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    WORLD BANK HAPPY WITH MALAWI RECENT ECONOMIC AFFAIRS

    Malawi’s economic recovery agenda is on the right track, this according to World Bank officials who were in the country last week to engage government officials on a number of pertinent issues.

    Last week, the Minister of Finance and Economic Affairs Simplex Chithyola Banda met with World Bank Regional Director for Macro, Equity and Institutions for Africa East and South, Hassan Zaman, in Lilongwe.

    The objective of the meeting was to jointly take stock of the recent macroeconomic adjustments instituted by the government and to discuss how the World Bank can continue to work with the government to support its most important structural reforms to unlock private investment and growth.

    “The objective of our coming was to meet the authorities to take stock of the recent macroeconomic adjustments instituted by the government and to discuss how the World Bank can continue to work with the government to support its most important structural reforms to unlock private investment and growth,” said Zaman.

    Zaman advised the Malawi Government to strive to close the gap between the official and parallel exchange rate to foster the gains accrued from the International Monetary Fund (IMF) Extended Credit Facility (ECF) that the country qualified for recently.

    In the course of their deliberations, the World Bank expressed satisfaction with Malawi Government for achieving incredible economic results in the last three months despite concerns on macroeconomic stability and expenditure-side controls. The bank also revealed that it is fully committed to supporting the Ministry of Finance and Economic Affairs with financial management capacity building.

    On his part, Chithyola Banda said the country is in a defining moment where qualification for the IMF Extended Credit Facility has triggered huge economic expectations from Malawians. Chithyola also attributed the slothful economic growth to the massive economic malady the country has experienced for long.

    “The sluggish economic growth projected at 3.3 percent by the IMF team is as a result of the huge economic malaise and damage that has characterised the economy for so long.  We are working on diversifying the economy through mega farms enhancement, labour export, mining discounted projects, among other measures,” Chithyola noted.

    The minister also assured the World Bank of his Ministry’s commitment towards adherence to the strict fiscal discipline and reducing the domestic debt as duly advised by the World Bank.

    Malawi’s per capita economic growth has been insufficient to reduce high and stubborn rates of poverty, according to the latest World Bank Country Economic Memorandum (CEM). The report argues that the pathway to achieve Malawi 2063, while achievable, is increasingly narrow and requires a fundamental shift in policy.

    “Malawi’s current crisis offers an opportunity to rethink and reboot. Declining aid flows, rising global fragmentation, and the increasing frequency of climate-related disasters all mean that countries need to aim for resilient and inclusive growth; the cost of inaction is high. While the policy prescriptions are known, implementation and results are elusive. Our CEM seeks to explore not only the “what” but also the “how” of these reforms, based on case studies of Malawi’s own successes,” said Hugh Riddell, World Bank Country Manager for Malawi.

    The Ministry of Finance notes that the CEM outlines a comprehensive reform agenda focused on restoring macroeconomic stability; deepening private sector led commercial agriculture and reducing barriers to trade and investment. The CEM also draws lessons from case studies of success in Malawi’s recent history (high growth macadamia and soybean value chains, well-performing State-Owned Enterprises like the Lilongwe Water Board and the Roads Fund Administration, and effective public programs such as the HIV/AIDS response) to explore what are the critical factors that can ensure Malawi moves from vision to action.

    “While Malawi has made significant strides in many areas of human development including increasing the life expectancy by over 20 years since 1990, the country is at a critical juncture in its development journey as it enters the seventh decade since independence. We therefore have taken difficult but important decisions to stabilize the macroeconomic foundations and we welcome the timely release of the World Bank CEM at this time where the need to re-strategize and adopt new modes of development including drawing lessons from the past successes is very necessary,” Simplex Chithyola Banda, M.P Minister of Finance and Economic Affairs said.

    In January 2021, the government launched the Malawi 2063 Vision that aims to transform Malawi into a wealthy, self-reliant, industrialized upper-middle-income country, through a focus on agriculture commercialization, industrialization, and urbanization. The first 10-year implementation plan anchors the World Bank’s Country Partnership Framework (CPF) FY21- FY25.

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