The African Development Bank (AfDB) has projected modest growth for the Malawi economy within the next two years, pegging it at 5.2 percent in 2020 and 5.5 percent in 2021.
The projection is up from 5.0 percent in 2019.
In its annual publication, the African Economic Outlook 2020, AfDB says GDP growth prospects for the next few years are positive, due to the rebound in agriculture and improved electricity supply from the Zambia–Malawi interconnector.
The pan-African bank says this is also supported by prudent policies, improved external financing, favourable terms of trade and increased investments in connectivity infrastructure along major trade corridors.
Malawi’s growth was robust in the first half of 2019, supported by improved agricultural performance.
“Growth will be reinforced by continuing macroeconomic stability,” says AfDB in the report.
The Reserve Bank of Malawi projected a real GDP growth of between 5.0 and 6.0 percent in 2020 owing to further recovery in the agriculture sector as well as favourable macroeconomic conditions.
In an interview yesterday, Chancellor College professor of economics, Ben Kalua, said the 5.2 percent growth outlook is attainable in 2020 but growth might be subdued in the medium term.
Kalua cited political impasse, energy woes and slow growth of the manufacturing sector among key constraints to sustainable growth.
“Energy challenges would affect growth strides if not addressed. This is a problem in most African economies,” Kalua said.
In recent years, there has been debate on variations in economic growth prospects for Malawi with commentators also wondering if the country has been doing enough towards attaining long term sustainable growth.
Malawi has registered an average 3.5 percent economic growth in the past five or so years, a rate not enough to bail it out of its current poverty levels.
Malawi is competing with the likes of Burundi, Niger, the Democratic Republic of Congo and the Central African Republic to be officially the world’s poorest country in terms of per capita income, which was under $500 (in real terms) in 2018.
Statistics show that Malawians are three times poorer than Zambians.
Yet Zambians, who in 2017 earned $1,635 per person (around the sub- Saharan African average), are already very poor by global standards, where the average income was over $10,600.