Malawi’s average annual inflation rate closed the year 2024 at 32.2 percent, a 3.5 percentage points rise from 28.8 recorded the previous year, highlighting how consumers struggled to afford basic needs.
For consumers such as Godfrey Mainja of Chinseu residential area in Ndirande Township in Blantyre, rising commodity prices have made life tough as he can not afford basic needs.
“We have been forced to adjust our budgets again and again, but we still do not see light at the end of the day,” said Mainja in an interview yesterday.
Samantha Tebulo, who operates a restaurant in the same township, said the continued rise in the price of maize flour has been the main challenge for her business.
She said: “Price hikes in 2024 paralysed our business because some customers could not cope with new prices.
“Some customers opted for other alternatives other than buying from my restaurants as they felt the prices were way too high.”
National Statistical Office (NSO) data shows that year-on-year headline inflation for December 2024 increased to 28.1 percent from the 27 percent the previous month, largely attributed to rising food prices, which elevated food inflation to above 40 percent throughout the year.
Reads NSO December Stats Flash: “Food inflation now stands at 35.6 percent from 33.7 percent observed in November 2024.
“Non-food prices, while still increasing, have registered a decline in the rate of increase from 17.2 percent to 16.8 percent over the same period.”
In an interview yesterday, Consumers Association of Malawi executive directorJohn Kapito said the continued rise in inflation highlights the need for authorities to address the issue, which is hurting a majority of people and the economy.
“One wonders why we can continue smiling at these numbers and fail to address the reasons behind the rise in inflation, most of which is our heavy borrowing, careless expenditure and high food prices that can easily be managed with better agricultural policies,” he said.
With the continued rise in inflation rate, the Reserve Bank of Malawi has maintained that it will continue pursuing a tight monetary policy stance.
The central bank has kept the policy rate—the rate at which commercial banks borrow from the central bank as the lender of last resort—at 26 percent.
This has compelled commercial banks to maintain interest rate elevate at as high as 35 percent.
For instance, Patricia Chitedze, a Blantyre-based small-scale business operator and a member of Chamber for Small and Medium Businesses Association is feeling the pinch of rising interest rates.
She secured a K5 million loan from one of the commercial banks in 2021, and she is now paying more to service the loan, largely due to the continued rise in the banks’ interest rate.
RBM spokesperson Mark Lungu said in an interview that there is need for a combination of many factors to solve the inflation monster.
He said: “Of late economies, including Malawi, experienced a number of exogenous economic shocks from rising commodity prices to weather-induced shocks, as such inflation sources have also multiplied.
