Malawi Confederation of Chambers of Commerce and Industry (MCCCI) says the rising cases of Covid-19 will negatively affect businesses in the second half of the year.
MCCCI chief executive officer Chancellor Kaferapanjira said in an interview on Tuesday that political uncertainty is gone, but the greatest risk for business remains the pandemic which threatens sustainability of businesses.
He said: “Our main risks have been political uncertainty and the Covid-19 pandemic. But now with political uncertainty gone and Covid-19 cases rising, businesses are still struggling to pick-up.
“While we are looking into the future with a lot of optimism, we are aware that increasing cases would trigger more containment measures which suppresses businesses, but we have to do the right thing by applying the measures.”
Businesses drive economic stability and growth by providing valuable services, products and tax revenues and jobs.
Already, in the face of the pandemic, Treasury has seen its monthly tax revenue falling by an average of 35 percent from K90.8 billion per month during pre-Covid-19 period to a monthly average of K59.1 billion during the post-Covid-19 period.
In its 2020 Malawi Annual Economic Report, Treasury said the economy is projected to lose about K244 billion in nominal gross domestic product (GDP) or 3.5 percent loss, if the pandemic is contained by the second quarter of the 2020/2021 financial year.
Last week, the African Development Bank (AfDB) said in the worst case scenario, Malawi could register a 0.6 percent growth, 4.6 percentage points shy of its earlier 5.2 percent growth projection.
The bank has also projected the country’s annual inflation to increase to 12.4 percent in the worst-case scenario from an initial projection of 8.4 percent.
However, Treasury revised downwards the country’s GDP growth for 2020 from 5.5 percent to 1.9 percent in the face of the Covid-19 pandemic although it expects the 2020 annual inflation rate to decline to 8.8 percent on the back of increased food availability, depressed demand for goods and services including oil, tradable goods, travel and accommodation.
Economics Association of Malawi (Ecama) president Lauryn Nyasulu said that other factors such as exchange and inflation rates have remained stable, but in view of the current economic challenges, the country needs to formulate policies and strategies that will ensure that the country reaps economic gains from the past years.