A recent financial and economic review published by the Reserve Bank of Malawi (RBM) has predicted growth in the manufacturing sector of 5.6 percent in 2021.
According to the report, in 2020, the sector grew by 1.2 percent from 5.1 percent in 2019.
It says the sector has experienced logistical challenges due to importation restrictions which affected the importation of inputs as well as exportation of goods as neighbouring countries closed their borders as one way of containing the Covid-19 pandemic.
“While the overall growth of the sector has declined, some sub-sectors registered a significant increase in growth due to the pandemic. For example, demand for plastics, sanitisers and campaign materials entailing increased growth for the concerned subsectors; hence, the 1.2 percent growth” the report reads.
In an interview, Director of Business Environment and Policy Advocacy at the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) Madalitso Kazembe said the sector was likely going to rebound in 2021 but it could be too early to determine the margin.
“The sector may grow better than 2020 because last year was like a shock to the system and now companies have found ways of navigating or managing the shock. So it could grow but I am not sure whether that margin is realistic or not I would have loved to see the variables that have led to such a projection,” Kazembe said.
In an earlier interview Chibuku Products Limited Business Development and Corporate Affairs Manager Gloria Zimba said 2021 looks promising.
“The year 2021 looks positive and we continue to engage government through the Ministry of Trade and the Malawi Revenue Authority for some considerations in terms of taxation because we still believe taxes in Malawi are very high compared to our neighboring countries for example Zambia opaque beer is at 7 percent, Mozambique 3 percent, South Africa and Zimbabwe zero percent but in Malawi we are paying 30 percent excise [duty] on alcohol,” Zimba said
The Polytechnic-based economist Betchani Tcheleni said economic activities may pick up in course of this year, with potential for reasonable growth.
“By now we have learnt how to live with Covid-19 and there are promises of vaccines. So, it is promising that economies in the world will get back to work and also, seeing that the government has struck bilateral and multilateral deals, we may see a good year,” he said.