IS MALAWI ECONOMY RECOVERING?

It is now one full year since Joyce Banda started ruling following the sudden death of the former President Bingu wa Muntharika. Then the economy was shrinking following tightly managed monetary policies that led to influx of imports on the local market and scarcity of locally produced products because most companies either scaled down production or closed production facilities. The raw materials and fuel were had to get because enough forex for raw materials and fuel was acutely scarce. Foreign exchanged almost dried up! Key donor partners and IMF stopped supporting the Muntharika a

JB's administration came up with economic recovery measures: kwacha devaluation, floatation and floating fuel price, yes and an insignificant safety nets. The other administrative measures were to repair relations with the donor partners and foreign governments with which the relationship were strained, as well as complying with the IMF fiscal management dosage.

Today, 12 month later, after much pain and sweat, finger pointing and much wider criticism, the economic activities are gliding forward and upwards though at slow pace. On the negative side Kwacha value is deeply low such that earnings particularly salaries have been trimmed to pulp and workers can hardly buy their basic needs, prices are daily rising and importers are facing foreign exchange losses in international transactions. However, on the positive side, the horizon is promising: foreign exchange and fuel are available and  the private sector is active, slowly rising. Development partners are supporting government as much as they are able to do so. Investors are coming into the country with much hope.Imports have slowed pace. Public capital projects have been reactivated.

Economically I feel the administration has done better of course with some more gaps to be filled. Politically the measures have been dangerous because they have made people poorer by reducing the value of their disposable income.In the short term, political solutions may be provided but need careful handling to avoid disrupting the positive progress. This is where wisdom and intelligence ought to bridge and work as a pair!