is no doubt that growing the Malawi economy at a faster rate would require substantial increases in resources for investment, coming from both external and domestic sources.
Muluzi said, ideally, Malawi ought to be increasing the share of domestic resources gradually and steadily.
“Some 200 years ago, the first president of the United States, George Washington, warned the America people that the surest way to lose their hardwon independence was to become reliant upon foreign borrowings. His words ring just as true today as they did then,†added Muluzi.
The minster noted that public finance in Malawi has gone through some major radical changes since the country got independence in 1964.
He said by 1973/74 fiscal year, domestic tax and other revenue were more than adequate to cover recurrent expenditure.
Muluzi said, as part of the recovery plan, government has emphasised on commercial agriculture and tourism given their potential for rapid contribution to foreign exchange earnings.
He said government has taken a number of reforms to take the economy on a path of sustainable development by emphasising ownership, focus on results, inclusive development partnership and transparency and accountability.
ABJ national coordinator Thomas Chafunya said business journalism is now critical and is taking centre stage as the country is on a recovery path.
He reiterated that goods economics makes good politics, adding: “You can’t separate economics from politics.â€
He called on government to take on board business journalists as it implements the Economic Recovery Plan (ERP).
