Economic experts maintain that the Malawi economy will grow by 1.9 percent in 2020 and 4.5 percent in 2021 despite the World Bank projecting a possible drastic economic downturn in some Sub-Saharan African countries.
In a statement Thursday, the World Bank says growth in Sub- Saharan Africa is predicted to fall to -3.3 percent in 2020, pushing the region into its first recession in 25 years
In its latest regional economic analysis, Africa’s Pulse, titled Charting the Road to Recovery, the Bretton Woods’ institution says Covid-19 could also drive up to 40 million people into extreme poverty in Africa in 2020, erasing at least five years of progress in fighting poverty.
According to the analysis the decline in growth has been stronger among metals exporters where real GDP is expected to contract by six percent, partly reflecting the large drop in output in South Africa.
“The road to recovery may be long, and it may be steep, but prioritizing policy actions and investments that address the challenge of creating more, better and inclusive jobs will pave the way for a faster, stronger and inclusive recovery for African countries,” said World Bank Chief Economist for the Africa regions, Albert Zeufack.
But the government projects a 1.9 percent GDP growth for 2020 on assumption that there will be gradual opening of economic activities, and the economy is projected to grow by 4.5 percent in 2021.
Reacting, Economics Association of Malawi (Ecama) president, Lauryn Nyasulu, said the project fall may have been hugely on bigger economies that are hit hard by the pandemic.
Nyasulu said magnitude of the pandemic’s impact could not match that of other economies within the region as Malawi did not go on a full lockdown.
“We need to provide support to the sectors that have been hit hard such as tourism, construction, hospitality and logistics and supply because even though these sectors may not contribute as much as agriculture and other sectors, Covid-19 knock on them has disturbed economic activities because unemployment has increased in the sectors,” Nyasulu added.
The projection by the Department of Tourism said the tourism sector alone may lay off 35, 000 people in 2020 due to the pandemic.
In a separate interview, Dean of Commerce at the Polytechnic, Betchani Tcheleni, said a 1.9 percent GDP is realistic for Malawi this year.
He, however, said poor performance by other countries, which are Malawi’s trading partners, would greatly affect the local economy.
“Market for some of our commodities may not be there and our export earnings will further go down,” he said.
Covid-19 has had an impact in the economy, affected revenue from the country’s main export crop, tobacco, and widening the gap between exports and imports.
Earlier, the government projected a GDP growth of 3.1 percent in 2020.