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Rich, poor gap remains wide

REMAINS WIDE—Proportion of poor by district

Betchani Tchereni

Malawi still has a long way to attain the key aspiration embedded in Malawi 2063 of ‘creating wealth for all’ as the gap between the rich and the poor, as measured by a generic measure called Gini-coefficient, remains wide.

Albeit a slight decline in degree of inequality to 0.379 in the 2019-20 financial  year (FY) from 0.423 in the FY2016- 17, according to figures contained in the recently issued Malawi Poverty Report, the gap between the haves and have-nots remains wide.

Slightly over half of the 18 million Malawians lived in poverty, according to an analysis by the National Statistical Office (NSO), of whom 20.5 percent lived in extreme poverty.

Figures in the NSO report show that 56.6 percent of people from rural areas were poor compared to 19.2 percent in urban areas.

Experts fear that if the situation were not addressed hastily, it could lead to worsening levels of poverty and propel conflict between the rich and the poor.

An analysis by the NSO shows that, based on region, inequality was higher in the Central Region at 0.384 followed by the Southern Region at 0.374 and Northern Region at 0.354.

Speaking last week at the launch of the report, Vice-President Saulos Chilima, who is also Minister of Economic Planning and Development and Public Sector Reforms, reiterated the need for the country to change the narrative, “from poverty reduction” to “creating wealth for all” as a step towards further narrowing the gap.

Malawi University of Business and Applied Sciences economist Betchani Tcheleni Sunday said, if unchecked, the glaring levels of inequality could propel social ills.

He said the country needed to devise innovative ways of, not only creating wealth, but ensuring that it is evenly and equitably distributed among the citizenry.

“The challenge is that the rich are getting richer while the poor are getting poorer. This would affect economic growth prospects and lead to exploitation, especially of the marginalised section of society.

“Malawi needs to work tirelessly towards ensuring sustainable economic growth strides are made at all levels,” Tcheleni said.

Speaking last week at the Institute of Chartered Accountants in Malawi conference in Mangochi, renowned economist, who once served as secretary to the Treasury, Ronald Mangani warned that the Malawi economy was still among countries trending towards fragility and failure, with no self-correction mechanism in sight.

In his presentation titled ‘Remodelling the Economy into Shape; The Economic Chisels We Need’, Mangani said economic growth has slowed down over the past decades, with poverty levels deteriorating.

“Demographic pressure is our biggest risk factor,” Mangani said.

Malawi has had both long-and short-term development blueprints which have measurably failed to elevate the economy and narrow the gap between the rich and the poor.

For instance, the Vision 2020, which expired last year, was coined to direct the country towards reducing poverty but a majority of the population are still living below the poverty line of $1.90 per day while over 20 percent live in extreme poverty.

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