By Kingsley Jassi:
Principal Secretary for Economic Planning and Development Kisu Simwaka has said Malawi cannot achieve higher-income status if its economy remains driven by consumption rather than production.
Simwaka, a former Deputy Governor of the Reserve Bank of Malawi, said countries could not transition from poverty to prosperity when they consume more than they produce, with imports continuing to outweigh exports.
His concerns come amid growing questions over Malawi’s development trajectory, with the National Planning Commission (NPC) recently raising concerns over the lack of national commitment to driving economic growth.
Simwaka’s remarks add to mounting concerns, including from within government institutions, over the sustainability of Malawi’s current economic model and the need to shift towards production-led growth.
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Writing on his Facebook Page, Simwaka said countries that were at the same level as Malawi had managed to break through to middle income status after transforming their economies through consistent growth-oriented policies.
“Every single nation that has successfully climbed out of poverty did so by doing a few basic, structural things right – day after day, year after year, for 20 years. It takes consistent hard work and, above all, it takes absolute discipline,” Simwaka said.
He questions Malawi’s resolve in development, citing a number of development plans that have failed previously, including the Vision 2020, Malawi Growth and Development Strategy I, II, and III.
“Now we have [the] Malawi 2063 [vision].
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The shelves are full of beautifully written documents but what make things different today are our demographics. The arithmetic is staring us in the face. Malawi will add 20 million more people by 2063.
“We are not planning for a small country of 20 million anymore. We are planning for a population of 50 million. That is not a distant problem; it is a present fiscal problem, a present monetary problem,” he said.
National Statistical Office (NSO), in its Malawi Expenditure report—which covers the period between 2017 and 2025—shows that the economy has been driven by consumption, with imports continuously dragging the economy.
“Final consumption remained the largest expenditure component throughout the period, increasing from K6.39 trillion to K10.36 trillion (at constant 2017 prices),” the report reads.
With the country’s dependence on imports, this has been creating pressure on the structure of the economy, hence the current imbalances—which are characterised by forex shortages, inflation and growth constraints while population growth is not slowing down.
On its part, the NPC also questions the country’s lack of investment in the productive sectors to grow the industrial base, which is too weak to support the economy.
