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URAC DONATES ITEMS TO MZUNI FLOODS VICTIMS

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By Lucius Gerrald

The Urban Research and Advocacy Centre (URAC), on thursday the 16th of December 2021, donated assorted items worthy tens of thousands to victims of floods which took place last weeks at the Mzuzu University (MZUNI).

The donation comes barely weeks after heavy rains affected a number of students who reside at St. Augustine area, outside the university’s campus which left the students handless.

Speaking during the donation, the executive director of URAC, Prof. Mtafu, said that its their social responsibility to help hopeless victims of such natural disaster and promote them materially for the betterment of their lives. He added that the centre thought it wise to weigh in with material support to the students thus basic needs as they are sourcing other funds to supplement the donation.



On his part, Dean of students at the green campus, Mr Fiskani Ngwira, thanked the URAC for the timely donation and hoped that the organisation will keep on bailing as many students as possible in consideration that there are many other needy students who are lacking basics whilst studying at MZUNI.

Representing the students, Face to face Social welfare director, Mr Isaac Lalama, was quick to denote his gratitude towards the donation. He further extended appreciation note to URAC for the items which have been served to the victims. Lalama has since appealed to the general public to consider, financially and materialistically, helping multitude of needy students who are struggling to make it on daily basis at Mzuni.

At least 18 students have benefited from the donation which include cooking oil,10 kgs bags flour and rice, parked chicken,writing pens and note books.

Introduced in 2016, URAC is a research centre which aims at promoting evidence based economic planning, development, service delivery and accountability. It has its main station in Mzuzu and sub-stations in Chintheche, Chilumba, Lilongwe, Blantyre, among other districts.

Chilima Calls Faith Leaders to champion Mindset Change

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By Evance Chisiano

The State Vice President, Right Honourable Dr. Saulos Chilima has called on faith leaders to champion mindset change through transformative leadership

Chilima made the call at Sun bird Nkopola in Mangochi on Thursday when he opened a two days Faith Based Organizational (F.B.O.) Leadership Conference.He therefore described faith groups as largest and best organized civil society in Malawi capable of contributing to transformative development that will contribute towards attainment of the Malawi 2063 agenda.

File Photo: Chilima in one of the religious meetings

“Im very passionate to mind set change,” Chilima expressed his commitment towards all efforts that are meant to see Malawi going forward.Malawi Institute of Management (MIM) Board Chairperson, Professor Lewis Dzimbiri said MIM has the obligation to offer managerial and leadership conferences for effective functions of various public, private sectors towards Malawis development aspirations.

IMF Executive Board Concludes 2021 Article IV Consultation with the Republic of Malawi, GDP Growth expected

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The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation  with the Republic of Malawi on December 13, 2021.

Malawi’s economy has been severely affected by the COVID-19 pandemic and faces additional challenges. Growth has contracted by 4½ percent in 2020 compared to pre-pandemic levels in 2019, while the number of cumulative positive cases of COVID-19 has more than doubled in the first half of 2021. In recent months, there are signs of gradual recovery and daily COVID-19 positive cases remain relatively low. Helped by a good harvest, real GDP growth in 2021 is projected at 2.2 percent, up from 0.9 percent in 2020. Inflation is expected to increase to 9.0 percent in 2021 from 8.6 percent in 2020, driven by increases in prices for fuel, fertilizers, and food.

President Chakwera’s Malawi Vision 2063 aims for the country to reach upper-middle income status by 2063 by investing in physical and human capital. Under announced policies, which aim to implement a gradual pace of adjustment and maintain fiscal and current account deficits over the medium term to meet substantial development and social spending needs, the economy is projected by staff to recover gradually to reach 4.5 percent growth by 2023.

The outlook is predicated on the assumption of continued domestic and external financing. It assumes Malawi will be able to sustain higher public investment than experienced in the past decade, have strong fiscal multipliers, maintain fiscal and external deficits on the order of 10 percent of GDP over the medium term, and continue to access sizable financing from regional development banks and domestic borrowing to close an estimated financing gap of about 4-5 percent of GDP each year. The growing debt burden is, however, projected to crowd out private sector investment and hinder medium-term economic prospects. Moreover, in spite of emergency COVID-19 assistance in 2020 and SDR allocation in 2021, the Reserve Bank of Malawi (RBM)’s gross reserve assets are projected to decline to 1½ months of next year’s imports by end-2021, leaving the economy vulnerable to shocks.

