Malawi slumps on export performance—World Bank

 Malawi has slipped in many macroeconomic facets comparied with its peers, losing some positions in areas such as export performance, according to a new World Bank report.

The report titled ‘A narrow path to prosperity’ sets 5.1 percent average annual growth rate between 2024 and 2063 if the country is to achieve the inclusively wealth and upper-middle income economy.

But this ambitious target is challenged by the country’s declining levels of productivity, especially in the primary sector of agriculture while investments are also low against the need to invest half of the current gross domestic product (GDP), according to the report.

The Bretton Woods institution report looks at a group of peer countries; namely Burundi, Madagascar, Niger, Uganda and Zimbabwe, who have become poorer than they were in the 1990s.

Reads the report in part: “While Malawi’s per capita GDP has increased by half since 1990, some otherwise structurally similar countries have grown by at least 150 percent during the same time.”

The bank observes that shifts associated with structural transformation have only proceeded slowly in Malawi, yet such transformation is evident in rapidly developing countries where more people migrate from agricultural self-employment to higher paying industrial jobs.

Malawi’s export performance has been on the decline in recent decades as compared to the 1990s when the country was ahead of regional averages and those of structural and aspirational peers, according to the bank.

“This relationship was reversed, with Malawi exporting less than 40 percent of the output that is typical for an African country.

University of Malawi associate professor of economics Winfred Masanjala said the country’s industry started to collapse in the 1980s when the State-led industrialisation was challenged by governance glitches and mismanagement of State-owned enterprises.

Mwapata Institute executive director William Chadza said in an interview that the country’s low agricultural productivity is as a result of low capacity of smallholder farmers, calling for more efforts to turn things around