The World Bank has urged Malawi to safeguard vulnerable citizens as the government implements tough fiscal reforms aimed at stabilizing the economy.
The call follows a visit to Malawi by the World Bank Vice President for Eastern and Southern Africa, Ndiame Diop, who met President Peter Mutharika and senior officials from the Ministry of Finance to discuss the country’s development vision and strategies for partnership.
In an interview with MIJ Online, Diop noted that Malawi is grappling with high inflation and a shortage of foreign exchange challenges that are negatively affecting economic growth, exports, and private sector activity.
He said the situation has also pushed up the cost of living, straining households across the country and stressed the need for strong measures to address the crisis but cautioned that such reforms may have negative effects on certain segments of society.
Meanwhile President Mutharika has expressed gratitude to the World Bank for its continued support, particularly the recent $45 million assistance toward food security.
He appealed for further collaboration in addressing what he described as the country’s “four Fs” food, fuel, fertilizer and foreign exchange.
Minister of Finance Joseph Mwanamvekha ruled out any plans to devalue the kwacha, saying the move would not resolve Malawi’s current economic challenges.
Mwanamvekha said the government is instead focusing on tightening fiscal discipline, including reducing public expenditure by senior government officials.
He noted that previous devaluations failed to address the underlying economic problems, stressing that Malawi should instead work to improve the balance between demand and supply while expanding its export base to strengthen foreign exchange reserves.