Secretary to the Treasury Betchani Tchereni has said Malawi is on the path to economic stability, albeit patience and strategic intervention are required to achieve the feat.
Speaking on the sidelines of the pre-budget consultation meeting in Blantyre, Tchereni said rebuilding an economy mirrors the asymmetric nature of construction versus destruction where a single cyclone can destroy in an hour what took 10 years to build.
He cited the agricultural transformation strategy centred on the National Economic Empowerment Fund (Neef), which has allocated K160 billion towards boosting food security, targeting farmers with significant landholdings of five to 20 acres, as a significant move to check inflation.
“We are witnessing an unprecedented farmer engagement. The Mega Farms Unit has registered over 900 farmers this year, compared to less than 100 in the previous season. We’re projecting 300,000 metric tonnes of maize, a 10fold increase from last year’s 30,000 metric tonnes.
“Higher maize production leads to lower prices, which drives down inflation. This, in turn, influences interest rates and exchange rates positively, especially when we achieve surplus for export. Plans are underway for winter cropping through Neef, aiming to add 700,000 metric tonnes to the projected annual harvest of 4 million tonnes,” Tchereni said.
Tchereni cautioned against expectations of immediate results, citing the example of the Malawi Development Corporation Holdings Limited (MDCHL)’s investments in food processing.
“Installing industrial machinery for fruit canning and cornflake production takes six months to a year before production can begin. Import substitution and its benefits on foreign exchange will take time to materialise,” Tchereni said.
In a recent interview, President of the Economics Association of Malawi (Ecama) Bertha Chikadza said the economic outlook was cautiously optimistic, with gross domestic product (GDP) growth projected at 4 percent for 2025.
She said the projection was driven by election activities, mega farm investments and favourable weather supporting agriculture.
“Inflation is forecast to decline from 32 percent in 2024 to 24.2 percent, potentially lowering interest rates and boosting private sector credit access to stimulate growth. However, fiscal deficits, persistent inflation and policy execution risks pose challenges to these projections. Achieving the growth target will depend on effective policy implementation, fiscal discipline, agricultural resilience, and private-sector participation,” Chikadza said.
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