Renowned economist, who once served as secretary to the treasury, Ronald Mangani’ has warned that Malawi‘s economy is still among those trending towards fragility and failure, with no self-correction mechanism in sight.
Mangani, an Economics Professor at the University of Malawi, said this at the weekend when he presented a paper at the Institute of Chartered Accountants in Malawi (Icam) conference when he presented a paper titled ‘Remodelling the Economy into Shape: The Economic Chisels We Need’.
His concerns come as Malawi is still vying in the category of war-torn countries as the world’s poorest.
During his presentation, Mangani said economic growth has slowed down over the past decades, with poverty levels rising.
The argument was consistent with recent statistics, which show that, between 1994 and 2019, Malawi’s annual real economic growth rates have averaged 4.3 percent, within striking distance of the country’s population growth rate.
“Demographic pressure is our biggest risk factor,” said Mangani, while projecting that the population would swell to 44 million people by 2025.
He cited factionalised elite, weak economy and poor public service among key pressure points, while rating Covid as an additive factor to perpetual national crisis.
He reiterated calls for the government to hastily intervene with policy direction towards efforts aimed at industrialising the economy.
He lamented that trade liberalisation killed local industries and jobs and that the ‘Government watched helplessly as the economy nosedived”.
“Tough decisions would have to be made on the role of the state, on financing the private sector investment and monetary policy, on financing public sector investment and on trade and foreign exchange earnings,” Mangani said.
Malawi has had both long and short-term development blueprints which have measurably failed to elevate the economy.
For instance, the Vision 2020, which expired last year, was coined to direct the country towards reducing poverty but above 50.7 percent of the population are still living below the poverty line of $1.90 per day while 25 percent live in extreme poverty.
Experts’ reviews of the blueprint exposed Malawi’s inability to achieve a middle income status with a per capita income of $1,000 (about $780,000) per year.
Mangani said reversing the trend would take concerted efforts with the government still required to set the tone.
“The worsening trend of fragility and impoverishment will not correct itself,” he said.
Speaking during opening of the Icam indaba earlier, Vice President Saulos Chilima called on accountants to join in the transformation of the country.
He said the task of rebuilding the economy should be championed by disciplined professionals.