Low income earners in the country’s cities will continue to face economic challenges as the gap between the cost of living and what they get at the end of the month is still too wide, Lilongwe faith-based socio-economic organisation, Centre for Social Concern (Cfsc) monthly report reveals.
Cfsc, in its Basic Needs Basket (BNB) for July, reveals that average national cost of living between June and July has increased by 0.26 percent from K160 660 in June to K166 086 in July.
The firm says this rise in cost of living will continue during the time of acute food shortage, especially the staple grain since it is part of food that accounts for about 50.2 percent in the consumer price index (CPI), an aggregate basket of consumer goods and services.
Following movements of maize prices in May, Malawi’s headline inflation accelerated to 22.6 percent year-on-year in June from 21.5 percent in May to hit 23.5 percent in July.
Cfsc has urged government to promote the development of agro dealers and agents in rural areas who would in turn better serve smallholder farmers by putting agricultural inputs within easy reach and at a reasonable cost, so that there is improved agricultural productivity.
It added that this can attract the private sector in Malawi to develop the small to medium enterprise (SMEs) sector in the fertiliser value chain so that focus is on smallholder farmers and agro dealers.
“Smallholder farmers hold the key to feeding Malawi, but their productivity is challenged by poor access to inputs and even effective markets for their produce,” reads the report in part.
Weighing in on the report, Catholic University’s head of economics Gilbert Kachamba in an interview on Tuesday said it was not shocking that the cost of living keeps rising as Malawi is reeling from the maize deficit.
He said this calls for government to put in place measures to address the food crisis in the long-term.
“Though not surprising, it is disturbing to see that while cost of living is going up, peoples’ monthly income has remained constant.
“Instead government is taking about 30 percent in form of taxes from the little that Malawians are earning. This means Malawians will have to continue to dig deeper in their pockets to survive,” Kachamba said.
He said in the current situation, government needs to look into short-term solutions to ease the burden that Malawians are facing.
Government last reviewed minimum wage in October last year to K687.70 from K551 per day, about K20 000 in a month.