The World Bank has projected that Malawi’s economy will grow by 4.8 percent this year, which is 2.2 percentage points lower than Malawi Government’s ambitious projection of seven percent.
The Bretton Woods institution’s projection is premised on weather shocks and political instability folowing the disputed May 21 Tripartite Elections whose presidential race outcome is being contested in court.
The forecast is contained in the bank’s flagship report titled Global Economic Prospects: Slow Growth, P-olicy Challenges released on Friday.
In the report, the World Bank says growth in low-income countries, including Malawi, stalled in 2019 as global and individual factors dampened activity.
The bank, however, hopes that ensuring gender equality in access to resources could further boost agricultural productivity given the composition of the Malawi economy, which is agro-based with agriculture contributing about 30 percent to gross domestic product (GDP).
World Bank Group vice-president for equitable growth, finance and institutions Ceyla Pazarbasioglu said in a statement accompanying the report that with growth likely to remain slow, policymakers should seize the opportunity to undertake structural reforms that boost broad-based growth, which is essential to poverty reduction.
“Steps to improve the business climate, the rule of law, debt management, and productivity can help achieve sustained growth,” she said.
But Minister of Finance, Economic Planning and Development Joseph Mwanamvekha has maintained that the economy will this year grow by seven percent, banking on the planned infrastructure development and continued focus on Malawi growth potential areas such as manufacturing.
In the 2019/20 National Budget Statement, the minister said the economy has continued to register remarkable growth, especially in the agriculture sector.
He said: “Government projects a GDP growth rate of five percent in 2019 and a further seven percent in 2020 emanating from the huge amount of planned infrastructure development in government and continued focus on growth potential sectors.”
Economic commentators, however, argue that for a country to experience meaningful economic growth, it should not only think outsidet the box, but jump out of box and look beyond drivers of the economy.
“We have undergone so many regimes but none has equipped us with knowledge to jump out of the box. We have heavily depended on the same resources and kind of thinking to bring change. “It is only when we look beyond what we think are drivers of economic growth when we can realise actual growth,” said University of Malawi’s Chancellor College economics professor Ben Kaluwa.