Agro output on downward spiral
The agriculture, forestry and fishing sector, which is considered the backbone of the Malawi economy, has registered subdued growth in the past four years, a government report has shown.
The report shows that agro output is projected to register a 0.9 percent growth in 2022, a decline from 3.8 percent and 3.4 percent growth in 2021 and 2020 respectively, from a high of 5.9 percent growth recorded in 2019.
The 2023 Annual Government Economic Report has attributed the subdued growth in 2022 to adverse weather conditions such as the late onset and early cessation of the rainy season and the occurrence of cyclones.
Said the report: “Moreover, the Russia-Ukraine crisis and the foreign exchange shortages made it difficult to source the necessary agricultural inputs, which resulted in reduced production in crops such as maize and tobacco. These primary crops require heavy application of fertiliser and pesticides”
According to the report, in 2023, growth in the agriculture, forestry and fishing sector is projected to slow down, growing by 3.5 percent based on the expectation that the sector will experience good weather conditions in the 2022/23 season, which would boost large and small-scale crop production.
Government is also banking on investments in Mega farms to help to improve production in the sector in 2023 and going forward.
In an interview, an agricultural expert Tamani Nkhono-Mvula has observed that high dependency on primary crops and management of incentives has led to the decline in the sector’s performance.
“If you look at the level of investment that we have been making over the past two years or so, it has greatly increased but the output is low. This is attributable to the changes in weather patterns, how we are managing subsidies as well as other shocks such as fall army worms which have dealt the sector a heavy blow in recent years,” he said.
According to Nkhono-Mvula, the incentive structure in as far production is concerned, has also impacted negatively on the sector.
Similarly, growth in other critical sectors such as manufacturing also declined in 2022 compared to the previous year when, for instance, the sector’s growth fell from the 7.6 percent attained in 2019 to 0.7 percent in 2022, according to Treasury The growth rate for the manufacturing sector is, however, estimated at 2.7 percent for 2023.
Malawi Confederation of Chambers of Commerce and Industry (MCCCI), in its assessment of the economy in 2022, also indicated that the environment was largely suppressed owing to imported supply disruption caused by the Russia-Ukraine war and unfavourable agricultural weather conditions, including tropical storms and cyclones.
Meanwhile, Minister of Finance and Economic Affairs Sosten Gwengwe, admitted that growth in 2022 was challenged by intermittent energy supply and weather-related shocks which reduced agricultural output.
“Going forward, the economy is estimated to grow by 2.7 percent in 2023 due to expected high yield in agriculture, stabilisation of energy supply and increased output in other economic sectors like mining and construction
