Economists say this will ensure that monetary policy decisions are free from political interference.  

President Lazarus Chakwera appointed the duo, with many viewing their combined experience as a positive step for the Reserve Bank of Malawi. Chief Economist at the Don Consultancy Group, Chifi Mhango, highlighted their qualifications, noting, “It’s a younger team, but a highly experienced one, having grown within the ranks of the Reserve Bank of Malawi. However, the challenge will be how assertive and independent they can be in their approach.”  

Mhango emphasised the need for better alignment between fiscal and monetary policies, which has been a persistent issue for Malawi. “The fiscal environment has always been challenging, marked by high expenditure and debt. The new governor, with his experience in both the Reserve Bank and the Treasury Department, is well-positioned to bridge this gap,” he said.  

Inflation remains one of Malawi’s most pressing economic challenges, having risen from 8% to 27% over the past four years. Although recent months have shown signs of stabilisation, Mhango warned that food prices and currency devaluation continue to drive inflation. “Most products in Malawi are imported, and the currency’s volatility puts additional pressure on monetary policy,” he explained.  

Mhango also called for greater public engagement from the Reserve Bank to enhance transparency and trust. “A lack of communication and engagement with the public and media has been a concern under previous leadership. The new team needs to address this,” he said.  

With high unemployment, rising living costs, and dwindling foreign exchange reserves, the challenges facing the Reserve Bank’s new leadership are significant. Mhango stressed the need for decisive action, particularly in managing inflation and creating a more favourable trade environment. “They’ve got a huge task ahead, but their experience from within the Reserve Bank provides hope for better decision-making,” he concluded.  

--ChannelAfrica--