Malawi economy is projected to grow by 5 percent this year and 7 percent in 2020 after the return of rainfall after severe drought, Finance Minister Joseph Mwanamvekha said on Monday in an annual budget speech.
The small southern African nation’s economy is largely reliant on sales of tobacco, tea and sugarcane, and has seen growth slow in recent years due to an El Nino-induced drought, electricity shortages and political uncertainty.
Malawi’s economy grew 4% in 2018 and it had to activate a three-year $112 million loan facility from the International Monetary Fund to shore up its finances as drought and slowing foreign donor funding over government corruption began to bite.
Mwanamvekha, appointed in May by President Peter Mutharika after he narrowly retained power, said the government was battling to curb the budget deficit and a rising government debt stock, which he said stood at 62% of GDP in December 2018.
The minister said Malawi was on track to remain within the terms of the IMF’s Extended Credit Facility (ECF) program. An IMF mission team arriving on September 10 for the second and third review will unlock the remainder of about $56 million of the loan, he added.