World Bank tips Malawi


The World Bank has said Malawi needs to prudently balance its efforts on careful macro-economic management and meeting humanitarian needs if the country is to recover economic growth in 2017 and withstand the impact of future weather-related shocks.

World Bank Senior Country Economist, Richard Record, made the observation in Mangochi, yesterday, when he launched the fourth edition of the Malawi Economic Monitor (Mem 4) titled Emerging Stronger during the 2016 Economics Association of Malawi (Ecam) annual conference.

Record said in 2016, Malawi is expected to record a growth rate of just 2.5 percent due to two consecutive years of drought which adversely affected agricultural growth, a major factor in Malawi’s economy.


“To recover in 2017, the country needs to implement and stay the course on a number of politically challenging reforms. To build resilience, policy and institutional reforms will be required to eliminate the policy-induced distortions that exacerbate agricultural and climate vulnerability.

“It is also necessary to improve macroeconomic governance to increase fiscal buffers and to restore the confidence of other stakeholders,” Record said.

The report says to facilitate economic recovery in 2017, policy reforms should be made to reduce distortions and to ensure that agricultural markets function more effectively, such as more transparency and predictability in public sector institutions that manage commodity markets.


“Malawi also needs to control inflation and restore basic macroeconomic conditions necessary for investment and job creation by reducing fiscal deficits, over borrowing and the crowding of the private sector.

“Further, Malawi needs more investments to build resilience against climate induced weather shocks such as agricultural infrastructure and extension services to facilitate crop diversification,” Record said.

Although in recent years Malawi made encouraging progress in terms of human development, the achievement of sustained poverty reduction in rural areas has been difficult, remaining unchanged at 56 percent with widespread food insecurity.

The report, therefore, suggests several measures to build the resilience of poor rural populations and help them emerge stronger against climate extremities.

“These include balancing expenditure on the agriculture sector so it is not skewed towards farm input subsidies only, coupled with increased agricultural productivity. Government also needs to improve the efficiency and effectiveness of social safety nets programmes by improving targeting and reducing leakages,” Record said.

World Bank also notes that Malawi’s unchecked population growth is putting pressure on the limited land resources and delivery of services which in turn exacerbates poverty.

It, therefore, recommends implementing measures that facilitate a reduced fertility rate.

The Mem4 is a series of biannual reports that provide an analysis of economic and structural development issues in Malawi with the aim of fostering better informed policy analysis and debate

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