Shrinking incomes threaten Malawi recovery

European Union (EU) Ambassador Alexander Baum has said shrinking incomes in people’s pockets threaten economic recovery efforts government is implementing but stressed the economic reforms need to be sustained if the country is to move out of the economic turmoil it has been going through.

Speaking in Malawi’s capital, Lilongwe during commemoration of the Europe Day, Baum also said development partners’ solidarity to help in Malawi’s economic recovery path cannot go without conditions to ensure the country adopts right policies and decisions.

“Many of the issues Malawi is currently struggling with seem to be somewhat similar to what we experience in Europe. The way to recovery is longer than expected and there are now signs of recovery but there are some clouds over whether the necessary reforms can be politically sustained in light of shrinking real incomes and unemployment of the youth.

“I could go one step further and say that solidarity comes not entirely without conditions as to the determination of the country to help itself by adopting the right policies and take the right decisions,” said Baum.

He said while the EU has provided 115 million euros (about K58 billion) support to Malawi during the current fiscal year, support from all donors in Europe including United Kingdom, Germany and Ireland has amounted to almost 350 million euros (about K177 billion) during the period.

“Malawi is facing tremendous development challenges with many systemic bottlenecks that will take time to tackle. Our partnership and friendship is long-term and not crisis driven. However, the most valuable part of our partnership is dialogue, exchange of ideas and mutual inspirations.

“I wished our debates and more so the debate among Malawians themselves could be more intense and perhaps more constructive. While it is inevitable that economic policies are disputed in times of adjustment, it is crucial that the fundamentals of the development path are accepted and sustained over consecutive government cycles,” Baum said.

He said next year’s tripartite elections will be a test and significant challenge for Malawi’s democracy, hence EU hopes the elections will be fair and credible to ensure the country moves on.

Minister of Finance Dr. Ken Lipenga said the EU is a key development partner in sectors of transport, governance and agriculture.

“We are not saying we have reached a perfect society. We still have a long way to go.”