The Ministry of Industry and Trade has said it is engaging potential investors from South Africa, India and China for investment in the Special Economic Zones project.
The government plans to establish industrial parks in four sites; Chigumula and Matindi in Blantyre, Area 55 in Lilongwe and Dunduzu in Mzuzu, with the aim of turning Malawi into an industrialised economy.
Once it materialises, the project is earmarked to create about 240,000 jobs.
Minister of Industry and Trade Simplex Chithyola Banda said, already, Africa Export-Import Bank (Afreximbank), a pan- African multilateral trade finance institution, has set aside $950 million as capital investment for two industrial parks.
“We have also started engaging other Limited in its July Monthly Economic Report, the EIU attributes this year’s projected lower growth rate to myriad shocks the economy has faced lately.
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“Real GDP growth in 2023 will be undermined by weather shocks, huge funding gaps and a severe monetary tightening shock, depressing real GDP growth to 0.7 percent from an estimated 1.1 percent in 2022 and a rebound to 2 percent is expected in 2024,” the report reads.
The local economy has largely been volatile faced with myriad challenges. Malawi has been affected by a series of shocks—both natural and exogenous—including an outbreak of cholera and Cyclone Freddy lately.
These, and other catastrophes, caused significant loss of life and damage to infrastructure, thereby weakening growth prospects.
But the EIU estimate is by far the lowest.
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The World Bank projected that Malawi GDP would grow by 1.4 percent in 2023 before picking up to 2.4 percent in 2024.
The African Development Bank expects Malawi’s real GDP growth of 2.0 percent in 2023 and 3.5 percent in 2024.
The International Monetary Fund (IMF) has predicted a 2.4 percent GDP growth for Malawi in 2023, as economic growth is set to slow in sub-Saharan Africa.
The IMF’s 2023 growth projection for Malawi is way higher than the 1.6 percent revised GDP growth estimate by the government in the aftermath of Cyclone Freddy from the earlier projected 2.7 percent made by Finance Minister Sosten Gwengwe when presenting the 2023-24 national budget recently.
According to a report by Oxford Economics, the local economy is forecast at 2.1 percent for 2023 compared to 1.3 percent in 2022.
The report suggests serious reforms that should be implemented to keep the economy afloat and offset the impact low economic growth can have on the economy.
“Fiscal consolidation, monetary policy tightening, and reforms that will bring the economy back to a sustainable path are expected to support economic recovery in the medium term,” the report reads.
In its recent Monetary Policy Committee statement, the Reserve Bank of Malawi said economic outlook remains mixed as protracted supply of foreign exchange continued to affect the timely importation of intermediate goods for production.
“This, coupled with the impact of adverse weather conditions experienced during the 2022-23 agricultural season, as well as the lingering effects of the Russia-Ukraine war, has weakened the initial prospects of a stronger growth of 2.7 percent in 2023 to 1.9 percent,” the statement reads.
Local economist from Malawi University of Business and Applied Sciences Betchani Tchereni downplayed the EIU estimate.
“Going forward, EIU may wish to visit places like the Shire Valley, Bwanje Valley and up north to appreciate winter cropping which, if we do more, we will avoid a recession but I am not seeing any recession this year, just slow growth,” Tchereni said.
Economists and development partners have been advising policy makers and implementers to move with speed on projects that will give Malawi quick gains for the immediate growth.
