Lilongwe inflation rate rises to 44 %

The October 2013 inflation for Lilongwe rose to 44 percent from 42.5 percent the previous month. However, Zomba is the tope with 44.5 percent, according to available statistics.

The National Statistical Office (NSO) November 2013 statistical bulletin released last week further indicates that October 2013 inflation rate in Blantyre, Malawi’s commercial city stood at 20.3 percent over 10 percentage points below the urban rate while Mzuzu stood at 36.1 percent.

But according to Centre for Social Concern (CFSC) Basic Needs Basket Lilongwe had the second highest cost of living with a household of six requiring K113 000 (about $282) in December 2013. In Zomba a household required K108 000 (about $270), Mzuzu the requirement was K99 000 (about $247). Blantyre had the highest BNB in December 2013 at K119 000 (about $297).

In an interview on Tuesday, CfSC social conditions research programme officer Alex Nkosi explained that Lilongwe has the highest cost of living due to cash gate.

“Life in Lilongwe is expensive due to circulation of dirty money. Basic needs such as housing, charcoal and food items are expensive,” said Nkosi.

Explaining why Zomba has the highest inflation, Nkosi said that although their assessment does not corroborate the NSO statistics they have observed that basic needs in the old capital have been rising recently. He attributed the rise to food shortage that has hit the Southern Region.

According to the CfSC, to meet basic food needs, a household of six in December 2013 required an average K68 000 in Lilongwe, K72 000 in Zomba, K70 000 in Blantyre and K66 000 in Mzuzu.

Nkosi earlier recommended that to ensure households at least meet the basic food requirements, the government must expand the tax free band on Pay As You Earn (Paye) to K40 000.

The October 2013 urban inflation stood at 31.6 percent, rural at 17.5 percent while the national inflation was at 22.2 percent.

The year on year headline inflation for 2013 was 27.1 while the December 2013 inflation stood at 23.5 percent, according to the NSO.

Experts including Nico Asset Managers in its November 2013 monthly economic report cautioned that the depreciation of the kwacha was expected to push up the 2013 inflation.

Some experts have also argued that food shortage will prompt inflation to rise further. Food and non alcoholics comprise about 50 percent of the CPI while people that require food assistance between January to March is pegged at 1.9 million according to government.