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MCCCI says business suppressed in 2022

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Lekani Katandula

Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has said businesses in the country failed to recover from effects of the Covid pandemic in 2022 owing to new challenges the economy experienced.

For example, the chamber says businesses registered capacity losses of up to 20 percent in September 2022, stemming from power outages.

This is contained in an MCCCI report titled ‘Assessment of the Business Environment In 2022: The Private Sector Perspective’.

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“The year brought with it new challenges such as demand-supply mismatches especially in the goods market, electricity supply disruptions, devaluation of the currency, cyclones, which affected agriculture productivity, in addition to challenges brought forward from the previous year,” the report reads.

It says the manufacturing sector faced a number of challenges due to difficulties in obtaining intermediate goods and other inputs owing to shortage of foreign currency in the country as well as supply chain disruptions.

It further says inelastic demand for imports such as petroleum products, fertiliser and pharmaceuticals as well as low foreign currency inflows continued to put pressure on the country’s stock of foreign reserves and this exerted dampening pressures on the Kwacha, which was ultimately devalued by 25 percent.

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In an interview, MCCCI President Lekani Katandula said the outlook is bleak as most of the interventions to the challenges were short term.

“The year 2023 may turn out to be a difficult year for businesses depending on the pathway on policy implementation. Most of the strategies which were used to ease the scarcity of foreign exchange, which was one of the major challenges for businesses in 2022, were short-term measures.

“There is an urgent need for the country to find lasting solutions to this malaise. If the issue of foreign exchange is not resolved sustainably in a way that narrows the trade balance by reducing imports and increasing exports, then the situation faced in 2022 may very likely persist next year and it shall worsen even more in the lean season,” Katandula said.

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