Minister of Finance , Sosten Gwengwe has today told Parliament that the 25 percent devaluation effected two months ago was a necessary evil which has saved the country’s economy from collapsing.
Gwengwe argued that without devaluing the kwacha, the country could have plunged into a fuel crisis similar to the one experienced in 2012.
Said Gwengwe: “We had to make a decision. We were between a rock and a hard place. Otherwise, the Reserve Bank of Malawi wouldn’t have been able to buy forex from the local market to support Nocma [National Oil Company of Malawi] to purchase fuel. Devaluation was better than plunging the country into a fuel crisis.”
Gwengwe`s remarks came during a debate on a bill concerning additional financing for Malawi Social Support for Resilient Livelihoods which seeks to borrow K193 billion to increase social cash transfer packages and beneficiaries.
Democratic Progressive Party member of Parliament , Ralph Jooma, had earlier made an observation that the bill was tabled late in the House saying it will be impacted by the devaluation which has led to increase in prices of essential commodities.