Finance Minister Goodall Gondwe yesterday revealed in Parliament government’s plans to solve the economic problems that have affected the country, hitting back at critics who criticised Malawi President Peter Mutharika for being clueless.
Presenting the 2015/2016 Mid-Year Budget Review Statement in the National Assembly, Gondwe revealed a four point plan of action that government will do in order to do away with the current economic malaise.
As part of the plan, Gondwe said government is hoping many farmers have grown leguminous crops such as beans, peas, and groundnuts because these crops will fetch good prices when they are exported hence increasing foreign exchange for the country, which will result in the appreciation of the Kwacha.
Another main point in the plan is aimed at ending the maize crisis which the finance minister claimed is already “under control.” Gondwe said government is relying on donations to increase supply of humanitarian food and supplement the maize ADMARC is buying.
“Just yesterday some 44 large trucks full of maize crossed our borders into Malawi. Treasury has empowered ADMARC to procure another large consignment of 50,000 metric tons of maize from Tanzania. As we see it, we have and will have enough maize in stock that will be more than enough to satisfy ADMARC markets in the coming days,” said Gondwe.
The finance minister also revealed that the Peter Mutharika administration will turn to irrigation in order surmount food shortage that comes due to unfavourable climatic conditions. To achieve this, Gondwe said government will rehabilitate irrigation schemes, provide large tracks of irrigable land, provide infrastructure to farmers and convince large estates to produce irrigated food crops which government will buy and then sell to Malawians at subsidised prices.
“These initiatives should be enough to improve Malawi’s capacity to address the problem of food shortages in the short and medium term. The measures will also improve prospects of our balance of payments position and to bring about low inflation and interest rates and to stabilise the exchange rate even in the face of poor weather conditions should they recur in Malawi during the coming seasons,” he said.
As a way of resuscitating the economy, government has also embarked on a radical fiscal adjustment aimed at using only domestic resources in the recurrent budget. The Mutharika administration hopes this move will eliminate domestic borrowing that that fuels inflationary pressures.
The minister of finance said government is encouraged by the fact that it has managed to reduce domestic borrowing from K78 billion at the end of the last half of the 2014/15 fiscal year to K4.3 billion at the end of the first half of 2015/16 financial year.
Gondwe said: “a sustained reduction of domestic borrowing could also resuscitate private sector confidence in the economy and could be a factor in the quest for the resumption of acceptable and robust growth rates and our ability to create high employment levels.”
The finance minister however acknowledged that doubts may still persist among Malawians on the current administration’s ability to solve the current economic crisis but he assured them that government is prepared to take extraordinary measures if what it has set out to do is not achieving results.