Corporate captains and academicians at the ongoing 2022 Monetary Policy Conference are suggesting the need to improve productivity if the economy is to grow.
The suggestion follows an observation that the country is importing 3 billion US Dollar worth of goods against 1 billion US Dollars exports, a situation which is exerting too much pressure on the Forex situation.
Participants at the conference have suggested solutions to build a resilience and strength monetary policy framework.
The suggestions which include; increasing exports through agriculture, ensuring that treasury is not borrowing too much from the central bank so as to stimulate private sector growth.
One of the participants, FDH bank managing director Elias Ngalande has weighed in for Treasury to minimise resource misallocation and work towards building productive sectors.
Reserve Bank of Malawi governor , Dr. Wilson Banda while acknowledging that the country’s economy is facing a sharp decline in economic growth rate, retaliated on COVID-19 pandemic, Cyclones and the war in Ukraine developments as some of the external factors crippling the economy.
Banda was however quick to say that the central bank is working on modalities that will help to bring about economic recovery and growth.
“Obviously we have to take appropriate monetary policy measures, but we are also trying to say that monetary policy measures is not everything. In order to build resilience of an economy you need a combination of supportive policy measures both from fiscal and monetary side.” Said Banda
Academician, Ronald Mangani proposed for an amendment of section 4 of the 2018 Reserve Bank of Malawi (RBM) Act to re-introduce a clause that would allow the central bank to extend its mandate from focusing on price stabilization to economic growth.
During the discussion, it was observed that ever since the RBM Act of 2010 was changed in 2018, the central bank has had a staggering performance in economic growth rather than price stabilization.
“I recommend a reversal of section 4 of RBM Act so that the Bank should be given an explicit charge of contributing to economic growth.” Mangani said
The Monetary policy conference is being held under the theme “Monetary policy in the 2020s”.