Players differ on benefits of macroeconomic stability
Economic players have differed on the tickle-down effect of macroeconomic stability characterised by low inflation and interest rates and a stable exchange rate.
Malawi’s economy has since 2016 demonstrated resilience to shocks, with some of its key macroeconomic variables remaining firm.
Knight Frank managing director Don Whayo, in an e-mail response on Sunday, said despite economic gains, the environment is still hostile.
“Our observation, so far, is that although interest rates have gone down, the present level of mortgage lending rates is still unaffordable to the majority of Malawians and, therefore, we have not yet started seeing much activity on the market in terms of house purchases,” he said.
Whayo, whose firm is involved in property management and valuation, said renting is still a major option for many people, with a lot of properties being sold by banks and yet few sales are closed.
“This is a sign that things are not normal and a situation like that where supply is more than demand, the market favours those who have ready cash and it becomes a buyers’ market,” he said.
However the manufacturing and banking sectors have a different story.
Candlex Malawi Limited mananging director Fredrick Changaya said in an interview yesterday that if companies are not making profits, it is because of something else and not macroeconomic fundamentals.
“In the past, we were suffering more from the unfriendly macroeconomic environment, but now that things have improved for the better, companies have been given a breathing space,” he said.
Bankers Association of Malawi (BAM) President Kwanele Ngwenya said banks have, in context of the stable macroeconomic environment, showed some signs of improvement.
“This far, things are looking good for the banking sector. With the stable economy, banks’ performance and operations have improved for the better,” he said.
Reserve Bank of Malawi Governor Dalitso Kabambe has maintained that the stable macroeconomic environment has yielded dividends of economic growth and development. University of Malawi’s Chancellor College economics lecturer Exley Silumbu observed that for the economic stability to translate in real and meaningful growth for all, government should also look at other factors such as energy.
