The World Bank has said it is likely that Malawi will continue to face economic woes emanating from effects of climate change owing to the country’s over-dependence on rain fed agriculture and lack of economic diversification.
In its recent Economic Monitoring report, the World Bank says a key focus for Malawi going forward should be on measures aimed at improving resilience.
The bank says Malawi is facing a twin crisis arising from vulnerability to climate shocks which, it says, have been made worse by fiscal management challenges.
“The impact of the climate shocks is being manifested in the declining growth rate and worsening poverty outcomes. While the negative effects of fiscal pressures are being indirectly exacerbated by the impact of weather shocks, even without this additional factor, they would be a significant cause for concern on their own,” says the bank.
The World Bank says, however, that Malawi ’s medium-term prospects are positive “if shortterm stabilisation can be achieved”, saying Malawi is well endowed with agricultural, water and mineral resources.
It says Malawi can also benefit from sustained high rates of economic growth which are being experienced by its neighbours which could result into demand for Malawi’s produce.
The report also states that major new infrastructure projects such as the Nacala Rail Line and the proposed Malawi-Mozambique Interconnector have the potential to result in a higher level of integration of Malawi into the regional economy.
Minister of Finance Goodall Gondwe admitted last week that economic prospects for Malawi depend much on good crop harvest.
“With good harvest, I’ll not be surprised if we achieve over five percent growth,” said Gondwe.
He said with good rainfall, he also expects inflation and interests to reduce by May when tobacco would also have resumed contributions to foreign reserves.
Going forward, Gondwe said Malawi should start to reduce dependence on rains for agricultural production as a result of huge investments from Indian and Chinese governments in the Green Belt Initiative to enhance irrigation farming.
“We hope there will be more activities on irrigation agriculture and we intend to move forward like that,” said Gondwe.
The Green Belt Initiative, which is now a public trust, has since been tasked by the government to produce at least one million tonnes of maize and legumes this year.