Weather shocks dampen economy
Crop production losses resulting from the country’s over-reliance on rain-fed agriculture dominated by maize growing, continues to affect economic growth, an agriculture expert has said.
In a written assessment, agriculture expert Tamani-Nkhono Mvula said with 99 percent of smallholder farmers growing maize and relying on a single rain-fed season, weather shocks are further worsening poverty among many Malawians.
He said with maize output suffering from low productivity due to high risk of climatic shocks and less diversification, Malawi is at the mercy of weather-related shocks.
Said Nkhono-Mvula: “The fact that Malawi is losing a lot due to weather-related shocks and Malawi agriculture is vulnerable as it is dependent on weather as opposed to the fact that if it was dependent both on rain-fed and irrigation, much of these challenges could have been avoided.
“The further challenge is that such shocks are exacerbating poverty among most Malawians as it is the poor who are mostly affected, and in the end, use survival and coping strategies that entrench their poverty status.”
In his research paper titled Managing Agricultural Risks for Growth and Food Security in Malawi, Asa Giertz highlighted that between 1980 and 2012, the country lost an average of $149 million (about K112 billion) due to annual losses from production risks for major crops .
Treasury figures indicate that in 2016, for instance, drought had the greatest impact on agriculture, costing $263 million (about K195 billion) while in 2015, the sector lost $68 million (about K50 billion).
Experts have been calling for increased diversification to reduce risks of income variability, crop failure while supporting farming households to build up savings and productive assets.
World Bank country economist Priscilla Kandoole said increased agricultural diversification could reduce vulnerability to shocks.
“Increasing diversification would reduce risks of income variability, crop failure while supporting farming households to build up savings and productive assets,” she said.
Agriculture remains important to the country’s economy. Although the sector contributes about 30 percent to gross domestic product (GDP), it impacts growth in the other sectors by providing key inputs for the manufacturing sector and determining most household income levels which drive demand in the service sectors.
The performance of the agriculture sector, particularly the maize sub-sector, has significant implications for the country’s food security and inflation rates, with food contributing a major proportion to the Consumer Price Index (CPI), an aggregate basket of goods and services for measuring inflation.
World Bank figures show that the country’s GDP growth decelerated from four percent in 2017 to 3.5 percent in 2018 mainly due to the fall in agriculture output.
In 2019, GDP is projected to grow by 4.5 percent, with the impact of Cyclone Idai and floods that the country hit in March this year taking its toll.
Since 2016/17, Malawi’s poverty rate has remained roughly unchanged, standing at about 50 percent of the population, a situation the multilateral bank has attributed to the country’s vulnerability to climate-related shocks which limits progress in reducing poverty.
With disasters expected to increase due to rapid population growth, urbanisation and environmental degradation, Secretary to the Treasury Cliff Chiunda, in an earlier interview, said management of fiscal impacts from disasters is its highest priority as it leads to large-scale fiscal losses.
