National Bank of Malawi says economic outlook uncertain
Malawi Stock Exchange (MSE)- listed National Bank of Malawi (NBM) has said the country’s economic outlook remains mixed and murky despite registering improvements in some key indicators.
The country’s biggest bank by assets said the viewpoint mainly hinges on the prevalent power crisis which continues to cripple the private sector.
NBM Chairman, George Partridge, said this in Blantyre on Friday on the sidelines of the bank’s 46th annual general meeting (AGM).
He said the energy situation would affect economic growth.
Last week, World Bank said it expects the local economy to swell by 3.7 percent this year.
The growth projection is 0.4 percentage points shy of the 4.1 percent forecast Finance Minister Goodall Gondwe pronounced in the 2018/19 budget statement.
“The forecast has already been lowered mainly because of the challenges the economy is facing. If we cannot solve the power challenges, then we cannot grow even to those levels,” Partridge said.
He said, at the moment, it would be hard to address the energy challenges in short to medium terms, a situation that would continue to affect businesses.
Capital Hill has indicated that the current electricity crisis would be addressed entirely after 2021.
“We are already half year into 2018, and there doesn’t seem to be light at the end of the tunnel in terms of power supply challenges we are currently facing. The generators that have come in are not a solution because they cost three or four times as much as other renewable sources of energy and, therefore, we cannot rely on them.
“It also means that cost structure of our companies would be uncompetitive. The products we are going to produce are going to be more expensive than those which we can import,” Partridge said.
Commenting on the bank’s performance in the year ended December 31 2017, Partridge said NBM showed remarkable resilience.
The bank registered a 15 percent growth in the group profit after tax, from K16.6 billion in 2016 to K19.5 billion in 2017.
“The bank has once again shown remarkable resilience in its performance. We have performed very well considering the operating environment. Also comparing with some other institutions, it is commendable that our bank has performed very well,” Partridge said.
Meanwhile, NBM has declared a final dividend of K4.2 billion, representing K19.3 per share.
One of the shareholders, Frank Harawa, touted the bank’s performance and said the future looks positive.
“National Bank has done very well profit-wise. As shareholders, we are very happy with the dividend payout,” Harawa said.