A 2019 third quarter economic review issued by the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has portrayed a worsening economy in Malawi, attributing the situation uncertain weather patterns, electoral case and weak economic governance.
MCCCI outlined that since the success of any economy is primarily measured by an increase in the wealth created such as GDP growth, the developments in the local economy have not led to improvement in economic growth. Comparing with oast strides, the review says Malawi has done better in the past than present. “The Malawi economy has been able to grow at impressive rates before, such as 9 percent a decade ago, and yet during the period under consideration, the country did not get any closer to such growth rates.” says part of the review.
MCCCI attributes this economic growth record partly to the persistent obstacles to doing business which are yet to be resolved. It further highlights that global economic growth which creates demand for local exports remains subdued but also debt vulnerabilities remain high with total debt recorded at 60 percent of Gross Domestic Products (GDP). “The business performance is subject to all these risks and other historical challenges such as inadequate electricity, uncertainties in economic and regulations, among others,” reads the review in part.
At the beginning of the year, the Reserve Bank of Malawi Governor, Dalitso Kabambe said that 2018 was faced with many economic obstacles, but 2019 seems to be a hopeful year. Speaking to journalists, he said that consistent rains will produce a good harvest, compared to 2018’s food production that suffered dry spells and pest attacks, notably the armyworms.
Later, in its July 2019 Working Paper Series for Malawi, the African Development Bank (AfDB) says persistent adverse weather shocks in the country could lead to hyperinflation, escalating debt ratios and reduced economic growth if not well managed.