Economist Saulos Chilima has said most companies operating in Malawi are ‘bleeding internally’ in the wake of the prevailing tough economic environment.
Chilima, who is also Airtel Malawi managing director, has since appealed to authorities to avoid ‘milking the already thin cow’ when coming up with various measures in the 2013/14 financial plan build-up.
“There is a lot of internal bleeding among most companies. The danger is that a person dies [eventually] and you only realise during postmortem,” said Chilima.
He was making the analogy in reaction to Business News query for him to give his expectations and suggestions into the 2013/14 fiscal plan in the wake of this week’s pre-budget consultations led by Finance Minister Ken Lipenga.
His statement, however, comes at a time when most businesses are reeling from a high cost of borrowing with commercial banks unilaterally hiking their base lending rates to as high as 45 percent, even before the Reserve Bank of Malawi (RBM) revises the indicative benchmark rate or policy rate.
Added Chilima: “It is important for authorities to nurture industries that are feeding the country. You don’t kill the goose that lays golden eggs or you don’t milk the thin cow.”
Chilima also likened the domestic economy to the sailing ship which he said needs careful stewardship since ‘if it crashes, it also crashes with people.’
He noted that there is a high default rate within commercial banks, an indication which he said speaks volumes of the nature of challenges that businesses are facing.
He also said it was imperative for government to look beyond planning for 12 months by embracing a long-term approach towards planning the country’s goals.