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12 NOVEMBER 2015

Our economic destiny is our choice. We have everything we

need to make Malawia great economy. What we need is an
optimal use and efficient allocation of what we have. But
first, we must believe in ourselves that we can do it! And
that if we cant do it, nobody will!
This is a critical time in the economic history of our
country. It is timely that we gather to put our thoughts
together to reshape our economic destiny. As Government,
we are set to take the right actions. And I am proud to
gather with you in this economic think-tank today.
Let me commend you for forming this professional
forum. I have noted that in your wise spirit, your approach is
to support Government. The spirit of this Conference says
it all. It says ECAMA is not a spectator critic of policy. You
mean to be part of our solution. I welcome your
professional and patriotic spirit. Together, we can arrest the
challenges confronting our nation. As our people say,
When spiders unite, they can tie up a lion.
Your choice of the theme of the conference:





Development for Sustainable Economic Growth

could not have been better.
Let me agree with you. Agriculture remains the
anchor of our economy for the moment. Let us make the
most out of it. Agriculture is the one economic sector in
which every Malawian can participate. We empower our
people by adding value to the produce of their labour. With
value addition, we are certain to turn Malawi into a
predominantly producing economy.
We are here, among other reasons, to exchange
policy positions and search for what unites us, not what
divides us even when we disagree. We must find common
ground on practical solutions to practical problems that our
people are going through every day.
Count this our turning point! We cannot allow our
people to continue suffering in poverty. We cannot allow
our economy to lag behind while everybody is rising.
At the moment, we have a delicate economic
situation. This year has particularly demonstrated how
fragile our economy is. We have a national budget that is








destabilizing the already fragile macroeconomic situation.

However, the economic situation is not worsening,
and must not be allowed to get worse. The fundamentals of
the economy are stronger today than they were 12 months
Certainly, headline inflation is high granted the 24.1
percent as at September 2015; yes, 1.1 percent higher than
the previous month. But, this is only 0.4percent higher than
the same period last year. If you look at the numbers
closely, on a year-on-year basis, it is the food inflation which
is hitting us so hard now.
However, in the past month, pressure has been
coming from non-food inflation. This rose by 1.4 percent as
a result of the continued depreciation of the Kwacha and
effects of unstable food prices. Of course the non-food
inflation shows that prices are rising much slower now at
21.3 percent as at September 2015 compared to the same
period last year which was 25.4 percent.But this still is not

good at all. We must aggressively push for our target on

single digit inflation.
Distinguished Ladies and Gentlemen
The exchange rate is another critical factor. The
Kwacha has depreciated against the US dollar by 24.55
percent in the first ten months of 2015. This compares with
a 5.2 percent appreciation in the same period last year.
But here is the paradox. We have more foreign
currency reserves now than at any other point last year, and
even before. Why has the Kwacha lost ground at a time it is
most cushioned by larger forex buffer?
We have good forex reserves. Our forex reserves
stood at $950.4 million as at 30 October this year. This
means we have 4.53 months of import cover. This is very
historic. So, what is going on here? Could it be that the
Kwacha fell due to excessive demand? Was it hit by
irresponsible speculative attacks? Could it be that traders
took advantage of perceptions of falling confidence levels in
the economy? Or, was the Kwacha only trying to reach its
true value and that it has now bottomed out? Sometimes,

things may seem to be falling apart when they are only falling
in their right place.
Either way, the good news is that the Kwacha has
started strengthening again. In September and October
2015, the Malawi Kwacha appreciated against all the major
currencies. These are all good signs.
Here are two points I am drawing from here;
Firstly, our economic reality is not as bad as its perception
wants us to believe. Yet, we are not economically in a
desirable situation. And let me use this moment to call upon
informed economists like you to portray economic realities
in a manner that inspires hope. A people who are made to
feel hopeless cannot move forward to drive an economy.
Self-doubt is always a reverse gear of progress.
Secondly, indeed we still have a fragile economy as
a result of a long history. We need to address this fragility
now and once for all. Our economy can hardly survive
major shocks .In the first quarter of this year, the economy
went through great shocks. Think of the devastating floods

and dry spells that destroyed a sizable part of our economy

and crippled the countrys main stay, agriculture.
We all remember how cashgate looted our public
funds. The billions that were stolen from government
crippled our ability to meet the rising expenditure needs.
When the government loses its ability to invest in public
goods and services, the economy suffers. People suffer!
Then, bring into the equation donor aid withdrawal. And this
was prompted by the climax of Cashgate in September 2013.
We are talking about losing a further 40 percent of the
National Budget that government would have directly
pumped into the economy. Is there any wonder the budget
deficit is high?
Should it really shock anybody that the economy will
only grow by three percent this year? Of course the
reduced real GDP growth is not peculiar to Malawi. The
same IMF has reduced global real GDP growth to 4.2%, down
from 4.6% projected earlier. Sub-Saharan Africas growth is
now projected at 3.7%, down from 4.4%.And literally so, all
our neighbouring countries growth projections have been

revised downwards too. The economic trends must never

be a source of complacency. Let us plan to swim against the
economic tide.
This situation should inspire you to table concrete
proposals. We need more than just general analysis of the
problems that face us. Be different. Offer me alternatives.
Offer me solutions. This economic think tank is too precious
to stop at colouring the problems. We are ready to do our
As government, we are taking assured measures to
get the economy growing again. We will bring back the IMFsupported programme. We are currently reviewing the
National Budget to make it respond to emerging challenges
and stimulate economic growth and development.
We have no choice but to keep pushing forward
peddles of the economy. And we are aggressively pursuing
the Public Sector Reforms, including those on Public Finance
Management. It is time to make the people trust their

But when all is said and done, we need to fortify the

backbone of this economy. Your focus on Agriculture is
accurate, precise and inspiring. That is exactly why I find his
gathering to be timely.
But this is my challenge to you! If this gathering of
economic minds cannot advise how best Agriculture must
respond to economic growth, nobody will! This is your call,
and duty to your country! My pledge is that I will listen. I am
a listening President.
Give me the right advice, and I will give you the right
decisions. Give us the best advice, and we will take the best
of the actions. In that collective spirit, Malawi cannot fail.
And we cannot fail Malawi.
Thank you for listening!
May God bless you all and bless our country.