The Minister of Finance, Economic Planning and Development Goodall Gondwe says he wants to see Malawi out of the list of the Least Developed Countries (LCDs) by 2020 on account of continued economic growth.
Speaking in an interview on the sidelines of Reserve Bank of Malawi (RBM) Monetary Policy Conference in Mangochi on Tuesday, Gondwe said he hopes by 2020 the country can generate enough wealth to make it out of the LCD list.
The country’s purse keeper banks his hopes on reduced interest rates and reliable electricity for the dream to come true.
Said Gondwe: ‘It pains me each time I see a report from outside the country that Malawi is the poorest country in Africa. We are determined that this should stop. Therefore, the way to do it is to stand up and work hard and ensure that our economic growth is much higher than it was before.
“I know some of you [policy experts] will be asking how about the issue of electricity outages? Well, I sit on a committee that is looking into this issue and I can assure you, that we will soon solve this problem. I cannot tell you when, but I know it should be before May 20 2019.”
In March this year, Malawi, alongside other 43 other LCDs, missed out on the United Nations Committee for Development Policy (CDP) recommendation for graduation from the list of 47 LDCs.
The committee’s recommendations follow increases in the national income in all countries, plus improved education and health. Government development policies, as well as an improved global economic environment and the coordinated efforts of the international community have also driven the progress.
Economists have long argued that the current social-political environment is one of the contributing factors to slow progress the country is making in its quest to graduate into a middle income country.
However, despite missing out on growth projections in recent years, Gondwe said Malawi’s growth rate remains the best in the Southern Africa region.
But government annual economic reports from 2011 to 2017 indicate that in the seven year period, Treasury had been revising downwards growth projections, with the years 2013 to 2014 having positive revisions.
For instance, in 2011, government had projected the economy to grow by 6.9 percent, only to come down to 4.3 percent. In 2012, the economy grew by 1.9 percent from the earlier projected 3.5 percent.
Growth had surpassed projection in 2013 and 2013 at 6.1 percent and 6.2 percent from the projected 5 percent and 6.1 percent respectively.
In 2015, the economy grew by 3.1 percent from the projected 5.4 percent while in 2016; it grew by 2.9 percent from the projected 6.6 percent.
The Ministry of Finance, Economic Planning and Development earlier this year also revised downwards 2017 and 2018 growth projection, to an average of four and 4.5 percent respectively from the initial 6.4 percent and six percent, respectively.
Economics Association of Malawi (Ecama) president Chikumbutso Kalilombe observed on Tuesday that while this has become a norm to revise growth targets, businesses in the country bear the brunt.
He explained: “Businesses formulate growth projections based on government figures. When government figures are revised [as has been the case over the years] businesses miss strategic thrust. Some take a wait-and-see approach thus not investing into the economy which makes the economy stagnant.”