Majority of adult Malawians are failing to meet their spending goals, with 59 percent frequently end up spending more than they intended, FinMark Trust data has shown.
The trust points to the challenges posed by a tough economy and rising commodity prices, with about 83 percent of the adult population aged 16 years and above not able to save money.
According to the data, 80 percent of individuals run out of money before their next pay period, further pointing to financial struggles majority are facing.
Said FinMark Trust in its recent survey: “When income is insufficient to cover expenses until the next earning period, managing finances can be challenging, even for those who have the self-control to implement financial planning and budgeting.
“The propensity of adults to save depends largely on the ability to consume less of their disposable income, financial literacy and the availability of products and services for saving.”
Savings are an important vehicle to raise funds for investment and credit.
The cost of living in Malawi has been on the rise, with Centre for Social Concern (CfSC) data showing that the basic needs basket for a household of six has risen from K523 648 in September to K540 353 in October.
Rising food prices are one of the most pressing factors exacerbating the cost of living, with a 50 kilogramme bag of maize selling at an average K50 000.
Transport prices have also been on the rise due to the shortage of fuel, which has been worsened by shortage of foreign exchange.
Consequently, inflation has averaged 33.8 percent between January and October 2024 compared to 28.8 percent during the corresponding period in 2023.
In an interview yesterday Consumers Association of Malawi executive director John Kapito said consumers will suffer for a long time with these serious economic challenges.
He observed that the challenges, which include the 44 percent devaluation of the kwacha and rising bank lending rates have failed to improve the lives of Malawians, particularly the poor.
Earlier, CfSC said rising cost of living in Malawi has become a growing concern, impacting citizens across the nation.
Reads the report in part: “With the increasing cost of maize, households are grappling with higher expenses that impact their ability to meet their basic needs.
“The burden this places on our citizens is substantial and is a call to action for all stakeholders.”
As part of the food component, maize contributes about 53.7 percent of the CPI, which means any movement in the price of maize has a direct bearing on consumers.
