President Lazarus Chakwera recently convened a gathering of business leaders for an exclusive dinner at Sanjika Place in Blantyre, where he issued a compelling call to action for the private sector to collaboratively contribute to the development of Malawi’s economy.
In his address to the assembled business captains, President Chakwera urged them to break free from conventional thinking and proactively provide tangible solutions to the economic challenges facing the nation.
“Break those boxes,” he emphasized, expressing his desire for innovative strategies to address Malawi’s economic issues. He emphasized the need for a transformative mindset as the way forward.
Acknowledging the business community’s critical role, Lekani Katandula, President of the Malawi Confederation Chambers of Commerce and Industry (MCCCI), commended the government for its recent robust and decisive economic policies. According to Katandula, the government’s decision to devalue the local currency, the Kwacha, by 44 percent against major international currencies, particularly the United States Dollar, has already yielded significant economic benefits.
“I applaud you, His Excellency, for taking such a bold decision. As a result, we immediately qualified for an Extended Credit Facility (ECF), and we have also seen the resumption of direct budget support,” stated Katandula, emphasizing the positive impact of the devaluation.
The devaluation, implemented on November 8, 2023, triggered mixed reactions within the public sphere but garnered praise from the donor community, including the International Monetary Fund (IMF). The IMF promptly granted Malawi a new four-year ECF worth USD174 million, while other donors, such as the World Bank, announced additional foreign exchange injections, marking the first direct budget support since 2017.
Katandula acknowledged the challenges posed by the current foreign exchange situation, noting the private sector’s substantial backlog of foreign exchange due to heightened demand. He revealed that, in response to the devaluation, the private sector is adopting a cautious stance, refraining from significant increases in remuneration bills to mitigate potential inflationary pressures.
Highlighting the lingering effects of external shocks on the economy, including the devastating impacts of Cyclone Freddy, the war in Ukraine, and previous tropical storms, Katandula expressed optimism that the country is now on the right trajectory, despite the ongoing challenges.
In a separate statement, Kwenele Ngwenya, Chief Executive Officer of NBS Bank, the event sponsor, emphasized the pivotal role of the business community, including banks, in the nation’s economic development. He lauded the Reserve Bank of Malawi (RBM) for creating a conducive environment and stressed the private sector’s responsibility to innovate business models for generating more foreign exchange.
As Malawi strives for economic recovery and resilience, President Chakwera’s call for collaboration and innovation resonates as a pivotal step towards fostering sustainable growth and prosperity. The private sector’s commitment to navigating challenges and seizing opportunities will undoubtedly play a crucial role in shaping the country’s economic future.