Malawi's Economy on the Right Track, Says President Chakwera

By Michael Martin//MALAWI

President Lazarus Chakwera has expressed optimism about Malawi’s economic prospects, despite facing numerous challenges such as cholera outbreaks and natural disasters.

The president made these remarks during a parliamentary session in Lilongwe yesterday, where he addressed questions from Members of Parliament.

President Chakwera highlighted the resumption of direct budgetary support as evidence of progress, citing the International Monetary Fund’s (IMF) Extended Credit Facility (ECF) program.

He assured the nation that the government has regained donor confidence, contrary to opposition claims.

The president addressed concerns about the IMF program being off track, stating that spending is within legal and IMF program parameters.

He revealed that the government is consulting with the IMF to address anomalies that may be hindering the program.

President Chakwera defended his administration’s economic performance, arguing that the country has managed to stay afloat despite various setbacks.

He emphasized that borrowing will continue within set limits to ensure the provision of essential services to the public.

Leader of Opposition Dr. George Chaponda questioned the president about excessive borrowing and wasteful spending.

Chaponda also raised concerns about the president’s frequent foreign trips, citing their impact on inflation and national debt.

President Chakwera countered that most of his trips were important to the nation and funded by the organizers. He dismissed Chaponda’s economic critique as “half-baked.”

Malawi’s public debt stands at K7.9 trillion as of December 2022, with K4.43 trillion domestic debt and K3.47 trillion external debt.

The IMF has emphasized the need for Malawi to address its unsustainable public debt to mitigate balance of payments problems.

A joint World Bank-IMF debt sustainability analysis conducted in November 2021 assessed Malawi’s public and external debt as unsustainable over the medium term.

The report recommended policy adjustments to address macroeconomic imbalances and upfront actions to return to moderate risk of debt distress with a sustainable path.

The government has been engaging its creditors to restructure the country’s debt into a sustainable path. During the China-Africa Economic and Trade Expo, President Chakwera appealed to China to consider restructuring Malawi’s debt.

The World Bank has been supporting Malawi through various programs, including the Governance to Enable Service Delivery Project (GESD) and the Digital Malawi Program Phase I: Malawi Digital Foundations Project (DIGMAP).

These projects aim to strengthen local government institutions, increase access to affordable internet services, and promote digital skills among youth.