Uncertainty surrounding the outlook remains high, and risks are tilted to the downside. The main risk to the outlook is a sudden stop of available financing especially from regional development banks. If this risk materializes, it could lead to an abrupt real exchange rate adjustment, import compression, significant impacts on growth and financial stability, and an adverse effect on the most vulnerable.

Executive Board Assessment 

Executive Directors agreed with the thrust of the staff appraisal. They noted that Malawi’s economy has been severely affected by the pandemic and commended the authorities for their efforts to support the economy. Despite signs of gradual recovery, downside risks to the outlook persist. Directors stressed the need for determined implementation of policy adjustments to address Malawi’s macroeconomic imbalances, restore debt sustainability, rebuild external buffers, and reduce poverty and inequality to improve social outcomes.

Directors underscored that restoring debt sustainability requires both addressing the legacy debt burden and adopting a strong fiscal adjustment program. While expenditures on containment measures and vaccine administration remain important in the near term, redoubling efforts on domestic revenue mobilization, curtailing and prioritizing current spending, and public financial management reforms are critical. Directors expressed concerns over Malawi’s high risk of overall and external public debt distress.

Directors noted that a tighter monetary policy stance would be needed if inflationary pressures materialize. In this regard, they encouraged careful monitoring of money growth and pressure on the exchange rate. Directors also underscored the importance of vigilant financial sector supervision, through close monitoring of potential risks to financial stability and the development of prudential policy tools.

Directors noted the substantially weaker external position relative to the level implied by economic fundamentals and desirable policies. They stressed that allowing for greater exchange rate flexibility through a careful approach, containing external imbalances, and rebuilding external buffers are critical to reducing Malawi’s vulnerabilities to external shocks.

Directors noted potential noncomplying disbursements during the 2018 Extended Credit Facility arrangement with the IMF and the need for resolution of this case of potential misreporting ahead of a new program. They urged the authorities to deliver on their commitment to conduct a special audit of foreign exchange reserves and improve the frequency and quality of data reporting.

Directors called for further efforts to strengthen public sector governance and institutions to safeguard scarce resources, strengthen policy effectiveness, and improve transparency and data provision, including on commitments and payments of COVID-19 related spending. Enhancing a robust cash management and control system of the national budget and strengthening the Board’s oversight of foreign exchange reserve management at the RBM are important.

Directors noted the catalytic role that an IMF arrangement could play to support the adjustment effort and mobilize donor financing. They emphasized that progress towards an arrangement would depend on strong commitment to an adjustment program, sizeable financing support from the international community and Regional Development Banks in the form of nondebt creating flows.

While Malawi remains current on its payments to the IMF, Directors concurred with the post-financing assessment (PFA) conclusion, including with respect to Malawi’s capacity to repay the IMF.

It is expected that the next Article IV consultation with Malawi will be held on the standard 12-month cycle.

Table 1. Malawi: Selected Economic Indicators, 2020-26

2020202120222023202420252026
Prel.RCF Pre-rebaseRCF Post-rebaseProj.Proj.
National accounts and prices (percent change, unless otherwise indicated)
Real GDP0.92.22.22.23.54.54.04.04.1
Nominal GDP(billions of Kwacha)8,8156,9339,9769,71211,11412,66114,15815,66317,287
GDP deflator8.58.58.57.810.69.07.56.46.0
CPI (annual average)8.69.59.59.011.79.88.47.26.8
Central government (percent of GDP on a fiscal year basis)1, 2
Revenue14.920.014.114.814.314.314.414.414.3
Tax and nontax revenue13.417.412.313.113.113.213.413.513.7
Expenditure and net lending21.533.023.122.224.723.823.824.124.7
Overall balance (excl. grants)-8.1-15.6-10.8-9.1-11.6-10.6-10.4-10.6-11.1
Overall balance (incl. grants)-6.6-13.0-8.9-7.4-10.4-9.5-9.3-9.7-10.4
Financing gap/residual gap0.80.00.0-0.10.85.76.37.56.8
Domestic primary balance3-1.7-4.4-2.9-2.5-5.1-3.0-2.5-2.2-2.3
Money and credit (percent change)
Broad money17.210.910.910.214.413.911.810.610.6
Credit to the private sector16.411.711.730.114.212.610.19.47.5
External sector (US$ millions, unless otherwise indicated)
Exports (goods and services)9661,2451,2461,0781,1971,3311,5221,7041,890
Imports (goods and services)3,0523,4023,4103,2083,2983,2623,2483,5203,693
Gross official reserves566958974394402415461498511
(months of imports)2.13.33.41.41.51.51.61.61.6
Current account (% of GDP)-13.6-20.3-14.1-15.0-14.3-12.6-10.8-10.7-10.4
Overall balance (% of GDP)-3.2-1.40.4-3.2-4.2-3.1-2.3-2.4-3.5
Financing gap (% of GDP)1.84.63.52.93.14.1
Debt stock and service (percent of GDP, unless otherwise indicated)
External public debt32.934.424.131.934.736.337.639.541.5
Total public debt54.878.254.259.064.368.974.480.485.7
Ext. debt serv. (% of exports)7.28.88.847.244.140.835.728.133.3
Sources: Malawian authorities and IMF staff estimates and projections.
1 The current financial year, 2021, runs from July 1, 2020 to June 30, 2021. FY2021/22 covers 1 July 2021 to 31 March 2022, to accommodate the transition to an April – March fiscal year starting from FY2022/23.
2 Please note that government fiscal statistics are reported following the Government Finance Statistics Manual (2014) starting 2020 projections and going forward.
3 Domestic primary balance is calculated by subtracting current expenditures (except interest payment) and domestically-financed development expenditures from tax and nontax revenues.

