‘Devaluation only way to economic recovery’ – MCCCI defends govt

The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has defended government’s decision to devalue the kwacha, saying it is only way to economic revival.

Government, through the Reserve Bank of Malawi (RBM), last month devalued the kwacha by 49 percent, in a desperate attempt to get back the derailed Extended Credit Facility (ECF) programme with the IMF.

MCCCI Chief Executive Officer Chancellor Kaferapanjira said in Mzuzu on Wednesday that although the effects of the devaluation will be felt in the short term considering the weakening of the buying power, it will bolster the local industry leading to cheaper prices of goods.

He added that employment opportunities will arise in the long run.

“What the devaluation has done is to kill the appetite for imported goods, hence nurturing demand for local products because it has made imports expensive.

“The increased demand for local products will boost local industries, thereby creating more jobs and that means more taxes for the government,” said Kaferapanjira on the sidelines of the briefing of chamber members in the region.

He said a jump in local production coupled with the weakened buying power should lead to surplus commodities, thereby forcing the local industry into the export market.

“This is the time the local industry should strategise on breaking onto the export market rather than wasting time complaining about the effects of the devaluation.

“Maybe this is coming from the fact that our industries are used to importing materials for production without thinking of exporting.

“But our economy will be better off if we start exporting because exports are paid for in dollars and once you have the dollar you are a king because you can go anywhere to buy,” added Kaferapanjira.