The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) says despite the economy registering stability last year, most of the industries have been operating below capacity due to insufficient energy.
MCCCI president Prince Kapondamgaga in an interview said as a result, industries failed to meet production demand.
He said: “In 2018, we saw the macroeconomic fundamentals improving, and it would be expected to have good business performance, but that has not been the case. I would say industries operated below 50 percent capacity as a result you couldn’t expect greater output.
“Bearing in mind that most of our industries are agri-based, it meant that businesses were affected by the challenging agricultural season that we had. So, with low interest rates, low inflation and forex availability and other improvements in the economy, you would expect companies to go and borrow from banks, but they couldn’t because they borrow for production, which was being challenged by low agricultural productivity and low energy production.”
However, Kapondamgaga hoped that this year energy challenges would improve, bearing in mind the interventions that are being taken to address the problem.
Kapondamgaga said industry also expects government to manage the fiscal side in this election year, adding that based on previous trends, government expenditure was not being contained.
Minister of Finance, Economic Planning and Development Goodall Gondwe recently admitted that the budget is currently constrained as it has a deficit that has recently been compounded by the withholding of K60 billion budgetary support from the World Bank.
Last week, Electricity Generating Company (Egenco) spokesperson Moses Gwaza insisted that the current improvement in power supply will be sustained.
He said measures have been taken to manage debris that affect power generation and that increased water levels in the Shire River improved the hydro power generation output from around 188 megawatts (MW)to 230 MW and with 50 MW generated from diesel generators the country has a combined 280 MW.