Accountants demand caution on economic gains

Post was last updated: September 25, 2018

BY WILLIAM KUMWEMBE:

CHOWAWA — Our microeconomic fundamentals are the litmus test

Amid registered improvements in some key microeconomic fundamentals, the government and stakeholders should exercise extra caution for fear of slacking.

This was the general view of panelists and speakers during the 2018 Institute of Chartered Accountants in Malawi (Icam) Annual Lake Conference in Mangochi held under the theme ‘Towards Achieving Sustainable Economic Gains – The Malawi Approach’.

Malawi has in the recent past registered improvements in key microeconomic fundamentals, with inflation grinding to a single digit for the first time in over five years, import cover rising above three months and the kwacha exchange rate remaining fairly stable.

However, Malawi is ranked the sixth poorest country in the world, ahead of the Central Africa Republic, Burundi, the Democratic Republic of Congo, Liberia and Niger.

On Corruption Perception Index, Malawi is ranked 122 out of 180 compared to 45 out of 85 in 1998.

And on Ease of Doing Business, Malawi is ranked 110 out of 190 economies compared to 131 in 2008.

Speaking when opening the indaba on Thursday, outgoing Icam president, Henry Chowawa, said the economy is still facing numerous risks that needed attention.

He said Malawians have not seen much of the positive impact of the registered gains, hence the need to actively participate in improving production activities.

“On the other hand, a non-economist like me wonders why these trends appear to take long to reflect improved life for the ordinary man. Are we probably using irrelevant and outdated elements in our statistical analysis?”

“Our microeconomic fundamentals are the litmus test for attracting investors but no investor can come into a country where power is erratic,” Chowawa said.

He said, for Malawi to be on the right trajectory of its dream, the nation must urgently sort out the energy crisis which has crippled operations of most businesses.

In an interview on the sidelines, Chief Executive Officer for the Zambia Institute of Chartered Accountants, Hapenga Kabeta, who chaired a plenary session, said the road to development was not standard as Malawi is in a peculiar situation where most of the economic fundamentals are not adding up.

“The agenda for development is an urgent one for Malawi. When the performance of the economy is not too good, every small gain made is celebrated. But, please take note—there are no prizes for being second best.

“The gains are important but there is a lot that requires to be done. If you do the same thing and expect a deferent result, then something is wrong,” Kabeta said.

Minister of Industry and Trade, Henry Mussa, who graced the conference, conceded that the economy was still facing some challenges, including energy woes.

He said the government is working towards addressing the challenges so that Malawi sustains the pace for economy growth.

“We really have to claim ownership of our nation in as far as management of resources is concerned. Any successful venture is attained if we have qualified and committed professionals,” Mussa said.

This year’s Icam conference attracted over 800 accountants from the country and abroad.

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