Economic performance in the Southern Africa Development Community (Sadc) in 2012 has been described as unsatisfactory with most member States missing targets of primary macroeconomic convergence programme within the 14-member regional bloc.
This is according to a draft agenda document on the Sadc Council of Ministers which Business Review has seen.
The Sadc report has blamed the worsening economic performance on international development that emerged in the year including the ravaging impact of the global financial crisis.
“Economic performance in 2012 was generally unsatisfactory in most of the member States and largely influenced by international developments such as the continuing impact of the global financial crisis on slow global growth and recovery,” reads the Sadc document.
It also attributes the decimal economic performance among Sadc member States to the euro zone crisis and the volatility in the global commodity markets which rocked the global economy last year.
Reacting to the report, Malawi’s Ministry of Finance spokesperson Nations Msowoya on Tuesday described last year as a unique year for Malawi saying it was a transitional year which saw the country making major adjustments.
Said Msowoya: “We are, however, optimistic that we will be closer to these [Sadc] targets.”
Last year, Malawi economy also suffered a severe setback emanating from a slump in agricultural production, especially the poor tobacco production coupled with the scarcity of foreign exchange which retained smooth importation of key imports into Malawi.
Malawi’s real GDP growth rate last year was earlier projected at 4.3 percent but a slump in agriculture emanating from a weather-related decline in maize production and a halving of the tobacco crop prompted authorities to revise the growth rate downwards to 1.8 percent towards the end of the year.
But President Joyce Banda, who asendend to the presidency in April last year has offered a ray of hope with her economic reforms aimed at healing domestic economy.
Commenting on the specific economic indicators, the Sadc report bemoans that inflation remains problematic of the primary indicators with only three member States namely Mauritius, Mozambique and Zimbabwe out of the 14 members countries having met the target of less than five percent in 2012.
It says with respect to Zimbabwe, government policy of adopting a system of multiple currencies significantly contributed to a slow down.
“Performance with regard to the fiscal deficit indicator was reasonably good in 2012, with half of the 14 member States meeting the target of less than three percent of GDP.”
On public debt, the Sadc report states that the best performance in terms of reaching the macroeconomic convergence in 2012 is in the area of public debt.
Going forward, the report has provided recommendations for possible consideration in developing and implementing macroeconomic convergence programs in the coming years.