Chilima tells economists to find solutions to economic shocks
Malawi Vice President Dr. Saulos Klaus Chilima says economists in the country should explore practical solutions to defend the country’s economy from shocks such as cyclones which negatively impact on the economy.
He says the unpredictable negatively impact on livelihoods of Malawians.
Speaking in Mangochi during the opening of the two-day Economics Association of Malawi (ECAMA) Annual Economic Conference, Chilima said shocks such as adverse weather conditions, health crises, and commodity price fluctuations worsened by adverse global economic trends have hindered development progress of Malawi.
Chilima said the exogenous shocks pose challenges to the country’s growth aspirations as the need for emergency response and rehabilitation efforts divert resources from development.
“We have witnessed how negative external shocks to the economy can create much instability and can lead to persistent periods of weaker economic growth, higher unemployment, falling real income and rising poverty.
For instance, the 2023 Tropical Cyclone Freddy post-disaster needs assessment report shows that the total damages caused by Cyclone Freddy have had tremendous economic losses. The damages by the disaster are estimated at US$ 0.5 billion while total recovery for physical needs will require US$ 0.68 billion,” added Chilima.
He therefore asked experts at the conference to provide innovative strategies that should increase resilience to unpredictable shocks, for the country to advance in development.
“In fact, the 2022 World Bank Country Climate and Development Report estimates that without significant investments in adaptation, the impacts of climate change will lead to GDP losses of 3 to 9 per cent in 2030 and 6 to 20 per cent in 2040.
“Therefore, this conference should be a platform for in-depth policy-relevant discussion on innovative strategies aimed at fostering sustainable growth,” he said.
Chilima added, “The theme for this year, ‘fortifying economic growth from shocks’, is a loud and clear message of our unanimous resolve to build defences around our economy without any delays. By any means, the theme is telling us of a crisis requiring urgent attention and solutions. Solutions not just from the government but from all stakeholder groups.”
In her remarks, President for ECAMA Lauren Nyasulu emphasized the need for the country to focus on investing in production, to ensure that the country can export more.
“For us to improve our economy amidst the shocks, we need to focus on building resilience to shocks, by among others restructuring our economy base through investing in production.
However, we also need to provide robust market structures for our products both internally and externally,” she said before about 150 delegates that attended the conference.
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