Experts doubt growth outlook
Some economic experts have cast doubt over projections that the local economy would grow next year by 4.5 percent as the second wave of Covid-19 pandemic takes its toll.
This comes as chances of meaningful gross domestic product (GDP) growth this year were shuttered by effects of the pandemic, leading to a downward revision of GDP growth to 1.9 percent, down from a pre-pandemic estimate of 5.5 percent.
With the second wave of the pandemic emerging, forcing some big economies across the globe to resort to imposing travel restrictions, there is a higher risk of further subdued business in the country.
A local economic think-tank, the Economics Association of Malawi (Ecama), has said the outlook remains mixed and murky.
Ecama President Lauryn Nyasulu said in an interview Wednesday that achieving a 4.5 percent growth rate in the short to medium terms could be a tall order.
She said the projection was premised on an assumption that Covid-19 would have been contained by now.
“We need to make sure that more incentives are provided and priority and determination should be put on agriculture so that we should have a bumper harvest,” she said.
Malawi, an agrarian economy, remains a predominantly consuming and importing nation, highly depending on raw agricultural products for exports.
Despite not registering high number of Covid-19 cases compared to other countries, the local industry has however been hard hit by the pandemic.
In a separate interview, economist from the Polytechnic Betchani Tcheleni said he expected a further slowdown in economic activities especially during first quarter of next year, which would affect growth strides.
“There are enough incentives on the ground but we are failing to utilise those incentives especially from the private sector,” he said.
In its 2020 Africa Economic Outlook released on Tuesday, the bank has projected that, in the baseline scenario, the local economy could swell by 1.3 percent this year and 0.6 percent in the worst case scenario.
AfDB says growth would recover to 2.6 percent and 3.3 percent, respectively, in 2021 buoyed by agriculture, tourism, export receipts and a rebound in foreign direct investments.
The country’s economic growth averaged 4.5 percent between 2009 and 2019, way below the desired average growth rate of 6 percent for the country to meaningfully impact on poverty while triggering development.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.