Nkhutabasa served at the European Union, in Andorra, Belgium, France, the Principality of Monaco, Italy, Luxembourg, and the Netherlands during his tour of service
* Either we lead with courage and clarity now, or we will pay in currency far costlier than the Kwacha
* Malawi is functionally insolvent; the Kwacha is an illusion; the economy is not growing; public finance is a wreck; politics is blocking progress
By Duncan Mlanjira
Former Malawian diplomat, James Woods Nkhutabasa contends that “Malawi is not beyond repair but it is on borrowed time” adding that either the current administration leads “with courage and clarity now, or we will pay in currency far costlier than Kwacha”.
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This is in reaction to the International Monetary Fund (IMF) report 2025 Article IV Consultation on Malawi, which he described as “polished, technical and laced with the usual economic euphemisms”.
But, he says, if the IMF diplomacy in speech is stripped away “what emerges is an unmistakable message that Malawi is broke, politically paralysed, and on the edge of deeper crisis”.
“As a Malawian, I will not repackage this in donor-friendly jargon — here is what the IMF report actually tells us and what the government, and too many in our commentariat, will not say:
1. Malawi is functionally insolvent
“Let us call it what it is, debt distress is code for we are over-leveraged, have zero fiscal buffers, and no serious repayment capacity. Our reserves are critically low. Our economy is being propped up by temporary grants and what little goodwill remains from the international community — and make no mistake, that goodwill is waning.
“The IMF is clear as to as much that donor confidence is fragile, and with elections on the horizon, no one is holding their breath for meaningful reform.
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2. The Kwacha is an illusion
“Despite a brutal devaluation in 2023, the Kwacha is still overvalued. The spread between official and black market rates confirms it, izi tonse tikudziwa (we all know) — what that really means is that we are pretending to have a free market currency, when in fact we are trapped in a dysfunctional, dual-rate regime that rewards arbitrage, corruption, and forex leakage.
3. The economy is not growing
“The IMF pegs 2025 growth at 2.4%. With population growth near 3%, we are actually getting poorer per capita. Combine that with 29% inflation, and the result is devastating — in layman terms, Malawians are losing purchasing power by the day.
“Bread, fuel, medicine, school fees all climbing, while wages stagnate (olo ka increase ka average wage kaja sikakuthandiza — (the recent minimum wage increase will not help). This is an economic downturn and cost-of-living collapse.
4. Public finance is a wreck
“Most of our revenue is being eaten by domestic debt interest payments, leaving next to nothing for roads, clinics, farm inputs, or even civil servants’ salaries. The IMF stops short of calling it what it is, but let us be honest, our public financial management is bleeding and no one has applied a tourniquet.
5. Politics is blocking progress
“The report diplomatically references ‘political-economy constraints during the election cycle’. Simply translated as the government is unwilling to make hard choices in an election year.
“So everything will be delayed. Again. This is economic governance stuck in campaign mode, short-termism, a’ndale kuzisanja (politicians making the most of it, personally) at its most expensive.
The former diplomat, who served the European Union, Andorra, Belgium, France, the Principality of Monaco, Italy, Luxembourg, and the Netherlands during his tour of service, says: “Enough policy inertia, stop blaming droughts and cyclones, stop blaming opposition etc — this crisis is man-made and it can be reversed if leadership is serious.”
He thus offers some suggestions that must be done, saying we need:
* a full audit and restructuring of public debt, starting now;
* a floating exchange rate based on reality, not denial;
* a lean, technocratic budget focused on productivity, not perks;
* a wartime-level agriculture and export strategy with value addition, not just raw output;
* radical transparency not speeches, not spin but figures that mean something.
“The IMF has held up a mirror — the reflection is not flattering for us a Nation. We can either keep adjusting the mirror, or start adjusting the reality.”
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Nkhutabasa is a consultant who specialises in strategic communications and governance and between 2011 and 2013, he worked for Mo Ibrahim Foundation and was in charge of, among other things, directing the Foundation’s initiatives to advance African leadership and good governance through high-level gatherings and workshops, creating and carrying out strategic media and communication plans.
He also organised and delivered the Mo Ibrahim Prize for outstanding African Leadership, which awards a deserving former head of state in Africa with US$5 million.
Nkhutabasa was on the board of the London School of Economics Africa Summit from 2014 to 2016 and between 2014 to 2020, he served as Country Director and Advisor for Invest Africa, a renowned pan-African business platform that encourages trade and investment in Africa.
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He has also held other roles – including serving as a communications advisor to numerous African heads of state across East, South, and West Africa; serving as chief consultant to several oil and gas companies such as UK-owned Surestream Petroleum and a strategic communications and government affairs consultant to UAE Ras Al Khaimah Gas.
In its report released in Washington, DC on June 4, the IMF indicated that its team led by Justin Tyson visited Malawi from May 22 to June 3 to hold meetings with the Malawian authorities and other counterparts from the public and private sectors and civil society for the 2025 Article IV consultation.
“Discussions focused on policies to restore macroeconomic stability, and the structural reforms needed to foster strong, inclusive, and durable growth,says the report; Malawi; https://www.imf.org/en/News/Articles/2025/06/04/pr-25175-malawi-imf-completes-2025-art-iv-mission.
