The Economics Association of Malawi (ECAMA) President Betchani Tchereni has come out very clear that as a nation, we have collectively brought Malawi economy where it is today because of our negligence and love for politics over production.
Tchereni was speaking this during an Exclusive Interview with Times Tv’s Briand Banda yesterday. According to Tchereni, Malawi is in the current 44% devaluation because there has been high inflation rate and a wider gap of the exchange rate between that of the Bank and that on the parrel market. The import cover was also very low so much so that there nothing that could be done other than devaluing the Kwacha.
According to the ECAMA boss, Malawi forgot the responsibility it ought to have following the structured programmes of the Bretton Woods institutions so much so that the country became a dependent economy.
“Then President [Muluzi] in 1994 was even ‘bragging’ that we are a poor country and we need to be assisted hence why we beg” said Tchereni. According to the top economist, this was bad because we needed to start manufacturing. Muluzi neglected the economy because he was more into governance issues.
Tchereni also said that economists came together in the country and found that it was difficult for our people to access farm inputs which was expensive for the farmers and hence the idea of subsidy programme was hatched. The country started taking a lot of loans and incurring a lot of debts though luckily the loans were forgiven in 2006.
Thereafter, Malawi continued borrowing more and more loans which they were using for nothing other than buying expensive and luxurious vehicles. During Bingu time, he said ‘ as long as he was president, there would be no devaluation’
The ECAMA President further said that the economic mess we are in should also heavily be blamed on the Members of Parliament, for passing zero deficit budget.
Talking about macro-economics, the ECAMA boss said there are main three issues that they play around with and these are inflation rate, interest rate, exchange rate and of course growth rate. He said these first three elements are related in that an effect in one affects the other.
In our Malawian context, he observed that the problem has been that of exchange rate so much so that bringing stability in exchange rate may also stabilise the other factors.
On devaluation, Tchereni said we are but only dealing with the symptoms of problem and not the cause of the problem saying devaluation is but just a relief and not the healer.
To stabilise the Malawi economy, Malawians should learn to produce commodities so we can move from an importing nation to an exporting nation. Perhaps the government have kickstarted this journey with the emergence of Mega Farms in the country.
