Covid-19 to worsen Poverty levels—report
The International Food Policy Research Institute (Ifpri) says an estimated 1.1 million Malawians have fallen into the poverty trap two months after authorities effected Covid-19 preventative measures.
This is according to a report produced by Ifpri titled Covid-19 Economic Impact on Growth, Poverty and Food Systems in Malawi.
Ifpri found that the measures, which were effected in April, have reduced household incomes by an average of 11.4 percent.
At the same time, the report says that urban households have lost an estimated 12.8 percent while the rural household losses stand at 10.2 percent.
The report says this has pushed the poverty rate by 5.8 percentage points to 56.3 percent from 50.5 percent.
Ifpri Malawi research analyst Rosemary Botha said in a webinar recording that although urban households are the most affected income-wise, poverty rate has worsened in rural areas.
She said: “We expect an increase in poverty due to these changes in income levels.
“Despite the disparity in income levels, rural households are closer to the poverty lines than urban households; hence, more people in the rural areas entering into poverty over this two-month period.”
On his part, Chancellor College economics professor Ben Kaluwa, in an interview on Monday, said this is not surprising, adding that authorities need to develop strategies to contain the situation.
He said: “Every economy has been impacted globally. We have seen rich economies registering high cases of unemployment.
“We just have to treat this like war and ponder on how we will survive after this.”
The worsening poverty levels is a blow to aspirations of the National Planning Commission (NPC) to graduate Malawi into a middle income status by 2035 with per capita income increasing to $1 000 (K740 000) per person from less than $400 (K326 000) per person.
World Bank figures indicate that while the ultra-poverty rate fell from 24.5 percent in 2011 to 20.1 percent in 2016, over the same time period, the moderate poverty rate increased from 50.7 percent to 51.5 percent.
It said with population growth higher than the pace of poverty reduction, the number of people living below the poverty line increased over this period from 7.1 million to 8.4 million.
In his 2020/21 Budget Statement presented in Parliament in Lilongwe two weeks ago, Minister of Finance, Economic Planning and Development Joseph Mwanamvekha said the Covid-19 pandemic has threatened livelihoods of the peri-urban vulnerable and ultra-poor by exposing them to massive disruption in their healthcare, education and access to basic needs.
