Economic commentator Professor Ben Kalua has urged the Malawi Government not to use the next Extended Credit Facility program (ECF) as a long-term solution to tackling its economic challenges.
This follows a recent update from the Ministry of Finance that the country must expect a new ECF Program within the second quarter of 2018.
Kalua said time has come for Malawi to stop relying on external assistance by becoming independent economically.
“Malawi needs to stop being a dependent child and stand on its feet,” said Kalua, a Lecturer in Economics at the Chancellor College.
He added that the standard way of approaching poverty reduction is to diversify economic activities.
Kalua branded the country’s current economic activities orientation as dangerous.
“We must move away from the primary orientation towards agriculture production and consider secondary activities such as manufacturing,” he elaborated.
On the same, Kalua recommended export diversification as a way of reaching out to various markets for the growth of the economy.
He said financial inclusion is of central importance to poverty reduction.
“Taking part in financial activities encourages economic participation hence reducing economic inequalities,” he clarified.
The Extended Credit Facility (ECF) provides financial assistance to countries with protracted balance of payments problems.
Assistance under an ECF arrangement is provided for an initial duration from three to four years, with an overall maximum duration of five years and carries no interest.
The former ECF arrangement for Malawi ended on 30th June this year.