Economists question growth projection

Economists have doubted President Lazarus Chakwera’s projection that the economy will grow by 4.1 percent this year, saying the impact of Tropical Storm Ana and Covid-19 pandemic will largely affect the anticipated growth.

In his State of the National Address (Sona) delivered on Thursday in Parliament in Lilongwe, marking the start of the 2022/23 National Budget Meeting of Parliament, the President said this year’s real gross domestic product (GDP) growth rate is estimated at 4.1 percent up from three percent last year.

Chakwera is banking the anticipated growth on economic recovery measures outlined in the two-year Socio-Economic Recovery Plan (Serp).

“This plan acknowledges that the economy remains depressed largely due to the Covid-19 pandemic and outlines interventions to reinvigorate it,” he said.

But in an interview on Saturday, economist Milward Tobias, who is executive director of the Centre for Research and Consultancy, said Chakwera’s projections are off target because of the devastating Tropical Storm Ana in the Southern Region and persistent Covid-19.

He said the economic recovery plan, which Chakwera touted in the Sona to facilitate economic recovery is now challenged.

Tobias said planned K500 billion recovery budget is now less as there is another crisis from the natural disaster.

He said: “I don’t think the touted recovery is realistic. The recovery plan needs revision because now it means we have to recover from two crises.

“Farmers have to replant and we have to rebuild damaged infrastructure and this puts government recovery efforts in a difficult position.”

Economics Association of Malawi executive director Frank Chikuta said weather-related shocks and pandemics are outside government control.

“To attain such growth figure [4.1percent] depends on what government will do in terms of economic policy measures because reasonable growth figures are attainable depending on policies introduced to attain such projections,” he said.

In his speech, Chakwera said the country’s labour market has recovered to pre-pandemic levels, observing that government now estimates that in the 2021/22 fiscal year, the number of jobs created in both private and public sectors stood at 997 423.

But Employers Consultative Association of Malawi executive director George Khaki said in an interview that the job market is still faced with challenges due to the Covid-19, as such, it has not yet reverted to pre-pandemic state.

“We are yet to get back to pre-pandemic level, the environment remains uncertain amid the pandemic,” he said.

National Planning Commission director general Thomas Chataghalala Munthali said to achieve growth through recovery based on the Malawi 2063, there is need to fix the weak systems as alluded to by Chakwera.

He said the establishment of the Presidential Delivery Unit is a clear manifestation of the President’s frustration about things not moving.

“The partnerships will be key, without fixing what is broken such as governance and corruption then it will be hard to attain the growth path,” said Munthali, adding the Serp is for quick wins.”