Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has warned businesses to be on the lookout and stay agile in their operations as the economic future looks uncertain.
In a statement released last week, the private sector lobby group said key threats to the economy are a result of lack of effective economic governance or deliberate efforts not to implement relevant reforms.
The statement, which also delves into the performance of the kwacha, argued that the private sector still remains the engine of economic growth and if there are no policies and regulations aimed at building the productive base, economic challenges will persist.
Reads the statement in part: “While noting that the local unit’s stability is threatened by lagged impact of uncontrollable challenges in 2015 such as weather-related shocks, practically, we all know that the kwacha’s massive depreciation emanates from weak export base. The question is; until when should we continue to rely on tobacco export proceeds?”
MCCCI said Malawi has strategic commodities that can bring more foreign currency, which could stabilise the kwacha as articulated in the National Export Strategy (NES).
In an interview last week, MCCCI president Newton Kambala said the Reserve Bank of Malawi (RBM) is theoretical in addressing the challenges threatening the local currency.
“We need to apply what is practical in Malawi. What they are doing is not practical for us. RBM thinks that inflation can be tamed by increasing lending rates, which is wrong.
On January 28, RBM released a statement to inform Malawians about the causes of kwacha depreciation and outlook in the near term necessitated by the sharp and longer than anticipated depreciation of the currency since July 2015.
The central bank, however, said it is misleading to equate the fall of the kwacha to the collapse of the economy.
It said the kwacha has performed relatively better than in other countries when they floated their currencies in the 1980’s and 1990’s, adding that Malawi continues to pay for its international obligations.