Economics Association of Malawi (Ecama) has emphasised on the need for immediate action if the economy is to get back on track.
In an interview on Friday on the sidelines of an Ecama public debate in Blantyre, the group’s president Henry Kachaje said it is clear the economy is not ticking.
He said: “We need to see what we must do quickly so that the economy gets back on track. I think there have been times when we see some temporal movement of the local currency against the major currencies, but what we must ask ourselves are questions as to why it is gaining, is it because we have produced more as a country?
“Is there something we can attribute to that kind of currency stability? If we cannot pinpoint to something like that, then we must get back to the drawing board and fix the things that can sustain the economy.”
Kachaje said Malawi needs a long-term plan that spells out where the country is going.
He said coupled with that, there is need for policy realignment so that policies the country is developing and pursuing are aligned to long-term development vision.
President Peter Mutharika’s chief economic adviser Collins Magalasi, who participated in the debate, agreed with Ecama’s observations on the economic situation, saying: “We do not have to wait to be told that our economy is not in good shape, but our duty as government is to keep improving and that is what we are trying to do”.
On the concern that the rate at which government is implementing its projects is slow, he said the observation is right and “this is why government has prioritised the public sector reforms so that we become efficient and effective.”
Ecama’s public debate came in the light of tough economic environment, characterised by high inflation rate at 23 percent as of August 2015, according to National Statistical Office (NSO), high interest rates in commercial banks, hovering around 37 percent as well as a downgraded gross domestic product (GDP) growth rate of three percent this year from an earlier projection of 5.5 percent.
A fortnight ago, an International Monetary Fund (IMF) mission to Malawi declared the country’s three-year Extended Credit Facility (ECF) off-track due to fiscal slippages equivalent to about two percent of GDP, which emerged during the second half of 2014/15 financial year, in part because of overspending on the wage bill. n