Local businesses say they fear for the worst on trade and continued negative economic multiplier effects in view of travel restrictions effected to contain the spread of Coivd-19.
Cross-border Traders Association of Malawi president Esther Tchukambiri said in an interview on Friday that traders have already started suffering as most of them are not physically travelling to buy goods.
She said: “Our businesses are dependent on other markets in the region and beyond.
“The recent travel restrictions mean a slowdown in our businesses as borders have closed with others becoming extremely strict in allowing cross-border trade.”
On his part, Chamber for Small and Medium Enterprises president James Chiutsi feared for a shortage of critical raw materials and inputs for production.
“We have several members in the import and export business and their incomes are affected,” he said.
Commenting on the same, Economics Association of Malawi president Lauryn Nyasulu said the restrictions will affect the economy.
“The restrictions significantly affect the Malawi economy through a number of pathways, in particular, companies that rely on imported raw materials as they will have their production and profitability affected,” she said.
Nyasulu said this will trickle down to revenue collection as there would be a decline in trade; hence, affecting tax collection.
Available figures show that government’s revenue collections in the first quarter of the 2020/21 financial year were lower than targeted.
Treasury figures show that revenue collections for July to September 2020 amounted to K277.2 billion against a target of K304.1 billion.
This is lower than budgeted performance was largely due to underperformance of international trade taxes due to Covid-19 pandemic as trade volumes declined, according to the Ministry of Finance.
Non-tax collections also underperformed at K18.3 billion against the target of K22.8 billion due to the airline travel restrictions that affected the Department of Civil Aviation and the Department of Immigration Citizenship Services on the departmental receipts due to Covid-19 pandemic.