The World Bank has projected that about 72 percent of Malawians will continue living below the internationally set poverty line of $2.15 a day in 2024 due to stagnant per capita growth.
This means that the majority of the country’s population will continue wallowing in acute poverty, unable to meet the basic needs.
In its Macro Poverty Outlook, the Bretton Woods institution, however, says a favourable agriculture season supported by improved foreign exchange inflows can support economic activity in 2024, which would improve the trade balance in the short term.
But it says downside risks from El Niño and delayed access to inputs as well as inflation will remain relatively high in the near term and is expected to average 29.2 percent in 2023 while domestic food prices are high and still rising, which will contribute to upward inflationary pressures.
“Successful implementation of fiscal and structural reforms will be key to contain these pressures, and the implementation of external debt restructuring, improved expenditure management and reduced domestic borrowing are essential for easing the public debt burden going forward,” the report reads.
Malawi Confederation of Chambers of Commerce and Industry (MCCCI) President Lekani Katandula said the recent developments, including 44 percent Kwacha devaluation, would push more Malawians into the abyss of poverty as buying power dwindles.
Katandula said inflation is expected to continue rising as the cost of business financing and cost of living rocket.
“To help the masses, the government should put and implement policies that will spur investments and these should be investments that will create jobs so that people are employed and able to cushion themselves,” Katandula said.
Presenting the mid-year budget statement to Parliament on Monday, Minister of Finance and Economic Affairs Simplex Chithyola Banda said the government is already addressing forex, fuel, food and fertiliser availability concerns.
He said addressing the challenges would bring stability to the economy and necessitate growth.
“If we want to recover, we must do radical reforms and there is no alternative to reforms; a do-nothing scenario will only make the economic situation worse,” Banda said.
The World Bank lists Malawi among top 10 poorest nations in the world with the majority of its population struggling to afford and sustain basic needs for them and mostly depend on social cushioning from the government.
