The Economics Association of Malawi (Ecama) has urged the government and other stakeholders to be radical in resource mobilisation and its use to help fasten recovery of the economy from effects of the Covid pandemic.
Ecama, an umbrella body of economists in the country, is advocating effective and efficient use of available resources.
The call came during a panel discussion on how the pandemic has affected the economy on one of local online publications, iHub Online.
Speaking during the discussion, Ecama President Lauryn Nyasulu said the country, like most developing economies, had been hit hard by the pandemic, stifling chances of sustainable growth.
“It is important that we think of how we can sail through and ensure that, with the little resources we have, we are able to utilise them and pull out of this situation,” she said.
The Reserve Bank of Malawi recently said Malawi’s economic growth prospects for 2021 remain uncertain, mainly due to the second wave of Covid.
Capital Hill had predicted that the local economy could swell by 4.5 percent in 2020, up from 1.2 percent in 2020.
The Economist Intelligence Unit has revised downwards its projection for Malawi’s economic growth from 4.7 percent to 2.1 percent in 2021.
According to Nico Asset Managers 2020 Economic Report, the revision has been necessitated in anticipation of the impact that coronavirus will have on the economy.
Recently, the Treasury has been seen to be borrowing heavily from the local market to balance the national budget.
In January alone this year, government borrowed K89.43 billion as applications increased by 122.51 percent from K40.19 billion in December last year.
Commenting, one of the panelists during the discussion, economics lecturer at the Chancellor College Jacob Mazalale, said domestic borrowing might have been a main remedy in the interim.
“It is a question of: Are there alternative cheaper means and we will find out that we do not have them. Because of the pandemic, the little that we have has even minimised further,” Mzalale said.
Despite a robust performance in the first half of 2020 owing to a strong harvest and substantial government spending, economic activity in the second half of 2020 suffered from a further deterioration of the global economic outlook, resulting in substantially lower exports, a worsening economic impact of the Covid pandemic and a longer persistence of the shock.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.