Malawi continues to lag behind on competitiveness in the world, a situation Economics Association of Malawi (Ecama) says could be improved by sustaining macroeconomic sustainability.
Ecama’s views are based on the latest World Economic Forum (WEF) Global Competitiveness Index, which has ranked Malawi on 128 out of 141 economies, with a score of 43.4, below the 50 benchmark for competitiveness. This year’s ranking is an improvement from last year’s 129.
In an interview on Monday, Ecama executive director Maleka Thula said the findings of the report are not surprising in as far as the country’s competitiveness is concerned.
He said the past effects of a volatile economy are still affecting the country’s competitiveness.
Said Thula: “In the recent past, we have had a volatile economy as characterised by high inflation, high interest rates, unstable exchange rate and weak economic growth.
“All we need is to ensure that the macroeconomic stability is sustained for a long time and this also should be accompanied by improvement in a number of indicators of development if Malawi is to improve her competitiveness on a global scene.”
WEF founder and executive chairperson Klaus Schwab is quoted in the report as having said that it is crucial for economies to rely on fiscal policy, structural reforms and public incentives to allocate more resources towards the full range of factors of productivity to leverage new opportunities provided by the fourth industrial revolution.
“The competitiveness landscape painted by the report in 2019 demands more effort to restore productivity and growth to lift living standards,” he said.
Covering 141 economies, the index is an annual yardstick for policymakers to look beyond short-term and reactionary measures, but assess their progress against the full set of factors that determine productivity.
These are organised into 12 pillars, namely institutions; infrastructure; information and communications technology (ICT) adoption; macroeconomic stability; health; skills; product market; labour market; financial system; market size; business dynamism; and innovation capability.
According to the report, infrastructure, ICT adoption, skills, market size and macroeconomic stability are among the key areas affecting Malawi to improve her competitiveness at the global level as these are also affecting productivity.
Led by Mauritius (52), sub-Saharan Africa is overall the least competitive region, with 25 of the 34 economies assessed this year scoring below 50.
South Africa, the second most competitive in the region, improved to 60th while Namibia (94), Rwanda (100), Uganda (115) and Guinea (122) all improved significantly.
Among other large economies in the region, Kenya (95) and Nigeria (116) also improved their performances.
Access to electricity, telecommunication and reliable transport remains a key challenge in the infrastructure sector which, according to the Malawi Confederation of Chambers of Commerce and Industry (MCCCI), remain some of the key obstacles to doing business. Ironically, the 2019 United Nations Conference on Trade and Development (Unctad) World Investment Report ranks Malawi as one of the countries with the lowest levels of foreign direct investments in the region, raking $102 million (about K75 billion) in 2018, an increase from $90 million (about K67 billion) in 2017