Environmental activist Chimkombero embarks on an initiative to plant fruit trees in people’s homes

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By Chisomo Phiri

In an effort to conserve the environment, environmental activist and co-founder at Save the Future Foundation Maloto Chimkombero has embarked on an initiative called Green Homes Initiative which aims at donating and planting fruit trees in people’s homes of Lilongwe city and the surrounding areas.

Speaking in an interview, Chimkombero said, he believes that the initiative will encourage malawians most especially those who live in urban areas to plant fruit trees in their homes, thereby, promoting environmental conservation.
” We believe that tree planting should be done at a family level so that so that we instill the spirit of responsibility in tree management among the youth and children. The other reason is that in urban areas, people buy plots not for forest creation but building houses, so the best way is to encourage them to plant fruit trees around their houses,” said Chimkombero.

Maloto Chimkombero

Chimkombero said through the initiative, they are planning to plant 10,000 fruit trees within Lilongwe.
” Through this initiative, we are planning to plant 10,000 fruit trees within Lilongwe city and the surrounding areas . We are also planning to construct a village which will have all kind of nature and a school where people will be trained environmental management skills and knowledge,” he said.

The environmental activist commended government through Ministry of Forestry and Natural Resources for its effort in promoting environmental conservation through a number of projects. He said despite these achievementst, there are still other issues that government has to look into so that environment can be fully protected.
” We are very thankful to the government through Minister of Forestry, Honourable Nancy Tembo.The lady is doing her best in protecting the environment conservation. But still, there are other issues that government has to look into so that environment can be fully protected.
” For instance, the issue of thick plastics ban has to be solved as soon as possible. Government has to kill charcoal market by investing in clean energy technologies. Timber Millers have to be investigated on how they are operating, we are losing more trees because of their greedy. And councils should improve on waste management issue, it is high time they construct waste dumping sites,” said Chimkombero.

He however, urged fellow youths in the country to be united and take care of environment in their respective communities.
” Let me urge my fellow youths to be united and take care of our environment. We are leaders of today and tomorrow. We need good water, healthy soils, trees and wildlife for our life to be productive. Environment is our future. Let’s love it,” he urged.
Save the Future Foundation is a developmental organization whose mission is to create sustainable opportunities for both current and future generations. It focuses on environmental management, climate change mitigation, building schools, providing safe water and youth empowerment.

Apart from being a co-founder at Save the Future Foundation and environmental activist, Chimkombero is also a Jazz musician who advocates for environmental practices and polices through singing.

Blantyre Water Board launches five-year plan; appeals for bail out

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By Lydia Maganga

Blantyre Water Board (BWB) has launched a Five-year Strategic Plan (2020-2025) which aims at providing best services to residents within Blantyre City and surrounding areas.

Speaking during the launch of the strategic plan on Monday in the city, the water boards chairperson, George Mnesa, said they decided to launch the five-year plan to counter increasing social and economic challenges the organisation is facing due to urbanisation and the hostile economic operating environment.“We do not have enough [funds] to cover our monthly bills and at the moment, we owe ESCOM K24 billion accumulated in a space of two years.“We have asked government to help up settle this bill so that we can be operational and pay the monthly bills properly,” said Mnesa.

Minister of Forestry and Natural Resources, Nancy Tembo, who was guest of honour at the launch function, said the issue of raising water tariffs should not be a focus point, but rather making sure that the services being offered are satisfactory.

On bailing out BWB, the minister said the matter is in the hands of the Ministry of Finance, but her ministry is currently focusing on helping the water board to reduce its electricity bill.