The Democratic Progressive Party (DPP) spokesperson on economic affairs Joseph Mwanamvekha has described the current economic turmoil in the country as the same as living in hell.
Responding to the budget in Parliament on Monday, Mwanamvekha who was minister of finance in the DPP-led government described the Tonse Alliance administration’s 2024/25 national budget as hypocritical and deceitful and that it was “dead on arrival”.
“Living in Malawi is like living in hell. With the two major currency devaluations which put the Kwacha at K 1,700/US$ on the official market and K 2,400/US$ on the parallel market; inflation at 35 percent; the policy rate at 26% coupled with foreign currency shortages and Government debt hitting as high as K 12.56 trillion. Life has become unbearable.
“Madam Speaker, millions of Malawians out there are disappointed with the way the economy is being managed by MCP and its Tonse partners. The Tonse Government is punishing the very people that voted them into government. These people had hope for a better Malawi; but instead of realizing that hope, they are now contending with high prices of goods and services.
“They are looking forward to solutions that can lift them from poverty and hunger, which is biting very hard. Therefore, this response to the Budget Statement, Madam Speaker, will take an honest approach in pointing out budget areas that are not well thought-out; and offer workable solutions towards a people-centred budget” he said
Mwanamvekha said the projections that the Malawi economy will by 3.6 percent in 2024 and 4.8 percent in 2025 is unrealistic and overly optimistic.
He said the country’s crop production will be reduced significantly and the number of food-insecure households will increase because the current rainy season has been influenced by El NINO such that there has been a delay in the start of the rainy season and most parts of the country have experienced severe dry spells mainly in the southern region, lakeshore areas and in Karonga.
The former finance minister further said according to the January 2024 World Economic Outlook (WEO), global economic growth is projected at 3.1 percent in 2024 and 3.2 percent in 2025, in emerging and developing economies, respectively.
“Madam Speaker, it is therefore unrealistic and overly optimistic to believe that Malawi will be an exception, especially considering that most companies in Malawi are scaling down production due to falling domestic demand – caused by dwindling disposable income.
“It is overly optimistic Madam Speaker, to believe that the Malawi economy will grow as projected despite the prevailing high interest rates. Which companies (both manufacturing and trading) are going to borrow at those high rates, Madam Speaker?
“The prevailing shortage of foreign exchange will continue to weigh down economic activities in the manufacturing and trading sectors such that even though there is a slight improvement in the availability of foreign exchange, most of the manufacturing companies and traders will continue to face difficulties in accessing foreign exchange because of an increase in foreign exchange demand emanating from elections-related imports,” he said
“Furthermore”, said Mwanamvekha “it is important to note, Madam Speaker, that the Geo-political tension in the Middle East is still continuing and this will negatively affect the global supply chain logistics which may also affect the price and importation of the country’s critical imports such as pharmaceuticals, fuel and fertilizer for the next crop growing season.
“Madam Speaker, if you sum up all the foregoing developments, it is unrealistic to make us believe that the country’s economy will grow by 3.6 percent in 2024, let alone 4.8 percent in 2025”.
He further said this government has been implementing austerity measures that are inconsistent and hypocritical.
“In 2022, the State President announced a series of austerity measures including unnecessary local and foreign travel; however, it is disappointing that it was the President himself and top government officials who were the first to break the austerity measures, by engaging in unnecessary extensive local and international travel.
“I would like to conclude by saying that the 2024-2025 budget is hypocritical and deceitful. It is a sham. As alluded to above, it is over-ambitious and unrealistic as most of the targets and assumptions will not be achieved. The budget contains a lot of contradictions. fiscal and monetary inconsistencies and it is a ticking bomb waiting to explode,” said Mwanamvekha
