President Peter Mutharika on Wednesday told potential investors in London, United Kingdom (UK) that the local economy has improved tremendously to the point that local youths are selling cars like bananas along the country’s roads.
Mutharika was delivering a keynote address at the UK-Malawi Investment Forum which attracted many British investors.
“So far, we have made the right policy decisions and taken the right actions. Many positive-minded Malawians are busy pursuing the opportunities we have created and changing their lives. If you come to Malawi today, you will find young men and women selling cars like bananas along the roads in every town. More Malawians can now afford a car more than ever.
“In rural communities and remote villages, young Malawians are buying motorcycles everywhere. As a result, you will find mushrooming filling stations everywhere because we are consuming more fuel than ever. These are visible signs of a changing economy transforming the lives of our people,” Mutharika said.
He said Malawi is growing both at the macro-economic and micro-economic levels, saying the country has a very good macro-economic environment which every investor needs.
“Our inflation has been in the single digit with a stable local currency for the last four years. Inflation was at the average of 8.8 percent throughout 2019. At the same time, we have reduced our interest rate down to 13 percent. By the way, interest rate was 47 percent when I took government in 2014.
“Now we have comfortable reserves of forex that has gone up from two months to six months of import cover lately— the highest in the history of our country. In the past three years, we have registered impressive average growth of 4.7 percent. In 2019, our GDP grew by 5 percent. This is one of the best economic growth records in the world,” he said.
According to Mutharika, some economic commentators have forecast Malawi as the next economic boom in our part of Africa.
“Malawi has a lot of resources and opportunities. Malawi is not a poor country. It is only the people of Malawi who are poor.
As a matter of fact, poverty is an investment opportunity. Let me tell you a story that reminds us that poverty is an investment opportunity,” he said.
In its 10th Malawi Economic Monitor released last month, the World Bank downgraded Malawi’s Gross Domestic Product (GDP) growth outlook for 2019 by 0.1 percentage points to 4.4 percent.
Malawi needs a GDP growth rate of six percent per annum to maintain its current poverty levels and anything above six percent to reduce poverty.
The World Bank says it expects Malawi’s economic growth to gradually increase to 5.0 to 5.5 percent of GDP in the medium term.
“Sustained growth in both the agriculture sector and the energy sector from increased electricity supply are expected to contribute to increased economic activity. However, this outlook is susceptible to the risk of weather-related shocks, with poor rainfall having the potential to affect both agriculture production and electricity supply.
“Further, if the recent political impasse and demonstrations continue, this could also continue to weigh on growth and investment. Thus, there is an urgent need to implement structural reforms to strengthen growth and diversification as a means to increase incomes and job opportunities,” reads the Malawi Economic Monitor.