Malawi’s central bank has warned of a serous economic down turn following the on going post- election demonstrations in the southern African nation in the wake of the disputed Presidential election results.
Some Malawians have been protesting against the declaration of President Peter Mutharika as a winner of the May general elections, and they are demanding for resignation of Jane Ansa, the Chairperson of the Malawi Electoral Commission (MEC).
Ansa is accused by the protesters of presiding over a rigged election.
Two presidential candidates in the May Presintial race are challenging the results in court.
“The protests have a great potential to cripple the operations of both government and private sector investments both in short and long-runs following reduced economic activities in the country,” says Daliso Kumbambe, the Reserve Bank Governor.
He then urged concerned parties to find workable solutions to address the current political impulse.
But dispite the economic threats, the Governor says the bank has maintained the Monetary Policy Rate at the current 13.5%, and projects for a 5 percent recovery of a Gross Domestic Product-GDP this year.
“Among others, the 2019 annual inflation projection has been revised upwards from 8 percent in the previous MPC meeting to nine percent currently, due to elevated maize prices,” said Kumbambe while giving assurance that the policy stance would allow the recent monetary policy easing decisions to filter through the market while further supporting expansion in the private sector credit.
According to Dr. Kabambe, Malawi’s annual growth in credit in the private sector has been steadily picking up on account of easing monetary policy.
He disclosed that the private sector credit grew by 17.1 percent year-on-year in June 2019, up from 11.8 percent in March 2019 and 2.1 percent in June 2018.