Malawi reforms impress AfDB
The African Development Bank (AfDB) has said it is impressed with Malawi’s recent economic reforms which has helped government re-engage donors to support its macro-economic and structural reform programmes.
AfDB regional director Chiji Ojukwu was speaking on Wednesday at a stakeholders workshop discussing the bank’s country strategy paper for Malawi covering the period 2013 to 2017.
The country strategy paper (CAS) is a basis for the bank’s support to its regional member countries, including Malawi.
“We, therefore, commended government for economic reforms it has undertaken such as the 49 percent devaluation of the currency and the subsequent exchange rate liberalisation…these actions have led to some visible benefits such as relieving the importation of fuel,” said Ojukwu who oversees AfDB operations in Malawi, Zambia, Angola, Mauritius, Mozambique, Sao Tome and Principe.
Ojukwu also cited other reforms such as the removal of controls on foreign currency transaction, interest rate adjustment to support devaluation and the instituting of an automatic fuel pricing mechanism as other measures he said will help spur economic recovery and sustained growth.
He also noted that the agreement on a new Extended Credit Facility (ECF) by the International Monetary Fund (IMF) will likely provide an impetus for donors to resume budgetary support to the country.
AfDB is one of Malawi’s donors that has already provided emergency budgetary support to cushion some of the adverse effects of the reforms and free government resources towards other sectors.
The bank has provided $40 million (about K10.7 billion) towards the restoration of fiscal stability and social support to Malawi, but the package was processed quickly to reflect Malawi’s urgent needs and to demonstrate the bank’s commitment in supporting the country’s reforms, according to Ojukwu.
“We are all aware, the road to recovery will not be easy and there is, therefore, need for patience,” he added.
Finance Minister Dr. Ken Lipenga said on Tuesday that government will ensure that it avoids macroeconomic slippages in the implementation of economic reforms.
