The economy’s concentration on a few agro-based commodities makes it vulnerable to weather and trade shocks, but diversification should be the way to go for Malawi, World Bank country manager Laura Kullenberg has said.
This would not be the first time calls for agriculture diversification have been made as other commentators and experts have sung the same song before with the country still not making meaningful headway.
Kullenberg noted that diversification is the way to go, not only within the agricultural sector but other sectors as well.
“We recently witnessed the launch of the results from the airborne geophysical data survey that was conducted with World Bank support nationwide. Though more analysis has to be done, some of these findings lead to diversifying into mining just like most of Malawi’s neighbours whose economies have relatively thriving mining sectors.
“To support diversification, it is also important to improve the quality of key private sector-related infrastructure such as transport, energy, telecommunications and water. But particularly power,” she said at the Institute of Chartered Accountants in Malawi (Icam) Annual Lake Conference in Mangochi last Thursday.
Kullenberg said within the Africa region, there are several opportunities for regional integration that Malawi could seize.
She said, for example, Malawi could connect to regional electricity grids to support business growth, ease trade restrictions and export bans that depress the performance of the export sector and making the transport sector more competitive since transport contributes significantly to the cost of doing business in the country.
Icam president Chiwemi Chihana told journalists that he believes Malawi can turn the corner and achieve development using own resources.
He said: “What we need is to strengthen and broaden local resources followed by prudent fiscal management. This can enable us stand on our own. It is about having home-grown solutions to improve and increase intra-regional trade partnerships. Our focus should be on better negotiations for our contracts on agricultural produce and natural resources exploitation and curbing illicit financial flows.”
Chihana noted that currently, Malawi is losing a lot of revenue because of poor negotiations.
“Our growers are being paid $1.77 (K1 005) per kilogramme [kg] of the leaf while in Zimbabwe the same was being sold at $5 (K2 840), this shows that something is wrong,” he said.