Economists caution on economic performance

Economist Alick Nyasulu says the current economic underpinnings are good news, but has warned against reading too much into the current situation, arguing the economy is still gloomy.

He said in an interview on Tuesday that although government beat its target in the first half of 2016, there is no need to get excited but rather be self-reliant by ensuring that Malawians are tax compliant and pay their fair share of taxes.

He said: “Maybe it is time that we reviewed tax privileges and exemptions such as duties for the presidency and members of Parliament [MPs] as a way towards sustainable tax systems.

“We could also legislate tax exemptions for new investors to make it fair for everyone.”

In terms of inflation, he says it is high time people thought out of the box and reviewed the textbook approach to inflation targeting.

On his part, Ben Kaluwa, economics professor at Chancellor College, a constituent college of the University of Malawi (Unima), noted that though government has moved to improve the economic outlook of the country, it still leaves a lot to be desired.

He said Malawi has not been doing well on the food front; hence, inflation which is largely driven by food prices, particularly maize-taking up to 70 percent of the food basket-has remained high.

Going to the external sector which is imports and exports, Kaluwa said that at 42 percent, the import dependence-ratio of imports to gross domestic product-is one of the highest in the world and a dangerous kind of dependency.

Catholic University head of economics department Gilbert Kachamba said government needs not relax, but continue to work towards maintaining the economy’s momentum.

He said: “Looking at the economy, it seems government has taken a right direction particularly in terms of revenue collection. However, this is not particularly good enough; hence, government needs not to relax. n