A new report published this week by The Wall Street Journal and Washington’s think-tank The Heritage Foundation, has indicated that Malawi has improved on economic freedom—a measure that includes property rights, control of government spending, monetary freedom and trade freedom.
This year, Malawi jumped 15 places on economic freedom to 111 out of 177 economies from last year’s 126.
The country’s economic freedom score this year is 72.4 percent.
In sub-Saharan Africa, Malawi along side Zambia, South Africa, Tanzania and Mozambique registered high improvements in 2015, the 2016 Index of Economic Freedom Report said.
The rating follows recent World Bank Doing Business 2015, which Malawi also improved three steps to 141 this year from last year’s 144.
However, the country slipped three steps to 135 out of 145 economies on the 2015/16 World Economic Forum, Global Competitiveness Index, the most comprehensive assessment of national competitiveness worldwide.
The new rating will be good news to Minister of Finance, Economic Planning and Development Goodall Gondwe who has insisted that government is undertaking reforms that will turn the economy around.
“We are carrying out a number of reforms and I am sure come 2016, Malawians will clap hands for us,” said Gondwe in an earlier interview with Business News.
He said adequate and resilient policy reforms will aid in strengthening macroeconomic growth in the medium and long-term.
According to the International Monetary Fund (IMF), Malawi economy, currently in slow down, is expected to recover in 2016, with growth in gross domestic product (GDP) expected to pick up to 4.5 percent due to recovery in the agricultural sector, construction activity, and the wholesale and retail sectors.
The bank also predicts that credit to the private sector is projected to pick up over the medium term as inflation falls to single digits.
In the 2016 Index of Economic Freedom Report, however, poor countries like Malawi have been hailed mainly for reforms in trade.
The report says that free trade policies that have been embraced, do not just promote economic growth, but encourage freedom—including protection of private property rights and the freedom of average people to buy what they think is best for their families, regardless of attempts by special interest groups to restrict that freedom.
“The 2016 Index of Economic Freedom shows that people who live in countries with low trade barri¬ers are better off than those who live in countries with high trade barriers.
“Reducing those barriers remains a proven recipe for prosperity. Govern¬ments interested in higher economic growth, less hunger, and better environmental quality should work to increase trade freedom,” reads the report. n