Public policy analyst Alex Nkosi has said indications by 19-member Comesa that Malawi has the most expensive goods and services in the regional trade bloc vindicates a general outcry by most Malawians over the continued rising cost of living.
He said in an interview yesterday the rise in prices of goods and services in Malawi has largely been triggered by the recent sharp depreciation of the kwacha, which has shed by about 35 percent since June this year.
In the past few weeks, however, the local unit has been gaining ground against the dollar despite the country being in the lean season of foreign exchange supply.
Malawi’s inflation rate is currently at 24.1 percent as of September 2015, according to the National Statistical Office (NSO), and the Common Market for Eastern and Southern Africa (Comesa) latest Harmonised Consumer Price Index (HCPI) said Malawi’s inflation remains the highest within the trade bloc. This means that prices of basic goods and services in Malawi are increasing faster than any participating member within the regional trade bloc.
Said Nkosi: “The pace at which prices of basic goods and services in our markets here in Malawi are rising is faster than in other countries within Comesa.
“While that is the case, incomes of most Malawians remain stunted, forcing most of them to scale down or change their lifestyles and daily menu.”
Data compiled by Comesa shows that Malawi, Sudan and Ethiopia recorded year-on-year inflation rate of 24.8 percent, 13.8 percent and 13.7 percent
respectively in August 2015.
This, therefore, means that using the kwacha based on the Comesa HCPI, an item on the market that cost an average of K100 ($0.18) in August last year has seen its price increasing to K124.80 ($0.23) in August this year.
The Comesa figures come hot on the heels of an assessment by International Monetary Fund (IMF) which noted that Malawi’s inflation rate has picked up sharply tirggered by rising food prices, after declining significantly during the first quarter of 2015.
On one hand, other countries that recorded lower inflation in August include Burundi, Egypt, Madagascar, Rwanda, Swaziland, Uganda and Zimbabwe at 8.1 percent, 7.3 percent, 7.7 percent, -1.7 percent, 4.5 percent, 5.4 percent and negative -2.7 percent respectively.
The Comesa report shows that the region’s consumers spend most of their money on education, alcohol and tobacco and recreation and culture.
Other components of expenditure include restaurants and hotels, food and non-alcoholic beverages, clothing and footwear, housing, water, electricity, gas and other fuels.