Malawi faces K255bn energy financing gap
The World Bank has estimated that Malawi is currently facing an annual investment gap of $332 million (about K255 billion) in the energy, water supply and sanitation sectors, calling for reforms aimed at closing such a gap.
In its publication Malawi Economic Monitor launched virtually in Lilongwe, the Bretton Woods institution has since advised Capital Hill to embark on serious reforms that can increase investment in infrastructure in the energy, water and sanitation sectors, in the medium-term.
“In the energy and water supply and sanitation sectors, the annual investment gap is approximately $332 million, about four percent of gross domestic product [GDP], whereas total public investment across all sectors has averaged 4.2 percent of GDP over the past two decades,” reads the report in part.
Malawi has one of the lowest electricity access rates at 11 percent compared to 42 percent in low-income countries and 48 percent in sub-Saharan Africa, according to World Bank data.
There is also a glaring inequality among the rich and poor when it comes to access to electricity as the poorest 20 percent of Malawians have one percent electrification rate while the richest 20 percent have 31 percent electrification rate.
According to the bank, unsafe drinking water and poor sanitation also remain binding constraints to Malawi’s growth.
“With 67 percent access to basic water supply and 26.2 percent access to basic sanitation, the country is significantly off-track to achieve the Sustainable Development Goals for water.
Commenting on the report, World Bank acting country manager for Malawi Javier Zuleta explained that the government is aware of high expectations from its constituencies to strengthen service delivery in the energy and water and sanitation sectors.
Speaking virtually as a discussant, deputy director of planning in the Ministry of Forestry and Natural Resources Maxwell Wengawenga observed that any huge investment in the energy and water sectors triggers positive multiplier effects in other sectors such as health, tourism and agriculture.
On his part, deputy director responsible for Alternative Energy in the Ministry of Energy Joseph Kalowekamo, who was also a panellist during the launch, said it was imperative that State-owned enterprises in the energy sector, especially Electricity Supply Corporation of Malawi need to improve its financial performance, lamenting that such a performance has worsened for the past three years.
“Escom needs to frequently adjust its tariffs to reflect its costs and in that case it will improve its revenue collection and also its creditworthiness,” he said.
