The Reserve Bank of Malawi (RBM) has missed the inflation target of 9.2% for 2019 by 0.2 percentage points, attributed to rising food prices was a major challenge to monetary policy in 2019.

During the period in review, low supply of maize saw a spike in prices, from K5,500 to an average price of K15,000 per 50 kg bag. While NSO food and non-food inflation rates stood at 19.3 and 4.9 percent, respectively in December, RBM spokesperson Mbane Ngwira says that food prices will collapse this year. “…food prices will collapse and converge towards non-food inflation, assuming there will be no any serious supply shock in 2020, hence, this challenge is considered temporary,” he said.

Meanwhile, the central bank aims to achieve a 5% by 2021, to which the International Monetary Fund (IMF) depend on improved agricultural developments. Last year, agriculture in Malawi saw a low demand for tobacco as well as low sales. Having relied on the green gold, farmers have been urged to diversify output, as various strides have been made in discovering markets for produce other than the usual cash crops.