Malawi’s Economic Growth Could Slump Beyond 2.0 Percent in 2020-MCCCI
An assessment report by Malawi Confederation of Chambers of Commerce and Industry (MCCCI) projects an economic slump above 2 percent mostly because of excessive borrowing by government from commercial banks.
The report says this year alone, government has already borrowed MK565 billion from commercial banks to facilitate the implementation of programs aimed at cushioning COVID-19 economic shocks.
MCCCI Director of Business environment and Policy, Madalitso Kazembe says initially it was projected that the country’s economy will grow by 5.5 percent but with COVID-19 pandemic, it will be hard for the country to achieve this.
“The increasing number of COVID-19 cases in the country, if not contained, threatens to lock our economy from the rest of the world. Furthermore, as long as the cases continue to increase, restrictions that have affected normal business activity will continue to be enforced. The economy will, therefore, continue to be under threat as long as COVID-19 cases continue to swell” said Kazembe
Polytechnic economic expert, Dr. Betchani Tchereni says MCCCI’s report is a wake-up call for government to diversify means of growing the economy.
“This is time for Malawi to diversify means of generating revenue, deviating from the usual agriculture. In that way, we will be able to bounce back from shocks of COVID-19 and other future calamities,” said Tchereni
Reports show that generally, the business sector has not been performing well since Covid-19 was reported in China last December which has impacted domestic revenue collection which funds the economic purse for Malawi government.
In the four-month provisional budget passed early this month, 407 billion out of 722 billion kwacha to be used is estimated to be generated from domestic revenues.
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