The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has predicted that the country’s tourism sector will be heavily battered this year and will register negative growth.
In its April 2020 economic update, MCCCI says it sees the accommodation and food sector shrinking by -9.9 percent this year down from 4.9 percent last year.
Again with international flights and the services of cross border buses suspended since April 1, the flow of tourists into the country has grinded to a halt.
The development has resulted in room occupancy in hotels crashing to the ground.
Currently, a number of hospitality establishments have opted to send some of their staff on leave while others, have resorted to salary cuts in a desperate attempt to keep the companies afloat.
But MCCCI says it expects the sector to bounce back strongly next year and to register a growth of 9.2 percent.
The chamber has predicted that agriculture, which is the main driving force of the local economy, will grow by 1 percent from 3.9 percent last year before bouncing back to 3.1 percent next year.
“The pace in the growth of manufacturing will slow from 5.2 percent last year to 1.9 percent this year but will rebound to 3.3 percent in 2021. Growth in Information Communication Technology (ICT) services is also expected to be affected though moderately with MCCCI predicting a 4.5 percent growth this year down from 6.8 percent last year. In 2021, ICT services are expected to come back strongly at 5.8 percent.
“Equally affected will be the financial and insurance industry with growth seen at 2.3 percent this year from 6.4 percent last year. Like all other sectors, growth in banking is expected to rebound in 2021 to 5.5 percent,” reads the report in part.
On the overall, MCCCI expects growth in the local economy to decline to 1.9 percent this year, from 5.2 percent last year.
Recently, the International Monetary Fund (IMF) in its Sub Saharan Regional Outlook for April predicted a 1 percent growth for the local economy.
Reserve Bank of Malawi (RBM) Governor, Dalitso Kabambe, recently said the country’s economic outlook remains uncertain in the wake of Covid-19.
“The key question for me is; how would the pandemic behave in Malawi. What pattern is it going to take? Is it going to take the same pattern as in the US where you are seeing a big increase on daily basis? Or is it going to be gradual and not go that far?
“When you talk to people in the Ministry of Health, the experts who are familiar with pandemics, they are also not certain as to what pattern it is going to be like. So it really depends,” Kabambe said.
He noted that in their economic analysis, they have three models where the impact is minor, moderate and then the worst case scenario.