Malawi Kwacha will soon stabilise, says Chilima

The Malawi Kwacha which has for a long time now been erratic and unsteady, will soon stabilise against devaluation and inflation rates while the cost of living will will be reduced, the Malawi Citizen Number Two, Saulos Chilima has said.

The country’s vibrant Vice President, Chilima, himself an economist and a marketer, who is popularly known as SKC in the political echelons, made the remarks Tuesday in his capacity as Minister of Economic Planning and Public Sector Reforms when he availed himself before Parliament to update legislators and to answer questions on public reforms implementation and the Malawi 2063 vision.

This is the second time that Chilima has made himself available to answer questions from members as he did the same earlier, in March 2021.

Responding to a supplementary question, Chilima assured Malawians that his ministry in conjunction with the Ministry of Finance and the Reserve Bank of Malawi are working tirelessly to stabilise the Kwacha devaluation, inflation and rising cost of living.

He said one of the measures undertaken by the central bank is to reduce the policy rate to make borrowing cheaper.

Chilima alluded to the fact that currently, Malawi is facing exchange rate challenges because there is a deficit between imports and exports (current account) around $800- $900 million.

The Veep said Malawi is a net importer of goods and services that requires more forex which is why the government is working to improve production and productivity for exports to reduce the current account deficit.

“Let me assure Malawians that we will be taking short to medium term painful measures that will better the situation soon. I can assure you that we are aware of the situation on the ground and we will not let the nation perish” said Chilima.

The cost of living in Malawi has skyrocketed to a record high with 90 percent of the population struggling to cope with daily living.

Before Chilima took the floor, opposition members defeated a motion for Parliament to start tackling questions pertaining to the Ministry of Economic Planning and Development and Public Sector Reforms to allow Chilima to leave but the MPs said they wanted to have more time to interact with the Veep.

Leader of Opposition and Mulanje Central legislator Kondwani Nankhumwa asked Chilima to update the August House on the following, how far government has gone with the Reform Agenda, whether the Public Reforms have already started bearing fruits, and how interlinked is the Reform Agenda with the Malawi 2063 Agenda.

In his response, Chilima assured the Leader of Opposition, the House and Malawians that the reforms program, which he is a lead, are on the right track and that they have already showing the good fruits and that the future looks promising.

“I can confidently say that the reforms are going on well and most of the institution these reforms are being effected, things are looking good for the future as the results are bearing fruits,” said Chilima.

This is the second time that Chilima has availed himself to Parliament. In March this year, Chilima also appeared before the august House to answer questions in Parliament.

The Government of Malawi has been implementing Public Service Reforms since the country’s independence in 1964; however, the implementation of reforms was problematic due to several factors.

These included inadequate commitment to reforms by political, administrative and technical leaders in the public service which led to partial implementation; lack of ownership of reforms since they were mostly externally driven; inadequate resources allocated for implementation of reforms; lack of a shared vision for reforms due inadequate participation of non-state actors and citizens in reforms; and lack of capacity to implement reforms.

In addition, there had been no overarching policy to guide the content and implementation of all public service reform programmes.

In 2006 the Public Sector Reforms Management Unit (PSRMU) was established within the Office of the President and Cabinet (OPC) to coordinate all Public Sector Reforms for the development of a modern and efficient Public Service.

PSRMU was mandated to provide strategic leadership on Public Sector Reforms, planning and management, and to develop the strategic linkages among various reform initiatives in the public sector and institutions that drive them.

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