By: Happy Soko
A political analyst has punched holes in Economic Association of Malawi (ECAMA) by criticizing it for failure to provide crucial solutions to the current economic state of the country.
In an interview with Malawi Star, Loudan Malingamoyo Phiri said it is unfortunate that for the past years the economic body has not provided the needed mechanism to the end the economic disaster.
But according to statistics by ECAMA President Henry Kachaje, the exchange movement rate against the US Dollar under the two year leadership of Joyce Banda was 163.59 to 449.22, representing a 175% devaluation. Whereas during the 2 years of President Peter Mutharika, exchange rate movement against the US Dollar is from 449.22 to 771.34, representing only a 72% devaluation.
“It is very unfortunate that ECAMA is doing nothing in Malawi. It’s just making noise and not providing solutions to Malawians. The organization is supposed to be a think tank for Malawi and come up with ideas to what should be done. It’s useless and Malawians doesn’t need this organization as of now, it’s not functional,” hinted Phiri.
In order for there to be the promised better days for the country, Phiri added that steps must be taken by the President through the various ministries. He pointed out that the country’s economy is going down and the inflation rate is increasing, causing the vast majority of Malawians to live in abject poverty. He added that the previous government made an error in devaluating the Kwacha while at the same time allowing it to float.
“The problem the country is having is that the previous government devalued the kwacha and floats it at the same time. Our former leader Joyce Banda did two things at once; she devalued it and made it float.”
“You don’t devalue the kwacha and at same time float it. That’s making it flexible to go as far as it can go depending on the current situation of the economy. Bingu Wa Mutharika refused to devalue the kwacha but rather demanded mechanisms be put in place so that poor people were not hurt after devaluing it. The current leader has not caused damage to the kwacha because the problem began long time ago. The problem with the President is not summoning the technocrat to actually ask advice,” he further explained.
However, Chancellor College Economics Professor Ben Kalua said the problems will end depending on whether President Peter Mutharika takes the advise. Kalua said the country must have a long term solution.
Explained Kalua in a Telephone interview with The Malawi Star, “The president has been ignorant to the advice forgetting he is the one driving the country. Malawi economy can be diversified out of agriculture and moving away from traditional crops. Malawi has very weak production and productivity although the country heavily depends on smallholder farmers.”
Last year the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) asked the government to employ measures aimed at incentivising production to bridge the gap between production and imports to ensure that the inflation rate is tamed to acceptable levels.
So far, this doesn’t seem to have happened and how far the Kwacha will fall is anyone’s guess.