Minister of Economic Planning and Development Goodall Gondwe feels it is necessary for Malawi to resume attaining high economic growth rates which averaged 7.5 percent during the late president Bingu wa Mutharika regime.
Gondwe is banking hopes on the Economic Recovery Plan (ERP) which will help the country recommence sustainable higher economic output which fell drastically last year.
“That is why government found it necessary to embark on a [recovery] programme that would aim at the resumption of earlier trend of sustainable high economic growth rates,” he said last week.
A rebound in the higher growth rates for Malawi as envisaged by Gondwe would entail a robust total market value of all final goods and services that Malawi produces in a given year which is equal to corresponding high consumer spending, investment levels, government spending and a high value of exports, minus the value of imports.
Malawi growth rate fell sharply to 4.3 percent in 2011 and 1.9 percent in 2012 from a growth rate of 6.7 percent in 2010 and a peak of 9.7 percent in 2009, which was only second to oil-rich Qatar.
The decline in the gross domestic product (GDP) growth rate was largely due to a huge evaporation of foreign exchange reserves which in turn triggered a catastrophic fuel crisis and the inability by Malawi to sustain the importation of strategic imports.
“To address these challenges and resume high growth rates, the government developed the economic recovery plan and I am optimistic that with mechanisms that we have put in place, we will resume high growth rates,” said Gondwe.
He said if Malawi is to continue with the plummeting growth rates, it would compromise the implementation of the second Malawi Growth and Development Strategy (MGDSII), an overarching medium-term policy covering the period 2011 to 2016.
The minister said the ERP will provide Malawi with a conducive and stable macroeconomic environment and, consequently, sustain Malawi growth rate.
Goodall also sounded upbeat that with the recovery plan in place, government is also geared towards reducing interest rates, reduce the skyrocketing inflation rate-currently towering at 34.6 percent.
The International Monetary Fund (IMF) managing director Christine Lagarde, who visited the country early January this year, said her institution expects Malawi to grow by 5.5 percent this year which is double the growth rate estimated in 2012.
The 5.5 percent growth rate is also what Finance Minister Dr. Ken Lipenga meted out last year when he presented out the 2012/13 national budget.
Last year a slump in agriculture emanating from a weather-related decline in maize production and a halving of the tobacco crop prompted the Bretton Woods institution to revise growth rate downwards to 2 percent towards the end of the year 2012.