The country’s manufacturing sector is expected to grow by one percent in 2023 down from the estimated 1.9 percent last year, the Reserve Bank of Malawi (RBM) has said.
The relatively subdued growth comes at a time Malawi has embarked on an ambitious journey of becoming a lower middle income economy by 2030 as espoused in the first 10-year Malawi Implementation Plan.
It also comes at a time the industry continues to struggle to import crucial raw materials in the absence of foreign exchange.
In its Report and Accounts for the Year Ended December 31 2022, the central Bank says the 2023 growth in manufacturing is on the assumption of a corresponding growth in the energy sector following the resumption of electricity generation at Kapichira Power Plant, and improvements in the foreign exchange situation.
RBM says growth of the sector last year was affected by foreign exchange shortages, intermittent power supply and low production in the agricultural sector.
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“The sector was also affected by fuel shortages that resulted in delays in transportation of raw materials and distribution of products.
“The fuel crisis also exacerbated the already existing intermittent power supply for businesses that use generators as an alternative power supply in times of black-outs,” the report reads.
Malawi is an agro-based economy with agriculture contributing about 28 percent to the GDP.
According to RBM, the agriculture, forestry and fisheries sector is also expected to grow by 1 percent this year up from 0.9 percent last year.
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Last year, growth of the sector was affected by reduced production under large scale agriculture on account of adverse weather conditions including Cyclone Ana, which greatly affected production of crops including tobacco.
Strong growth is expected in mining and quarrying, with the sector projected to swell by 3.3 percent this year from 2.5 percent last year.
In recent months, President Lazarus Chakwera has been advocating strong growth in three priority areas of agriculture, tourism and mining in what he has been describing as the ATM Strategy.
