Malawi amoung 20 fastest growing African economies
Malawi has been ranked as one of the fastest growing economies in Africa, raising hopes that the impoverished country may reduce its poverty levels, according to the Millennium Development Goals (MDG) 2014 report.
But a local economist has argued that the country needs to do more to ensure that the growth translates into meaningful poverty reduction.
Malawi’s economy grew at an average of about six percent between 2008 and 2013, rising faster than Uganda, Lesotho, the Gambia and Chad, according to the report.
However, the country’s growth rate during the period pales compared to neighbouring Zambia’s growth of about seven percent, Mozambique’s 7.5 percent and Tanzania’s average growth of 6.8 percent, said the report.
Malawi, one of the poorest countries in the world with more than half of its population living below the poverty line of $1 (about K500, at the current exchange rate), grew by about 6.1 percent in 2013 and is expected to expand by 6.3 percent in 2014 and 5.8 percent in 2015, driven mainly by robust agriculture sector, according to the Reserve bank of Malawi (RBM).
A local economist, who is also country director of Innovations for Poverty Action (IPA), Thomas Munthali, said only two people out of 100 graduate from poverty in five years in Malawi and called on players in the economy to do more to ensure that the underprivileged enjoy the benefits of economic growth.
But in a telephone interview on Tuesday, an economics professor at the University of Malawi’s Chancellor College professor Ben Kaluwa said Malawi’s fast economic growth is due to the the country’s economy growing from a small base.
He argued that the country may not achieve poverty reduction although it has a fast-growing economy because of its high population density.
“The high economic growth cannot make a dent on poverty because of the high population density,” explained Kaluwa.
Development economists argue that a country has to consistently grow by six percent over a period of time to ensure trickle-down effect and reduce poverty.
The Human Development Report released recently indicated that Malawi did not perform well on the human development index (HDI)—a composite index of life expectancy, education and income—with a marginal improvement to 0.414 in 2013 from 0.411 in 2012.
