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Reserve Bank of Malawi sees strong growth in manufacturing in 2022

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The Reserve Bank of Malawi (RBM) has said it expects the manufacturing sector to expand by 4.7 percent this year.

This is despite the sector being dogged by numerous challenges, such as shortage of forex and frequent blackouts since February when Malawi lost Kapichira Hydro Power Station in the aftermath of Tropical Storm Ana.

In its Financial and Economic Review released on Friday, the central bank says the strong growth in manufacturing will be propelled by spill-over effects from recovery of the global economy.

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According to the review, the manufacturing sector grew by 4.3 percent in 2021, following another growth of 4.2 percent in 2020.

It says the sector’s growth in 2021 was underpinned by increased capacity utilisation experienced by most manufacturing companies as a result of increased demand for domestically produced goods with the easing of Covid restrictions on economic activity.

Looking at agriculture, which is the major contributor to gross domestic product (GDP), the central bank says the sector is expected to grow by 3 percent this year down from 3.2 percent last year.

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RBM has also predicted strong growth in the mining and quarrying sector, at 4.6 percent, mainly on account of anticipated resumption of uranium mining at the Kayelekera Uranium Mine (KUM) during the year.

“The mining and quarry sector grew by 4.5 percent in 2021, following an increase in production of industrial minerals, including rock aggregate and limestone. The development was mainly due to increased demand for the rock aggregate for infrastructure development including construction and maintenance works for roads, bridges and real estate.

“In addition to this, the establishment of the RBM-EDF gold buying initiative resulted in incorporation of most of the gold mined by Malawi Artisanal and Small-scale Mining,” the report says.

Speaking early this month, when the launched the private sector labs, President Lazarus Chakwera said he sees great potential in agri-industrialisation which could be unleashed by unlocking agriculture.

“This agenda of agro-industrialisation is a top priority for my administration in general, and for this lab in particular, because it is what we all agreed to make a top priority for achieving the Malawi 2063 vision of an inclusively wealthy, self-reliant, middle-income economy.

“And it is a top priority for me, personally, because I believe it is the surest and quickest path to achieving the job creation, wealth creation and food security I promised Malawians,” Chakwera said.

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