The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has painted a gloomy outlook for businesses this year, saying the environment is still depressed due to the Covid-19 pandemic.
In its 2020 Assessment of Business Environment Report published on Monday, the chamber says this year is projected to be challenging as the duration and the extent of devastation of the second wave of Covid-19 poses a risk.
MCCCI said in 2020, the impact of the pandemic on firms was mixed across all sectors as measures imposed to combat the spread of the pandemic led to reduced business activities and workforce productivity, especially during the second quarter (April to June).
Reads the report: “Generally, small and medium enterprises [SMEs] were more concerned about reduced cash flows and fell into the risk of closing down due to the Covid-19 pandemic.
“Large firms equally bore the brunt of the pandemic, especially air transport and tourism operators. In these firms, the concern was largely on how to change the business strategies and meet new customers.”
The chamber indicates that the industrial sector was hit the hardest followed closely by services sector.
Within the services sector, the sub-sectors that were hardest hit by containment measures were hotel and restaurant operations and the wholesale and retail trade.
In general, manufacturing operations, travel and hospitality and transportation services operated at their lowest capacities for a long time, says MCCCI.
The private sector lobby group has since proposed that government should prioritise providing targeted monetary and fiscal incentives to sustain the core economic activities in the informal, manufacturing, SMEs and hospitality sectors that ensure household food, nutritional and income security as well as improved resilience.
Last week, Ministry of Economic Planning, Development and Public Sector Reforms announced that it is ready to roll out the K20.5 billion urban social cash transfer programme from end January to March in which 185 247 households will each receive K35 000 per month.
The programme will target beneficiaries in the four cities of Blantyre, Lilongwe, Zomba and Mzuzu whose livelihoods have been heavily affected by the Covid-19 pandemic.
The ministry’s chief economist Bessie Msusa said in an earlier interview that what remained of the programme, which was initially scheduled to roll out in June last year, was mostly aligning names of the beneficiaries to their database.
Malawi, which has this far registered over 1 000 cases of Covid-19, has seen the business environment subdued in view of the measures that have been put in place by most countries, including Malawi, to ensure that the pandemic is contained.
The restrictive measures at the global and local levels have disrupted global and local demand and supply with spillover effects across all sectors of economies due to global inter-connectedness.
In in its Global Economic Prospects for January 2021, the World Bank said Malawi could register a 3.3 percent growth, below the pre-Covid-19 pandemic projections as risks, including the resurgence of the virus, remain prevalent.