LILONGWE, January 7, 2025 Standard Bank Plc looks forward to working with the new leadership team at Reserve Bank of Malawi (RBM) under the leadership of Dr Macdonald Mafuta Mwale and Dr Kisu Simwaka. The two economists bring a renewed sense of vigour and confidence to the financial markets given their vast expertise in economics and financial regulation. We are pleased to have a team that has built a track record working at the technical level in both respects of economic policy formulation and implementation.
In the recent past, the leadership at the RBM has been a keen participant of dialogue forums that Standard Bank Plc initiates and drives, namely the Growth Conversations and Leadership Round Table . We look forward in further strengthening this dialogue with Dr Mwale and his leadership team. Specifically, we would like to sustain the dialogue momentum on the following key issues, and which aim to urgently address current economic challenges haunting the country;
- A return to free market-driven foreign currency management policies aiming to stimulate and incentivize the private sector, NGOs and donors to participate fully and effectively in contributing to the stabilisation of FX reserves . This should help increase inflows and circulation of foreign currency in the market, much needed to support the country’s economic growth by making FX liquidity for export-oriented productive sectors readily available. Key amongst these sectors is agriculture, which is currently in season following the onset of Malawi’s rains.Other considerations are for mining, tourism and manufacturing sectors and this goes in line with Malawi’s long-term vision of building an inclusively wealthy and self-reliant nation as stipulated in the #MW2063. 2. Speed in tackling the country’s debt by taking bold steps and leadership in expediting debt restructuring negotiations with key creditors.
We are painfully aware that the current pace of debt restructuring is clearly not consistent with the need to speedily resolve Malawi’s debt burden to usher in meaningful recovery and growth. Fast-tracking the debt restructuring process should help free up the fiscal space and give the government much needed momentum and leverage to achieve fiscal stability, find resources to finance short-to-medium critical development expenditure, and stabilize supply of critical imports such as fuel. Lack of fiscal space will mean that prevailing supply-side constraints will continue to manifest. This will affect the private sector and negatively decimate production, especially in agriculture.
3.Responsive and Independent Regulation
Based on feedback from various dialogue forums that Standard Bank Plc has convened, stakeholders are crying for a breath of fresh air in a central bank that reasserts its role in guiding economic policy direction and implantation. A paradigm shift and new thinking is required to drive and guide the country’s economic policy agenda, and no one else is better placed to assert in this role than the central bank itself.
In reasserting its role, the RBM must strive to be independent of undue external influences and act responsibly in the best interests of free market principles.
Mr Phillip Madinga
Chief Executive
