Economics Association of Malawi (Ecama) has warned that the delay to move away from reliance on rain-fed agriculture puts the country’s economy at the mercy of the environment, dampening agriculture’s contribution to the gross domestic product (GDP).
Ecama president Bertha Bangara-Chikadza’s remarks come at a time agriculture’s contribution to the country’s GDP has dropped to 22 percent from around 30 percent 10 years ago crippled by climate change-induced perennial disasters.
For instance, the agriculture sector has shrunk by -0.2 percent this year due to the impact of El Nino from a 0.5 percent growth last year, according to National Statistical Office (NSO) data.
The data, which analysed real GDP growth developments since 2017, indicates that the economy has failed to grow since 2020 due to low agriculture productivity.
The data also shows that although the GDP growth
rose steadily from 2017, it slowed in 2020 due to low agricultural production as well as Covid-19, registering 0.8 percent growth.
In an interview on Monday, Bangara-Chikadza said the situation is risky as over-reliance on rain-fed agriculture puts the economy at the mercy of the environment.
“This means that if the weather is not good in a year or two, this affects our exports, affects the foreign exchange we earn from exports, affects the food production needed for the country, raises inflation and destabilises the economy,” she said.
Bangara-Chikadza said studies show that mining can contribute more to GDP than the agriculture if government makes necessary investments.
Apart from the 2021’s post-pandemic reopening relief, climate change-related low agriculture productivity resulted in less than two percent GDP growth in each of the next three years, according to NSO.
However, agriculture has remained a major contributor to GDP followed by manufacturing at 11.5 percent, wholesale and retail trade at 11.1 percent and real estate at 6.6 percent, according to NSO.
Reads the NSO report in part: “These key industries continue to shape the foundation for Malawi’s national economic planning and development. This pattern has persisted for years, with agriculture consistently holding the largest share.”
Agriculture economist Horace Phiri said in an interview on Monday that agriculture will continue being the backbone of the country’s economy, as such, there is need for huge investments to make the sector resilient from such climatic shocks.
“A resilient agricultural sector means a more resilient economy for Malawi. Well-crafted strategies are already in place and let us make sure that we walk the talk by financing the initiative so that we see results,” he said.
Malawi is an agro-based economic with the agriculture sector contributing about 75 percent to foreign exchange earnings and employing millions of people along its value chain, according to NSO.
