LILONGWE, March 9, 2012 – Following an agreement between the World Bank Vice President for Africa Ms. Obiageli Ezekwesili and President Bingu wa Mutharika at the African Union summit last month, a high level World Bank team visited Malawi to consult and present a comprehensive package to address the current economic challenges in the country.
At the end of the mission, the team had a meeting with a high level Government economic team where the Bank presented a comprehensive economic support package to address the immediate challenges facing the country while protecting the most vulnerable and creating an environment for a quick economic rebound, more jobs, and adequate attention for the medium term development agenda for Malawi. The Bank team also presented its analysis on the sustainability of the current situation and what could happen if nothing is done quickly.
“The Comprehensive Package” is anchored on four pillars: (i) Regaining macro balance, (ii) social impact and mitigation, (iii) Growth rebound – including where growth and jobs would come from, and (iv) the medium term agenda for productivity and diversification.
“Malawi’s problems will not be solved through one isolated action. That is why we are proposing a comprehensive package to help the country regain its macro-balance and rebound to previous growth levels while taking measures to protect the poorest,” said Mr. Marcelo Giugale who is the Africa Region’s Director of Poverty Reduction and Economic Management.
Sectors that can help spur Malawi’s growth include manufacturing, tourism, agriculture, and transport. The Bank envisages that confidence and credit markets would recover along with foreign direct investment and regional trade within a reasonable time of restoring the macro-balance. In the medium-term, Malawi’s agenda should include accelerating implementation of its national agriculture reform program, export diversification, and critical infrastructure investments such as power and irrigation.
The World Bank team emphasized that Malawi must find a solution soon to its economic problems as the situation could get worse in the near term and poverty could rise in light of growing imbalances in foreign exchange, fuel shortages, food price inflation, idle industrial capacity, and increasing unemployment.
“There is no reason for Malawi not to return to the positive cycle of confidence, investment, and support which resulted in fast growth and better living conditions for many Malawians just a few years ago,” said Sandra Bloemenkamp, Country Manager for Malawi.
Reflecting the positive discussions with Government, World Bank Country Director for Malawi, Zambia and Zimbabwe Ms. Kundhavi Kadiresan assured the Malawi Government that the Bank is willing to support Malawi implement the comprehensive package. “The Bank can provide technical support for real time monitoring of social and economic impacts, support to policy design and implementation, budget support, and convening potential partners ,” she said. She emphasized the importance of Government to engage other Development Partners in its recovery package and constructively communicate with all stakeholders.
The comprehensive response package was presented by a World Bank team led by Mr. Giugale and Ms. Kadiresan. The Government delegation consisted of five Cabinet Ministers of Finance and Economic Planning; Foreign Affairs; Agriculture; Trade; and Energy. Also in attendance were the Governor of the Reserve Bank, the Secretary to the Treasury, four Principal Secretaries and several Directors. The Minister of Finance and Economic Planning Dr. Ken Lipenga chaired the discussions.