Malawi is said to have failed to substantially subdue prevalent inflationary pressures for years as inflation rate has remained stubbornly high and comparatively the highest in the Southern African Development Community (Sadc) Region.
Figures from the National Statistical Office (NSO) indicate, for instance, that inflation closed the year 2010 at 9.9 percent, down from 16.6 percent recorded by the end of 2005.
However, the inflation rate surged again to 24.6 percent by the end of 2015, before easing by 4.7 percentage points to 19.9 percent as at end November 2016.
Despite the relative ease of inflation pressure in the last four months of 2016, at the current rate, Malawi inflation remained the highest among all Sadc countries.
Analysts fear the country has not done enough, and as anticipated, in easing the pressure in the past 10 years.
Economic think-tank, Malawi Economic Justice Network (Mejn) Executive Director, Dalitso Kubalasa, said despite differences in dynamics and fundamentals over the years, cumulatively, inflation has remained “unnecessarily” high.
“Taming inflation has remained a challenge in recent years, and it (inflation) has really been stubbornly high,” said Kubalasa in an interview.
He called for caution and further recommended an improvement in productivity, saying, managing the spiral would largely depend on efforts deployed by the system.
Recently, Reserve Bank of Malawi (RBM) Governor, Charles Chuka, told journalists that efforts, including implementation of a tight monitory policy, would ensure continued ease in inflation in the coming months.
He estimated the rate to edge up slightly to 22.7 percent in February 2017, before decelerating to 18.6 percent in June 2017
However, while commending the efforts, Kubalasa attributed the slight improvement to seasonality and improved availability of maize, which has eased pressure on the food basket.
“Of course, there have been efforts by RBM in the recent past and this is a positive trend. If everything else remains positive, we should see a drop in inflation,” conceded Kubalasa.
In a separate interview, consumer rights activist and Executive Director of the Consumers Association of Malawi (Cama), John Kapito, said the negative trends have had a pinch on the general populous.
He said the inflation trajectory can be attributed to several factors, among them poor management of the food basket, upsurge in fuel prices and continued kwacha depreciation.
He said weakening of the buying power, for instance, has had a knock down effect on consumer welfare in the years, warning that this may remain prevalent in the coming months.
“Most of the people have no jobs and the income levels will remain lower, [and] that will influence the figures to go up.
“There has been massive depreciation of the kwacha and the future, based on the current indicators, looks bleak as the Kwacha continue to suffer,” said Kapito.
He said there is “nothing holding food prices” because inputs have gone up substantially, a development which poses a threat to future trends.
Recently, the International Monitory Fund (IMF) reiterated that Malawi’s inflation rate remains high, urging authorities to tighten further both fiscal and monitory policies.