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| Over-valued kwacha irks private sector |
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by
Taonga Sabola, 18 April 2007
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02:07:16
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The country’s private sector has singled out the over pricing of the Malawi kwacha against its major trading currencies as one of the major factors affecting the growth of the export sector.
The Malawi Confederation of Chambers of Commerce and Industry (MCCCI), a grouping of over 250 private sector companies, said this in Blantyre on Monday during a pre-budget consultation session organised by Finance Minister Goodal Gondwe.
MCCCI chief executive officer Chancellor Kaferapanjira said long-term over-valuation of the kwacha has inhibited businesses from integrating into the global market and instead encouraged imports.
He could, however, not give the current market value of the kwacha arguing that the Reserve Bank of Malawi (RBM) should be in a better position to give the exact figures.
Economic analysts have for a long time argued that the kwacha is priced way ahead of its market value, allegations RBM governor Victor Mbewe has dismissed as untrue.
The kwacha has for a long time been supported by trickles of foreign donor money rather than production.
Last year, MCCCI also proposed to government the devaluation of the kwacha to make the country’s export industry attractive. However, nothing was done to that effect.
MCCCI also attributed the poor performance of the export sector to the country’s trade policy.
Responding to the concerns, Gondwe said there was a need for government, MCCCI and other groupings like the Economics Association of Malawi (Ecama) to discuss the way forward in arresting the issue of over-valuation of the kwacha to give exporters a better deal.
Gondwe is expected to meet private sector representatives from Lilongwe and Mzuzu tomorrow and on Saturday, respectively.
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