Nation Online

Cost of living in Zomba City soars, inflation at 43 %

Malawi’s old capital, Zomba City inflation has soared with December recorderd at 48. 3 percent—the highest among the four cities in the country, according to the National Statistical Office (NSO).

The NSO January statistical bulletin indicates that Zomba was the most expensive city and place in the country.

The Zomba inflation stands at 13.7 percentage points above the national headline inflation of 34.6 percent and 8.5 percentage points above the urban rate.

This signals that prices of goods and services in Malawi’s newest city are generally rising fastest in the country.

In an interview last week, Economics Association of Malawi (Ecama) executive director Nelson Mkandawire said this indication has serious implications on businesses and growth of the city.

“This indication means that consumers’ incomes are heavily eroded thereby affecting business activity. Certainly investors will run away from the city and invest in places or other urban areas where costs are lower, conversely investors will not be attracted into the city.

“To curb this, government needs to provide some mitigating measures because inflation in the country is mainly driven by food costs and with the recent drying up of Lake Chilwa which is close to the city, it means availability of essential goods has been affected,” said Mkandawire.

Last November, Chancellor College professor of economics Ben Kalua while explaining the high inflation rates in the city pointed out that people in Zomba pay the cost of having no manufacturing industries.

Malawi’s year-on-year national inflation for December hit 34.6 percent, a 1.3 percentage points increase from the previous month’s 33.3 percent, but 13.7 percentage points higher than that of December 2011, according to a recent NSO stats flash.

The statistical body attributed the increase to the rise in both food costs at 34.5 percent compared to 5.2 percent and core inflation at 34.5 percent compared to 14.4 percent year-on-year.

Consumer Price Index (CPI) produced by the NSO is the main measure of inflation in the country. The current Malawi CPI computation compares current monthly prices of consumption of goods and services to corresponding prices of base year 2000.

Malawi inflation is largely moved by the cost of food particularly maize which contributes to about 35.2 percent to urban inflation and 58.1 percent to national inflation. Other drivers to urban inflation include housing which contributes about 21.1 percent, transport 11 percent, and clothing and footwear 8.6 percent.

Urban areas trailing Zomba in December 2012 were Blantyre at 42.2 percent, Mzuzu at 38.4 and Lilongwe at 36.9 percent while the urban inflation averaged 39.8 percent.

In December 2011, with national inflation at 9.8 percent and urban inflation at 13.3 percent, Zomba inflation stood at 10.8 trailing coming third after Blantyre at 15.4 percent and Lilongwe at 12.5 percent, while Mzuzu had the lowest rate at 5.3 percent.