The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) says the country’s tourism sector will contract from the projected -9.9 percent growth as the second lockdown in some countries looms.
In its November 2020 economic update, the private sector lobby group said travel restrictions imposed in these countries mean that the tourism sector will be affected by cancellations.
The tourism sector has taken a huge toll due to the Covid-19 pandemic, with authorities taking extreme measures of almost shutting down the economy to contain the virus, through social and physical distancing as one way of preventing the spread of the disease that was discovered in in China in December 2019.
With movement across borders suspended in April this year, the flow of tourists into the country has been minimal.
The development resulted in room occupancy in hotels declining and a number of tourism establishments laying off their staff or cutting in an attempt to keep their businesses running.
In June this year, the Malawi Tourism Council (MTC) estimated that about 35 000 people had lost their jobs in the sector.
But MCCCI said the news of the second lockdown across the globe comes as a huge blow to the hospitality industry, saying as the country approaches the holiday season, it receives tourists from across the world but this may be slightly different this year.
Reads the report in part: “Going into November, a number of countries such as Italy, Germany, United Kingdom and Belgium announced a second lockdown in an attempt to contain the spread of the virus.
“This is no doubt bad news for the local economy because the first two quarters of the year experienced reduced economic activity.”
MTC chairperson Johns Malili admitted that tourism continues to be affected by the Covid-19 pandemic and this year growth in the sector will be subdued.
He said: “The regional economy, specifically the tourism sector, has suffered a greater loss in the year, as we saw a drop in international traffic by almost 95 percent by July, a 57 percent drop in international arrivals and a 73 percent drop in accommodation occupancies.”
Meanwhile, Malawi’s gross domestic product (GDP) growth is projected at 1.2 percent in 2020 from 5.1 percent in 2019, reflecting the adverse impact of the Covid-19 pandemic, according to the Reserve Bank of Malawi (RBM).
In 2019, the tourism sector registered a 4.8 percent growth, but RBM projections show that growth will contact by 9.9 percent.
Ministry of Tourism, Wildlife and Culture has since indicated that the Covid-19 pandemic will cut tourism sector earnings by 60 percent, potentially diminishing its contribution to GDP.
Malawi’s GDP stands at K8.1 trillion and this means that the 60 percent loss is equivalent to about K400 billion.
An Assessment of the Impact of Covid-19 on Employment in Malawi report by Employers Consultative Association of Malawi and International Labour Organisation predicted doom in the sector.
The report indicated that accommodation and food services will have the highest percentage of jobs lost to Covid-19 among all the sectors, potentially losing up to 14 percent.
Reads the report: “This sector will lose 14 percent of its jobs if the crisis ends by September 2020, 12 percent if it persists to December 2020 and up to 14 percent if the situation does not normalise by March 2021.
“However, it is worth noting that if the pandemic is contained by September 2020, the share of jobs lost will be much more modest compared to the other scenarios. This is because in that case, the sector is expected to rebound in 2021 as it will have had enough time to recover.”
In June, a preliminary study by MTC showed that the tourism sector had lost about K40.5 billion in potential revenue in three months due to the Covid-19 pandemic.