Ecama tips govt ongrowth, inflation
The Economics Association of Malawi (Ecama) has urged government to commit to structural reforms and investments in human capital to revive economic growthin the aftermath of El Nino.
The advice comes after the International Monetary Fund (IMF) projected in its Regional Economic Outlook released last week that Malawi’s economy will grow by 3.3 percent in 2024.
The fund predicts that the economy will grow further to 3.8 percent in 2025.
The Bretton-Woods institution also expects inflation to moderate from 30.3 percent last year to 27.9 this year before dropping further to 14.7 percent in 2025.
The projections are lower than government’s projection at 3.6 percent of gross domestic product and 23.4 percent for inflation.
Speaking in an interview, Ecama acting president Bertha Bangara Chikadza said she expects adverse conditions, foreign exchange shortages and other factors to continue piling pressure on government spending, fiscal consolidation plans and fiscal deficits in the foreseeable future.
She, thus, urged local authorities to be mindful of population growth and diversify the economy from its dependence on agriculture.
In a WhatsApp response, Chikadza said: “For meaningful poverty reduction, growth must be inclusive with policies that promote job creation, enhance agricultural productivity, and foster small and medium-sized enterprises.”
Speaking in a separate interview, Mzuzu University economics lecturer Christopher Mbukwa said the country’s economic growth still falls below the required threshold to successfully achieve the growth and development goals enshrined in the Malawi 2063–the country’s main development blueprint.
He said: “As such, implementation of the national budget is likely to suffer from low revenue generation arising from low economic growth.
“This will be compounded further by an already heightened inflation rate, reducing the value of the national budget further.”
Agreeing with Mbukwa, market analyst Bond Mtembezeka said he expects the government to have a “tough time mobilising resources because government revenues are dependent on the level of economic activity”, adding: “On the other hand, higher inflation has potential to cause expenditure overruns.”
