Despite Malawi President and his finance minister both giving hope on the recovery of the country’s economy, opposition People’s Party (PP) has cast doubt on the projected economic recovery.
Through his budget statement, minister responsible Goodall Gondwe said Malawi’s economy is likely to grow with good harvest and drop of inflation rate to be indicators of recovery for the economy.
Commenting on the budget statement in Parliament, PP spokesperson on finance Ralph Jooma said the country wrongly presented the indicators of projected economic growth arguing that a drop in world oil prices and proliferation of relief food has led to the decline in inflation.
“Mr Speaker Sir, for more than five years until recently our inflation rate has been in excess of 25%. Over the past 5 months we have seen it steadily plummeting and it now stands at around 14.5%.
“Mr Speaker Sir, indeed this could be a sign of macroeconomic rebound. However, what we are not sure of is whether a rebound of this nature can result into an economic recovery,” said Jooma.
He also reminded government that sustainable growth cannot be achieved if the fate of Malawi’s GDP is decided by weather conditions.
“If government continues to leave our economic growth to chance, they should not be surprised if others like us, sitting on this side of the House, become apprehensive about the predicted average growth rate of 7% per year for the coming 10 years,” he said.
Jooma then urged government to make sure that the country’s economic growth is inclusive and that income is fairly distributed.
“If at all, it should be growth achieved by growing the assets of the poor. Do not forget that from 2004 to 2010, our economy was growing at a very fast rate and yet the poverty rate remained as high as 56 per cent with half of them being chronically poor,” Jooma said.
He then encouraged government to invest big time in agriculture since the sector accounts for slightly above 30% of Malawi’s GDP and employs 85% of the workforce.
He proposed that government should find a way of nurturing and protecting farmers in the areas of pricing, market information, as well as freedom of commercialization.
According to Jooma, Malawi must also take its harvest into factories and add value to farm produce before exporting in order to earn substantial foreign currency.