Rédaction Africa Links 24 with Malawi Voice
Published on 2024-03-11 15:00:46
Democratic Progressive Party-DPP Spokesperson on Budget and Finance, Joseph Mwanamveka, recently expressed his concerns about the economic growth projections for the year 2024/25 in Malawi. In response to the Budget Statement presented by Minister of Finance, Simplex Chithyola Banda, Mwanamveka criticized the projected 3.2 percent and 4.8 percent economic growth, deeming them unrealistic given the current economic hardships facing the country.
Minister Chithyola Banda had attributed the projected growth to various factors such as large-scale mega-farm output and anticipated growth in construction, manufacturing, information and communication, as well as accommodation and food services. However, Mwanamveka, the former finance minister, disagreed with these projections, citing a decrease in domestic demand among companies leading to scaling down production due to falling disposable incomes.
He mentioned the prevailing high interest rates in the country and questioned the feasibility of companies, both in manufacturing and trading, borrowing at such rates. Mwanamveka also highlighted the shortage of foreign exchange in the country, which he believed would continue to impact economic activities in manufacturing and trading sectors. He anticipated that the demand for foreign exchange would increase in the short to medium term due to imports related to the upcoming general election in September 2025.
Describing the budget as ‘Hypocritical and Deceitful’ and dubbing life in Malawi as akin to “living in hell,” Mwanamveka painted a grim picture of the economic situation. With the Kwacha devalued at K 1,700/US$ on the official market and K 2,400/US$ on the parallel market, alongside an inflation rate at 35 percent and a policy rate at 26%, he emphasized the challenges faced by the populace.
The 2024/25 National Budget, amounting to K5.98 trillion, primarily allocated funds to the sectors of Health, Education, and Agriculture. However, Mwanamveka’s critique underscored the grim reality of the economic and financial landscape in Malawi, pointing out the challenges posed by high interest rates, foreign exchange shortages, and significant government debt nearing K 12.56 trillion.
In conclusion, Joseph Mwanamveka’s skepticism about the economic growth projections for 2024/25 sheds light on the harsh realities faced by Malawians in the current economic climate. The concerns raised regarding high interest rates, foreign exchange shortages, and unsustainable levels of government debt highlight the urgent need for comprehensive economic reforms to address these challenges and pave the way for sustainable growth and development in the country.
Read the original article on Malawi Voice
