By Bendaetta Chiwanda Mia:
The Economics Association of Malawi (Ecama) indicates that recent revelations that the local economy continues to shrink will lead to a divergence in economic performance between Malawi and its neighbouring countries in the region.
This follows recent projections by the Reserve Bank of Malawi (RBM) that the economy is expected to grow by 1.8 percent in 2024, which is 0.1 percentage points lower than the 1.9 percent growth for 2023.
It is also 4.2 percentage points below the 6 percent annual growth rate Malawi aspires to achieve if it is to attain middle-income status by 2030.
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However, the central bank believes that the local economy will rebound in 2025 with a projected 4 percent growth.
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Ecama’s sentiments were shared during a webinar on the economic outlook for Southern Africa, focusing on Malawi, Zambia, Zimbabwe and Mozambique, co-organised by the Association and Oxfam.
During the webinar, it transpired that Mozambique’s economy was seen growing by 4.5 percent by June 2024 and is expected to grow by 5.5 percent in 2025. Zimbabwe is expected to grow by 2 percent in 2024, and rebound with a 6 percent growth in 2025, whereas Zambia is projected to grow by 1.2 percent in 2024 and jump by 5 percent in 2025.
Making a presentation, Ecama member Wytone Jombo highlighted the impact of fiscal imbalances, exchange rate misalignments and drought on Malawi’s economy, recommending policy interventions to restore economic stability and entice growth.
“We need to strengthen agricultural resilience, effectively implement export strategies like the National Export Strategy II to boost foreign exchange earnings and ensure policy consistency between monetary and fiscal policies,” Jombo said.
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Economic expert Alick Nyasulu stressed the importance of robust governance systems to create a favourable environment for businesses and investors.
“We need a business-friendly regulatory framework to reduce operational costs and attract investors.
“We must position ourselves as an attractive destination because the global market demands high-quality products,” Nyasulu said.
Malawi Economic Justice Network Executive Director Bertha Phiri urged for clear investment frameworks that outline investor obligations alongside rights to support Malawi’s economic advancement, warning that without accountability, corporations could exploit power to silence the authorities and maximise profits at community members’ expense.
Malawi’s economy has struggled to gain ground since the downturn of 2022, when it grew by 0.9 percent.
