Financial sector employees Best rewarded—survey

Findings of a National Statistical Office (NSO)  survey have shown that the financial and insurance sector is the best employer in  terms of compensation of employees.

In its recently published Annual Economic Survey (AES), NSO data on 3 221 profit-making enterprises in the country indicate that between 2018 and 2019 the sector paid on average K13.8 million per employee in 2019 from K12 million in 2018 followed by the Information and communications sector at K4.4 million in 2019 from K4.1 million per employee in 2018.

Compensation of employees is a term used in national accounts and balance of payments statistics.

It refers basically to the total gross salaries and wages paid by employers to their employees for work done during each financial year.

Worst remuneration packages were recorded in the agriculture, forestry and fishing sector with an average of K369 900 per employee in 2019.

However, manufacturing sector (1.9 percent) and human health and social work services recorded a decrease of 2.5 percent in remuneration during the review period.

Regardless, the manufacturing sector employs more people and make the most in capital investments during the review period.

Reads the report in part: “The total employment for all sectors provided was 415 262 in 2019 while in 2018 it was 401 479. The largest employer was manufacturing sector with about 118 500 people in 2019 and 112 150 people in 2018.

“The manufacturing sector made the largest capital investment of K55 billion in 2019 and K49.3 billion in 2018. The same manufacturing sector and financial and insurance sector paid out the largest sums on remuneration in 2019 [K161.8 billion and K160.1 billion respectively].”

During the reference period  from 2018 to 2019, total capital investments,the acquisition of physical assets by a company for use in furthering its long-term business goals and objectives, rose by 20.2 percent from K115.1 billion in 2018 to K138.4 billion in 2019.

The manufacturing sector had the highest share with K49.3 billion of capital investment in 2018 and K55 billion in 2019.

Electricity, gas and water supply sector invested K23.6 billion in 2019 although it invested less in 2018 (K 4.1billion).

The survey said information and communications sector invested K19 billion in 2018 and K19.6 billion in 2019 while financial and insurance sector invested K15.6 billion in 2018 and K16.2 billion in 2019.

The sectors that invested least amounts were education services at K84.8 million in 2018 and K142 million in 2019 and mining and quarrying sector has K85 million in 2018 and K 70.2 million in 2019.

Meanwhile, published Reserve Bank of Malawi (RBM) data shows that although credit to private sector from commercial banks have been on the rise, hitting K1.2 trillion during the third quarter of 2023, the community, social and personal services with K37 billion had the highest expansion.

This was followed by manufacturing with K23.7 billion, agriculture, forestry, fishing and hunting with K16.6 billion, wholesale and retail trade with K9 billion, restaurants and hotels with K2.7 billion and electricity, gas, water and energy with K2.1 billion.

Earlier, Malawi University of Business and Applied Sciences associate professor of economics Betchani Tchereni observed that while the credit spread gives direction as to where the economy should go forward, most of these personal loans are used to acquire goods such as electronics and motor vehicles or sometimes for holidays.

He said: “This is a situation which, on the other hand, is contributing to the worsening depreciation of the kwacha.

“An ideal situation is where we have more investment loans than consumption loans.”

Consumers Association of Malawi executive director John Kapitosaid to create opportunities for people and encourage them to borrow for investment, there isneed to take deliberate steps to establish development banks that can provide loans for investment at competitive rates.

Meanwhile, NSO data shows that wholesale and retail trade sector recorded the highest gross profit of K 452.5 billion in 2018 and K606.6 billion in 2019 and had still held the largest share of enterprises at 9 042 which is 47.5 percent of the total enterprises followed by real estates activities and other business services (12.2 percent).