Malawi finance minister says no change in economic policy

Malawi will not change economic policies that have helped usher in years of strong growth, newly-appointed finance minister Ken Kandodo said on Friday.

Kandodo told Reuters in one of his first interviews since taking office that the policies in place had been proven to work, even in the face of the global economic crisis.

"This is the same government whose economic policies have delivered in the last four years and, therefore, I don't intend to change anything at Treasury, but continue with polices on the same path," he said.

Kandodo, a former UNICEF financial consultant and businessman who was serving as head of the southern African country's National Food Reserve Agency, replaced Goodall Gondwe as finance minister on Wednesday.

The appointment came as a surprise, with analysts having praised Gondwe for helping Malawi achieve average economic growth of around 7 percent for the past three years.

But Kandodo said that he is up for the challenge and asked for support and confidence from the business community.

"I have so many years of experience in the private sector ... I am quite familiar with issues in the ministry of finance and I would like to tell investors, donors, the public and other stakeholders not to be worried."

He said a key priority over the next five years was to help diversify the country's economy, currently heavily dependent on tobacco, suffering from low demand due to the global crisis.

Tobacco is Malawi's mainstay, accounting for more than 60 percent of foreign revenue.

"With the global crisis, most of our commodities including tobacco now face a slump in demand and the only way to deal with this quagmire is to diversify to other crops like rice which have huge global demand."

The U.K. Economist Intelligence Unit has forecast Malawi will have the world's fastest growing economy after Qatar this year, but the global credit crunch still poses threats to attaining the forecast growth.

"Despite the impact of the credit crunch, I know that my colleague has tackled in the budget that I am due to present soon, the potential threats that Malawi faces with the credit crunch and I am sure we will still attain growth above 7 percent as projected because of growth in other sectors like mining and the telecommunication industry," Kandodo said.

Malawi started uranium production at a $200 million mine in northern Malawi in April, that was expected to boost the country's export earnings.