Finance Minister Goodall Gondwe has admitted that the current prevailing bad economic state is crumbling the anticipated private sector productivity.
This comes as the private sector has been admitting that current forex scarcity is forcing them out of business as they cannot import raw materials for production.
In an interview Gondwe said high interest rates and high inflation coupled with forex shortage is affecting private sector productivity.
He however blamed the commercial banks for hoarding forex as the causative agent for current forex scarcity.
“Private sector reacts on to possibilities of making profits and if the situation in the country is that of high interests rates they have to borrow in order to create employment or in order to manufacture goods.
“If the interest rates are high they will not be able to do that because the costs of production are high and the activity is going to be constrained, its going to be low and therefore that is why we have low economic activity in the country due to high inflation and high interest rates which are not conducive to the private sector”, said Gondwe.
He however assured the business community that government is working hard to normalise the economic situation for the better.