from MAVHUTO BANDA in Lilongwe, Malawi
Malawi Bureau
LILONGWE, (CAJ News) – MALAWI’S economic recovery remains fragile due to lagging implementation of macroeconomic reforms and a series of external shocks impacting the country.
This is according to the latest World Bank Malawi Economic Monitor (MEM).
The report indicates that economic instability is also hindering Malawi from taking advantage of its significant potential to achieve higher rates of growth and support sustainable development.
Firas Raad, World Bank Country Manager for Malawi, noted that macroeconomic stability is a foundational pre-condition for economic recovery and longer-term prosperity.
The official said stabilizing public finances, building up foreign exchange reserves, and achieving debt sustainability will create the necessary conditions for attracting private investment and enabling the success of the government’s Agriculture, Tourism and Mining (ATM) Strategy.
“Without undertaking serious reform actions now, the pain of the eventual economic adjustment and the risks of further destabilization will only continue to grow,” Raad said.
This 20th edition of MEM, entitled “The Rising Cost of Inaction”, notes that after a series of bold reform measures in 2023, supported by an International Monetary Fund (IMF) Extended Credit Facility (ECF) and direct budget support from development partners, momentum towards addressing the country’s underlying fiscal and external deficits dissipated.
These structural imbalances were further compounded by continued overspending and debt accumulation resulting in greater macroeconomic instability and limiting the space for productive investment.
Prospects however are bright.
The World Bank projects that between 2026 and 2040, the mining sector could generate a total of US$30 billion in exports, with annual exports reaching $3 billion by 2034, and remain broadly stable over the life of mines.
– CAJ News