Zomba inflation at 60.6 percent

Malawi’s old capital, Zomba has recorded one of the highest inflation rate at the highest in June at 60.6 percent, an indication that the newest city suffered the worst increase in the general rise of prices of goods and services in the period.

According to the National Stitistical Office (NSO) July 2013 monthly statistical bulletin, national inflation rate stood at 27.9 percent, urban at 37.1, rural at 26.5 percent.

Lilongwe’s inflation came second among the cities at 49.6 percent, Mzuzu at 46.4 while Blantyre came last at 24.8 percent.

Last year during the same period, according to the bulletin, Zomba also had the highest inflation at 62.7 percent, Mzuzu at 50.5, Lilongwe at 50.3, while Blantyre had the lowest at 27.4 percent.

Commenting on the development, Economics Association of Malawi (Ecama) executive director Nelson Mkandawire, in February this year said the high inflation in Zomba has serious implications on businesses and growth of the new city.

He noted that this indication means that consumers’ incomes are heavily eroded, thereby, affecting business activity. He further argued that investors will run away from the city and invest where costs are lower conversely investors will not be attracted into the city.

He urged government to curb the situation by providing some mitigating measures because inflation in Malawi is mainly driven by food costs.

Late last year, Chancellor college professor of economics Ben Kaluwa while explaining the high inflation in Zomba, noted that people in the city pay the cost of having no manufacturing industries.

But responding to a questionnaire on Thursday, Ministry of Industry and Trade spokesperson Wiskes Nkombezi in an e-mail pointed out that government creates a conducive environment for industrial development, but the private sector makes a final decision to invest in that particular locality.

“Investors look at market size, profitability, transportation costs, sources of raw materials, and cultural values of the place. However, under rural industrialisation, all the districts in the country including Zomba, will be profiled where their potential in terms of industrialisation will be unearthed and then sold to potential investors,” said Nkombezi.

Ministry of Economic Planning and Development spokesperson Jollam Banda responding to a questionnaire in an e-mail on Thursday noted that government is implementing a number of projects including the construction of the Blantyre-Zomba and Zomba-Phalombe roads to improve the situation.

“A developed transport infrastructure reduces lead time for imports and exports, costs of goods and services, and improves access to markets and social services. Zomba has high potential for irrigation and the government is promoting increased agricultural production by rehabilitating irrigation scheme in Zomba,” said Banda.