Malawi: Malawi's Economists Press for Fiscal Discipline and Forex Reform As Debt Nears 91 Percent of GDP
[Nyasa Times] The Economics Association of Malawi says tight budgets and a more flexible exchange rate are needed, but warns that the medicine carries costs for business
Malawi's economists are advocating for fiscal discipline and reforms to the foreign exchange system as the country's debt approaches 91 percent of its GDP. The Economics Association of Malawi (Ecama) has stated that tight budgets and a more flexible exchange rate are needed to address the severe dollar shortage and public debt of approximately K24tn.
Ecama president Bertha Bangara-Chikadza has identified fiscal discipline, expenditure control, forex management, exchange-rate flexibility, and tackling distortions in the parallel market as the country's primary policy challenges. She recommends a tight fiscal stance with stricter spending control, limitations on domestic borrowing, and improved accountability at state-owned enterprises.
However, she warns that fiscal austerity could negatively impact businesses reliant on government procurement, and that a more flexible exchange rate could exacerbate the cost of essential imports like fuel and medicine.
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