The World Bank has said Malawi still has potential to rejuvenate her economy only if it uses systematically the financial support trickling in from development partners.
After an International Monetary Fund (IMF) Executive Board approved a four-year $174 million Extended Credit Facility (ECF) programme for Malawi on November 15, development partners are unlocking support to Malawi with some promising direct budget support.
For instance, last week the World Bank Board of Executive Directors approved a $60 million (about K102 billion) grant which will help commercial banks in Malawi to have access to an import backstopping facility from the International Development Association.
Speaking on Wednesday during an interaction with the Ministry of Trade and Industry officials and local manufacturers and exporters, World Bank Country Manager Hugh Riddell the country is expected to capitalise on the support in enhancing exports in the medium to long term.
Riddell said Malawi has numerous opportunities to exploit and if well managed, and with the recently approved ECF from the IMF, the country could help bring stability to the economy.
He is of the view that high value chains such as macadamia, industrial hemp, ethanol, and mining (minerals like rutile, graphite, rare earth) need targeted support because of their high potential to broaden the export basket and expand forex streams.
“Going into the immediate to medium terms, exports have the potential to drive growth, but Malawi must break the dysfunctional cycle in which chronic trade imbalances and restrictive trade policies reinforce each other,” he said.
He affirmed the World Bank’s commitment to continue supporting Malawi in its quest to grow the economy and increase exports while narrowing the country’s trade balance.
Minister of Trade and Industry Sosten Gwengwe said the government has made strides in creating an enabling environment for the private sector to thrive and expand its exports base.
Gwengwe cited achievements such as advancements in establishment of Special Economic Zones, reduction of energy challenges, improved availability of foreign exchange and improvement of trade facilitation between Malawi and other countries.
“I as your minister will do everything possible to make sure that this sector is well supported in terms of proper regulatory framework as well as incentives aimed at expanding your business operations,” Gwengwe said.