MCCCI’s economic review spells doom
The private sector is wary of the economic environment in the short to medium term citing great risks which are expected to undermine the economic forecasts for Malawi
A 2019 third quarter economic review issued by the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) on Tuesday, highlights challenges such as weather risks, ongoing electoral case and the need to strengthen economic governance.
It further highlights that global economic growth which creates demand for local exports remains subdued but also debt vulnerabilities remain high with total debt recorded at 60 percent of Gross Domestic Products (GDP).
“The business performance is subject to all these risks and other historical challenges such as inadequate electricity, uncertainties in economic and regulations, among others,” reads the review in part.
In its analysis of the current fiscal plan and performance in the past five years’ the confederation holds that the statistics that government has been bragging about do not present a period of successful economic management.
MCCCI argues that the success of any economy is primarily measured by an increase in the wealth created such as GDP growth however developments in the local economy have not led to improvement in economic growth.
“The Malawi economy has been able to grow at impressive rates before, such as 9 percent a decade ago, and yet during the period under consideration, the country did not get any closer to such growth rates. MCCCI attributes this economic growth record partly to the persistent obstacles to doing business which are yet to be resolved,” reads the review.
MCCCI Head of Communications, Milllie Kasunda, added that the industry has faced challenges that have consistently chocked business operations.
“The industry continues to face inadequate and erratic supply of electricity, high cost and unavailability of long-term finance, uncertainty in economic and regulatory policies, quality and cost of telecommunication services and high levels of corruption. These challenges were not resolved during the period under review,” Kasunda said.
Malawi forecasts growth at 4 percent in 2019 and 5.1 percent in 2020.
The review also notes some positive developments made in the economy during the period such as single digit inflation, stable exchange rates and reduced interest rates.
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