Reserve Bank of Malawi (RBM) Governor Dalitso Kabambe says Malawi’s per capita gross domestic product (GDP) remains ‘very low and flat’ compared to other countries in the world.
The governor has blamed the situation on rapid annual population growth rate at 2.9 percent.
He also said Malawi remains with a huge section of the population trapped in abject poverty as the little output that the country is producing in terms of nominal GDP is thinly shared or spread among the estimated population of 17.6 million Malawians.
Kabambe said this on Friday afternoon at Sunbird Nkopola Lodge in Mangochi when he officially opened the 2019 Annual Lakeshore Conference of the Economics Association of Malawi (Ecama) which was convened under the theme Population Growth-Challenges
and Opportunities for Economic Development in Malawi.
“Our per capita GDP has permanently remained flat since independence [in 1964] while other countries have made huge strides in terms of realising high per capital GDP. If it was a race, we could say we are now tired,” he said.
A country’s per capita GDP is derived by dividing its nominal GDP by its population size.
Currently, the World Bank estimates that Malawi’s nominal GDP is valued at $7 billion (about K5.3 trillion) against a population of 17.6 million, hence a per capita GDP of around $400 (K304 000) per person per year.
At $400, Malawi’s per capita GDP is far less than that of neighbouring Zambia, which is valued at around $1 600 (about K1.2 million) as well as that of Tanzania valued at $1 090 (about K828 400) per person per year.
“The annual population growth rate of 2.9 percent against an average economic growth rate of 4.4 percent for the past 55 years implies that the nation’s wealth accumulation is at a snail’s pace,” Kambambe lamented.
Commenting on the impact of rapid population growth on labour market dynamics, Kabambe noted that due to the current demographics where 51 percent of the population are youths below the age of 18 years, every year, there are large numbers of people that are entering the job market at various levels, while the economy is failing to generate sufficient jobs for all.
Speaking earlier, Ecama executive director Maleka Thula observed that Malawi’s population is growing faster than the economy, adding that the situation is putting too much strain on the part of government as it is obligated to finance for basic social services to cater for a growing population. Although Malawi has reduced fertility rate to 4.5 births per 100 women, its population is set to double in 23 years, from just under 18 million people presently to over 40 million people by 2040, according to available statistics.