Malawi’s per capita income has jumped by 72 percent from $350 (K262 500) to $603 (about K455 000), thanks to the rebasing of the country’s nominal gross domestic product (GDP).
National Statistical Office’s (NSO) rebasing of GDP—replacing the old base year (2010) for compiling GDP with the recent base year (2017)—has resulted in the size of the economy expanding by over 70 percent to $6.4 billion (about K4.6 trillion) in 2010 to $10.9 billion (K8.1 trillion) in 2019.
NSO deputy director of statistics Hector Kunkuwe confirmed in an interview on Tuesday that the rebasing has increased nominal GDP for that year using current prices of that year.
He said the exercise also helps to increase coverage of many other economic activities that were not covered in the old base year.
Said Kunkuwe: “In 2010 when we were rebasing, we did not have a census or a survey of such magnitude.
“This time around, we were able to do an economic census covering most of the major companies in Malawi in large-scale as well as in medium-scale and also a little bit of sampling of small-scale operators because they are so many.”
He said in terms of GDP per capita for 2019, NSO used a population projection based on 2018 Population and Housing Census, which had a national population figure of 17.6 million people, but projected to 18 million people for 2019.
“So for the denominator, we are using 18 million people and then the numerator is $10.9 billion, which now translates into a GDP per capita of $603 per person per year,” said Kunkuwe.
At $603, Malawi’s per capita GDP is still way below that of neighbouring Tanzania at $1 600 (about K1.2 million) Zambia at $1 090 (about K820 000) per person per year.
Commenting on the same, National Planning Commission (NPC) director general Thomas Chataghalala Munthali in an interview on Wednesday said rebasing of GDP is timely and important at a time NPC is making projections on when the country will hit the upper middle-income status before 2063.
He said: “The GDP rebasing gives us the real base on which to take off. You recall that one distinguishing feature that NT2063 [National Transformation 2063] is that we will set targets which will help us as a commission to realistically oversee implementation of the vision.
“With the upward revision in the GDP per capita, it means we could reach the upper middle-income status earlier.”
But Munthali cautioned that Malawians should not sit back and relax feeling the country is now much wealthier than before, stressing that Malawians still need to work hard and be motivated to do more.
“Essentially this is like having a house that was undervalued by evaluators because they may not have considered the aluminum windows or the lockable garages that got installed,” he said.