Malawi has for the past two years maintained gains made on drivers of productivity and prosperity, moving six steps from 135 in 2016 to 129 this year, indicates the World Economic Forum’s flagship report, Global Competitiveness Index (GCI).
This year, the country moved three steps from 132 in 2017 to 129 out of 140 economies.
Last year, the country moved from 135 in 2016 to 132 this year out of 137 economies, according to WEF.
The index assesses factors driving countries’ productivity and prosperity and Malawi’s ranking on the index means that globally, the country is less competitive.
GCI scores are calculated by drawing together country level data covering 12 categories—the pillars of competitiveness—that collectively make up a comprehensive picture of a country’s competitiveness.
As compared to last year, however, the country’s poor performers; infrastructure development ranking improved from 137 to 129 and macro-economic environment improved from 136 to 128. The country, however, ranks highly on labour market efficiency, ranking 76th globally, although this is a slide from last years’ 45.
The report also identifies inflation, small and medium enterprises financing, domestic credit to the private sector, Venture capital availability, Electrification rate, corruption as the most problematic factors hindering Malawi’s competitiveness on the global scene.
Inflation, rather high and low inflation is always a cause for concern at both micro and macroeconomic levels.
Economics Association of Malawi (Ecama) executive director Maleka Thula told Business News that the upward revision in domestic fuel pump prices, coupled with the recent hike in electricity tariff, will more likely worsen the inflation outturn in the remaining months of the calendar year.
However, the Reserve Bank of Malawi (RBM) maintained the inflation forecast of a single digit this year and five percent in the first quarter (January to March) of 2021.
RBM Governor Dalitso Kabambe earlier said the upward inflation was already projected, saying the central bank had already put in place controls to manage the situation observing the movement’s ion global oil prices and risks in terms of water and electricity tariffs adjustments.
Last month, Minister of Finance, Economic Planning and Development Goodall Gondwe said Malawi, with assistance from development partners, has made efforts to improve the fight against corruption.
He said: “There are a lot of efforts on our part to curb corruption. The new Ifmis [Integrated Financial Management Information System] should substantially help us curb theft and corruption in the public service.”
Meanwhile the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) says access to finance remains one of the major obstacles to doing business in the country.
MCCCI president Prince Kapondamgaga said government’s continued borrowing is crowding out local businesses.