Government silence on energy investment worries Ecama


The Economics Association of Malawi (Ecama) has described as a setback the absence of direct investment into the energy sector in the 2018/19 national budget.

In his budget statement presented to Parliament on Friday, Finance Minister Goodall Gondwe conceded that intermittent power supply is one of the challenges negatively affecting private sector activities.

In the statement, Gondwe painted a gloomy picture of the situation, saying the situation would only stabilise after 2021, mainly banking on the Malawi- Mozambique interconnector.


He could also not give a detailed account of allocations towards energy sector revitalisation in the financial plan.

In an interview Monday, Ecama President, Chikumbutso Kalilombe, said the economists’ body was not amused that the budget could omit the sector amid continued calls from stakeholders for heavy investment therein.

“Possibly, the government is happy and puts all trust in developments taking place in other sectors. However, these need to move fast as, without reliable energy, we cannot achieve meaningful growth.


“The power blackouts are affecting output of the existing industry players, plus we would say it hinders both foreign investment inflows into the economy which [inflows] would have spurred the much needed growth,” he said.

Kalilombe further said the budget seems only to target short-term measures to achieve economic growth.

He said, while it covers some needs of the populace, the financial plan appears, mostly, to be consumption-focused, with little being offered on long-term structures to shape the economy going forward.

“The success of the budget depends on how revenue projections shape up. The minister mentioned projections for revenue growth at above 7 percent up from those of last financial year. We hope we have a strong basis in making such a prediction.

“We are also quite surprised by the assumption that revenue will grow on last financial year considering the challenges that were experienced. We can therefore only hope for the best,” Kalilombe said.

In an earlier interview, Malawi Confederation of Chambers of Commerce and Industry (MCCCI) faulted Gondwe for omitting the private sector in the government’s drive to spar economic growth.

MCCCI Chief Executive Officer, Chancellor Kaferapanjira, said lack of investment in the energy sector would continue negatively affecting businesses in the country.

“The number one problem now is electricity, and the Finance Minister says the problem may stabilise in 2021. We are talking about having a productive private sector; it is only businesses that create sustainable jobs [in this country]. We think that this budget is just a waste of time,” Kaferapanjira said.

Meanwhile, a statement issued by Electricity Supply Corporation of Malawi (Escom) indicates that it is pinning its hopes on the power interconnector and coal power generation.

The statement said, by 2021 and 2022, the country shall have an additional 750 megawatts into the power system from coal power generation and the power interconnector with Mozambique.

According to Escom, the interconnector has a capacity of 2,400 megawatts.

This aside, other projects include 200 megawatts power supply using gas power generation, 300 megawatts from Mpatamanga hydro power plant and 90 megawatts from Songwe bilateral project.

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