Fresh drive to revamp Economy

Malawi Government yesterday formally unpacked the National Economic Recovery Plan (Nerp), with Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha warning that its success hinges on tackling underlying structural challenges. The minister highlighted chronic foreign exchange shortages, lack of fiscal discipline and unlocking new sources of long-term investment finance as some of the structural challenges demanding urgent attention. Mwanamvekha expressed the sentiments at Bingu International Convention Centre in Lilongwe yesterday during a consultation session on Nerp 2025-2030 with stakeholders.

He said: “Let us be honest with ourselves as a nation. The economic situation we are facing today did not emerge overnight. “The challenges we are confronting are deep, structural and accumulated over many years and exacerbated in the past five years.” On the other hand, the stakeholders argued that economic recovery will require difficult reforms and stronger policy coordination across government institutions.

He mentioned rising debt, high inflation rate, widening fiscal deficits and dwindling foreign exchange reserves as some of the pressure points. The minister said public debt had increased to K24 trillion from K4.1 trillion in 2019 while foreign exchange reserves had fallen from more than four months of import cover in 2019 to less than one week in September 2025. Mwanamvekha further said inflation had peaked at 30 percent while debt-servicing obligations had risen to levels consuming more than half of domestic revenues.

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Reserve Bank of Malawi Governor George Partridge, who was part of the meeting, stated that Malawi’s foreign exchange crisis may be more complex than a simple shortage of United States dollars. He argued that foreign currency continues to circulate within the economy, but distortions in pricing and demand have created severe market pressures. “If the country doesn’t have foreign exchange, the first sign and symptom is that you see most of the supermarkets are empty,” said Partridge, a former chief executive officer of National Bank of Malawi plc who also at went on to head the bank’s main shareholder conglomerate Press Corporation plc.

He contended that the main problem with Malawi’s economy is not availability of foreign exchange, but the pricing rate. Partridge linked the forex pressures to years of rapid money supply growth, excessive borrowing and fiscal imbalances that increased demand for foreign currency.

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