The African Development Bank (AfDB) projects Malawi’s Gross Domestic Product to grow by four percent in 2016, which is well under the 5.1 percent growth rate announced by President Peter Mutharika when he gave his State of the Nation Address to the current sitting of Parliament
In its African Economic Outlook 2016 released on Monday, the AfDB says the growth outlook is premised on favourable weather conditions, macroeconomic stability, consistency in policy implementation and renewed private sector confidence.
The AfDB has further predicted that growth would accelerate to 4.9 percent by 2017 but this is still 2.1 percent shy of Mutharika’s seven percent GDP projection for 2017.
The African Economic Outlook 2016 themed ‘Sustainable Cities and Structural Transformation’ says Malawi’s population growth of 2.8 percent per annum will require consistent economic growth to reduce poverty and improve progress towards the Sustainable Development Goals.
“Urbanisation in Malawi poses both challenges and opportunities for transformation. The country is one of the least urbanised in the region but the 3.8 percent urban growth rate is higher than the overall population growth rate of 2.8 percent.
“The major challenge is to meet demand for housing and other basic services, despite limited resources. However, urbanisation presents an opportunity if its potential to transform the economy can be harnessed,” reads the statement in part.
With two-thirds of Africans expected to live in cities by 2050, the outlook says how Africa urbanises will be critical to the continent’s future growth and development.
It says Africa’s economic performance held firm in 2015 amid global head winds and regional shocks. The continent remained the second fastest growing economic region after East Asia.
According to the report’s prudent forecast, the continent’s average growth is expected at 3.7 percent in 2016 and pick up to 4.5 percent in 2017, provided the world economy strengthens and commodity prices gradually recover.
In 2015, net financial flows to Africa were estimated at $208billion, 1.8 percent lower than in 2014 due to a contraction in investment. However, official development assistance increased by four percent.