Collapse of confidence in Malawi economy – Legatum Institute

Malawi is getting gloomier about the economic future again as London based Legatum Institute has told Nyasa Times that the country dropped 12 places in the 2014 Legatum Prosperity Index, which measures the human and economic prosperity of nations around the world,  due to a decrease in a number of objective and subjective variables.

Gllomy situation: Gondwe (L) and President Mutharika

Gllomy situation: Gondwe (L) and President Mutharika

Malawi is ranking low in the economy sub-index from being 16th amongst 38 African countries in 2012 to 34th in 2014. Its score decreased from -0.9050307 to -2.229171 in this period.

“This is due to a decrease in a number of objective and subjective variables. Objective macroeconomic indicators have worsened in the country since 2012,” explained Solène Dengler research analyst at the Legatum Institute in a response to Nyasa Times questionnaire.

“Gross domestic savings decreased from 8.2% to 5.6% of GDP,” disclosed the research analyst.

“Non-performing loans went up from 3.2% to 6.4% of total loan.   Inflation rate increased from 7.4% to 27.3%,” she added.

Malawi’s average 5-year GDP per capita growth rate decreased from 4.2% to 0.2%, said Legatum analyst.

According to the institute, subjective indicators have also worsened.

“Over 50% of the population believes that economic conditions are getting worse in the economy in 2014 (more than 50% believed economic conditions were getting better in 2012),” the Institute said.

“The percentage of people who believe that it is a good time to find a job went down from 46% in 2012 to 41% in 2014,” Dengler told Nyasa Times.

She also disclosed that “the percentage of people who said they had adequate food and shelter decreased from 56% in 2012 to 49% in 2014.

“The percentage of people who are satisfied with their standard of living went down from 64% in 2012 to 39% in 2014.”

Legatum Institute’s 2014 Prosperity Index  measures a set of eight categories that reveal how nations perform both economically and in vital areas of education, health, personal freedom, safety and security and entrepreneurship.

Meanwhile, Malawi’s Finance, Economic Planning and Development Minister Goodall Gondwe has conceded the country’s economy is passing through ‘turbulent times’, citing a sharp fall in the kwacha against other major currencies, huge amount of domestic borrowing and uncertainty over the resumption of budget support.

“Nobody would say we have normal economic performance for a country with a huge amount of domestic borrowing, a country with a huge amount of arrears, that we inherited, of more than K100 billion, a country whose donors withdrew budget support,” Gondwe is quoted by  Malawi flagship daily, The Nation.

“What is important is to sit down and look at the problems we are in,” he said.

IMF mission chief to Malawi Oral Williams said despite persisting economic woes, the domestic economy has demonstrated strong signs of considerable resilience.

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57 thoughts on “Collapse of confidence in Malawi economy – Legatum Institute”

  1. Vavlov says:

    It is stupid for minister Gondwe to attribute cashgate as one of the reasons for economic problems when in fact the culprits are known. Why is the government not thoroughly punishing these people, and getting back the looted money? Don’t bore Malawians the outdated minister

  2. chinyau says:

    Our economy has been hemorrhaging for far too long at the expense of poor and hardworking Malawians as a result of incompetent and exploitative breath stinking and sick leaders. Our parents, relatives and dear friends are suffering because of your ruthless decisions and inability to enact policies that will ultimately benefit ALL Malawians.
    I for one would like to see this administration act swiftly on behalf of Malawi as Nation for once. Our country has had several opportunities to turn things around however; those opportunities have only come and gone. It is suck a disappointment that our “leaders” have failed to come up with a workable framework/foundation for real development but instead have chosen to satisfy their personal desires and mimba zotutuma zawo.
    Malawi the “WARM HEART OF AFRICA now CORRUPTION” has nothing to be proud of since the inception of “democracy” and continues to deteriorate at the speed of light. Malawi has excruciating problems that need real immediate solutions and I am doubtful that the current regime has a clue at all especially if we have the very same devils continue to run and ruin this Nation to the ground. The persistent problems that we are faced with are homegrown problems that government has time and time again continued to neglect. Judging from the existing problems for example lack of jobs, security, hospitals, broken down educational system and lack of sympathy towards our teachers clearly has proven that government has is priorities stuffed up its ass. Remember that these are very fundamental responsibilities of government which in mind has not been the case. The very same government that ill treats its citizens by advocating tax hikes, negotiating unscrupulous deals with foreign companies aka Kayekera Mine and now Oil drilling on Lake Malawi.
    What about the Lake dispute with Tanzania?
    From one failed project to another seems to the order of the day. This government is yet to figure out how to deal the effects of the mining deal and now it (gov) has rushed into embarking on another intricate oil project which will definitely impact the livelihoods of the people and the environment.
    What lessons has government drawn from the failed mining project? And does government have any idea of the extent of the environmental and health damage caused by that other failed project? Do we have the resources, let alone the capacity, facilities and capabilities to deal with what will be facing the nation.
    I can’t stomach these disgusting excuses from the so called leaders as they have utterly displayed their ineptness. A bunch of ass wipes have ruined this Nation for decades.

  3. Black Market says:

    Weak laws, weak economy, tough laws sound economy. how come a chicken stealer gets 11years imprisonment while a 63million kwacha (cashgater) gets 3 years. How come only poor people get arrested and the rich are left free. How come foreigners are handled with kindergarten treatment when the citizens are oppressed yet the foreigners are busy destroying this country, and some1 should be surprised why our economy is getting worse and worse.

