‘Political impasse to subdue growth’
Continued slowdown in business activities due to the prevailing political impasse in the country is feared to likely outpace recently registered economic gains and affect growth prospects, experts have warned.
There is a general feeling that the continued political and economic uncertainty will negatively impact some businesses and the economy in general.
Speaking in an interview, economic commentator, Sane Zuka, said the business slowdown seen in the recent past would have a huge bearing on economic growth prospects this year.
“We can only hope that by any means, politicians will use this critical juncture to bring sanity to the conduct of government business. That is the only way to heal the economy,” Zuka Said.
African Institute of Corporate Citizenship Chief Executive Officer, Felix Lombe, added that government will keep on borrowing either to finance the forthcoming presidential election or to undertake short-term impulse spending.
He predicted that the situation would pile pressure on inflation and interest rate, among other key fundamentals.
“Key suppliers of government services and goods will be on standby and this will cripple their business, perhaps, for the next months and production will go down and job creation will almost halt,” Lombe said.
Malawi is expected to hold fresh presidential election on May 19 following a decision by the Constitutional Court to nullify results of the May 21, 2019 presidential election.
Since the run up to the 2019 election, the Malawi economy has slowed and the situation was exacerbated by demonstrations that characterised the period after announcement of the election results.
During midterm budget review, Finance, Economic Planning and Development Minister, Joseph Mwanamvekha, raised the 2019/2020 budget by K100 billion from K1.74 trillion to K1.84 trillion.
Ballooning of the budget came despite a weak performance in revenue streams during first half of the fiscal year, which saw tax, non-tax and grants underperforming.
Mwanamvekha said the increase in expenditure has been necessitated by a jump in wages and salaries, security-related expenditures, court case expenditures and probable fresh presidential elections.