Malawi’s economy needs to grow by 14 percent, from an earlier target of 6.4 percent, if it is to achieve its long-term development agenda, Malawi 2063 (MW2063), the National Planning Commission (NPC) has said.
But economists have described it as unrealistic due to numerous factors, including an unstable macroeconomic environment and how the economy has performed in the past five years.
Initially, with the 6.4 percent target, it was envisioned that Malawi could even attain the low-middle-income status by 2030, with a per capita income of between $1 006 (about K1.7 million) and $3 955 9 (about K46.7 million).
In an interview last week, NPC director general Frederick Changaya said attainment of the target would, however, depend on intentional investment.
Changaya said: “There is also a major financing problem. The development budget has been characterised by declining allocations, misaligned priorities and weak execution, leaving a cumulative development financing gap estimated at K4.5 trillion.”
Changaya also said among the major problems hindering progress includes policy inconsistencies with several interventions contained in the MIP-1 remaining inadequately funded; hence, creating a gap between what government plans to achieve and what it actually finances.
He further added that projects are also fragmented with, with little strategic linkage between investments and MIP-1’s different pillars and enablers, while high inflation, debt and forex shortages have constrained productive investment.
In a separate interview, economist Christopher Mbukwa said Malawi needs to reconsider its trajectory, establish realistic targets for 2030 and secure a clear commitment from the current administration to implement them.
“There is no way we can grow at 14 percent. The only thing is that we need to recalculate the new growth pattern and create the new targets,” he said.
Mbukwa said several assumptions underpinning MIP-1 are no longer holding, including the expectation that government would invest heavily in priority sectors and programmes.
Annual national budgets, he argued, are not consistently aligned with the implementation plan, citing wastefulness in public resources, including inefficient programmes, unnecessary travel, corruption and fraud.
He said: “Politics can also undermine development programmes, including financing schemes for small-scale enterprises where beneficiaries should be selected according to business viability rather than political affiliation.
“If we are to give a deserving small-scale business or enterprise, let’s give them not because they are part and parcel of us, but because they deserve it.”
Centre for Social Accountability and Transparency executive director Willy Kambwandira in a separate interview said achieving the 14 percent growth rate will require political will, strengthening of accountability mechanisms and taking firm action against corruption.
Kambwandira said weak accountability and corruption undermines the use of public resources and could derail efforts to accelerate economic growth.
MW2063 aims at transforming Malawi into an inclusively wealthy and self-reliant, industrialised upper-middle-income country that can fund its development needs by the year 2063.
The development blueprint succeeded Vision 2020, launched in 1998 with the goal of transforming Malawi into a technologically-driven middle-income economy by the year 2020. The vision flopped.
