The Common Market for Eastern and Central Africa (Comesa) Secretary General Chileshe Mpundu Kapwepwe said that member states that are dependent on exports, are likely to suffer amidst the corona virus outbreak, since demand for exports has lowered also. In resolve, Kapwepwe called member state’s central banks to lower interest rates to encourage borrowing, therefore easing the economy.

The suggestion, according to Comesa, will encourage private sector, including small and medium enterprises (SMEs), into borrowing to stimulate domestic production and consumption. Last year, the Reserve Bank of Malawi lowered the interest rate twice, a development that got mixed reviews and results from banks. For instance, Standard Bank plc attributed its 13% profit loss to the Reserve Bank of Malawi’s policy rate cut. Chief financial officer Temwani Simwaka addressed shareholders at the bank’s annual general meeting in Lilongwe, stating that there was a drop in interest income year-on-year in spite of the balance sheet growth. “Our lending to customers went up year-on-year but because of the decline in terms of interest rates, our income levels went down” said Simwaka.

RBM spokesperson Mbane Ngwira also confirmed that the policy rate review may have affected financial institutions differently, depending on the nature of their operational framework. Should RBM lower interest rates further, the economy could stabilize, even amidst the corona virus breakout, but the commercial banks will still raise complaints.