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Malawi agro sector growth defies Covid-19

Slowdowns in local and cross-border economic activities induced by Covid-19 restrictions failed to stop growth in the agricultural, forestry and fishing sector, a latest Reserve Bank of Malawi (RBM) report shows.

The RBM Financial and Economic Review Report for the fourth quarter of 2020 shows that the sector grew by 6.6 percent, a jump from 4.3 percent achieved in 2019.

The central bank has attributed the outurn to high maize, rice and cotton output following favourable weather conditions and increased input uptake.

RBM forecasts that this year, growth in the agricultural, forestry and fishing sector is projected at 8.8 percent, largely boosted by maize output.

Maize output is expected to push up growth in the agriculture sector, with the Ministry of Agriculture first-round production estimates showing that the staple grain’s output is expected at 4.4 million metric tonnes.

This is 42 percent above the five-year average and 21 percent above the national requirement, according to the Famine Early Warning System Network (FewsNet).

Explaining the agriculture sector growth, agriculture policy development analyst Tamani Nkhono-Mvula in an interview yesterday said agriculture is seasonal and is predominantly subsistence with little linkage to the international market except for a few value chains such as tobacco and tea.

“As such, the disruption of the supply chain that happened on the international market had little impact on local production and growth,” he said.

Nkhono-Mvula said there is need to ensure that agriculture growth translates into development and transformation of the sector and poverty reduction of the farming communities.

On the contrary, the RBM report shows that growth in other sectors was subdued when compared to the prior year. For instance, the manufacturing sector’s growth for 2020 was at 4.3 percent, a drop from 5.1 percent in 2019.

RBM has attributed the slow growth to Covid-19, which hindered both imports and exports of goods due to border closures and restrictions. This affected the importation of production inputs as well as exportation of manufactured goods.

Accommodation and food services sector was the most affected by the pandemic in 2020 as it contracted by 26.7 percent from a growth of 4.8 percent in 2019, the figures show.

Reads the report in part: “This slowdown was predominantly on account of the cancellation of conferences, popularisation of virtual meetings, reduction in the inflow of expatriates and tourists whose demand in the services sector is significant, and restrictions on the numbers of people patronising restaurants.

While admitting that the economy continues to suffer from of Covid-19 impact, Minister of Finance Felix Mlusu is upbeat the economy will this year register higher growth compared to last year.

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