    IFMIS still porous, a civil service without ICT, how can you improve economy?

    Muisovatu inu.,

  4. Dudu says:

    You don’t get it guys. Donors wanted JB or Chakwera to win and they didn’t. Akufuna achoke

  5. Muropwana says:

    Peter, ulila uwona . Mavuto ndiwosayamba awa . Uphwisa kuti “mpwii”!

  6. Manda says:

    Chickens have come home to roost. Remember kayekere mine saga? Bingu had the loyalties deposited in his bank account in Portugal. It would not surprise any of us is APM is once again diverting the proceeds of any deals being signed. It is sad that we have leaders in this country that are more interested in stealing from the poor Malawi and filling their pockets. Greed at its best. It is no wonder the donors do not want to come back. Who would help us knowing we are not interested in helping ourselves? Cry my beloved country. The only options Malawi has is to get rid of these corrupt leaders by any means necessary. Jerry Rawlings did it in Ghana through coup after coup. I do not see why we can not do the same. There is no any other way that can save this country. We need to clean house and start on a clean slate. Nothing less will save our economy. The cancer is just too deep to contain.

  7. I am now getting extremely worried with how these oil/gas exploration deals are being handed out.

    Is parliament aware? I am not aware of what is happening. Is our country being sold off a piece at a time? Why are we not being informed of what is happening and the terms of these contracts.

    Which legal experts have vetted these contracts. We don’t need anymore poorly framed mining/ extraction contracts. Don’t cheat us that we have legal minds with expertise in mining/ extraction, so inform us who did this vital vetting?

    Please our leaders remember that you have been entrusted to act on our behalf, not your own. Keep us all informed, not a select few.

  8. manra says:

    Running a GVT is not like driving a car! let him lead and see where he has failled then advise him. Demostration will only cause distructions lets be bravo ,unite and awake coz independence is not dependence!

  9. Aliphee says:

    First lady was asking for immediate funding to go outside to attend World Toilets Day zowona zimezi HTD donating to BEAM to buy fevers zowana zimenezi? Mulli is back at capital hill chasing billions and u expect the economy to heal. Every thursday mulli has started collecting money in billions and where is Kapito just seating phwii. We have the information and we will start publishing it in bits and bits just wait the dance is about to start

  10. rational says:

    APM has inherited mess from JB. Donors had already left coz of JB so what are you talking about here? It has nothing to do with APM

    1. tsetsefly says:

      Bodza limenelo. Have you not heard that German has funded an investigation into the K92B. Peter and his later brother messed us due to large appepite for money at the old age.

  11. Life says:

    Malawians are totally useless. 1. You voted for a person you fully knew was involved in the cashagate, a phenomenon that needed to be cleared for donors to resume aid. As a result, he is doing nothing about it, since pursuing it earnestly, means exposing himself. 2. When it is apparent that this President is not going to solve the situation given his past record, Malawians are content to sit back and absorb the pain. Rubbish people. This is why you are “never to develop country” in economic language. What is the solution? Demand his resignation in order to bring a person who will not be tainted by cashgate for this mess to be cleaned. An individual with a record that they can perform not hide their face with the hope that by the time they open, the problems will have evaporated. It’s now or never

  12. ife kwanthu kumangoyangana basi.

  13. Chilungamo Chimawawa says:

    Apa tingopanga Burkina Faso style bus. We need mass demos and riots which will eventually force these idiots out!

  14. honey comb Chidyauzu says:

    This government has failed. Bola a mayi omwe aja. When she took power things began to improve immediately but when these people took over we are already going backwards. Eish .Musovenge.

  15. wooltang says:

    zinkumandinyasa mukamapanga ma comment anu opanda mzeru kumanyoza mtsogoleri lero pomwe u are the same people to vote for this nyansi bwanji osangokhala pansi mkumadya makaka anuwo anthu opanda tsogolo inu anthu ankanena voterani chakwera lero ndiye mukuti chani simunati matchona angoyamba kupanga zomwe amaziwa asiyeni ayendetse boma mwa ufulu ziwakanike okha

    1. Nalimata says:

      @ wooltag

      Nanunso get lost and get life. You look at issues with a simplistic and shallow mind. mukuganiza kuti anakatani munthu wanu Chakwerayo . Some things are easier said than done. “Spectators are always intelligent people”.

      1. tsetsefly says:

        Nalimata or whatever they call you. The difference btwn your two foolish proffessors and Dr Laz is the appetite for money. The bible say what shall man benefit if he gain the whole world and loses his life. We will not carry the money with us when we die hence the need for this cheap proffessor to understand that he must be a servant leader and not money spinner. Give us back our K92B please!!!!!!!!!!!!!!!!!!!

      2. Chilungamo Chimawawa says:

        To hell with ur comment wooltag, you will agree with what millions of people are complaining about by the time you idiot president collapses due to stress!

    2. Chilungamo Chimawawa says:

      kkkkkkkkkkkkkkkkkkkkkkkkkkkkkkk wandaiwaza muphwanga, indeed let him collapse on his own, because we cant see future here. We dont want him tomoro to say i failed to govern because of pressure as we know he is creating pressure on his own due to allogance

  16. Mccarty says:

    Indeed this your own fault malawians, I already said that APM is Useless, but people don’t listening.

  17. Nachipanti says:

    This same Goodall when he was a Minister of Finance nthawi ya malemu, zinthu zinali bwino… Today zitowavuta because akalamba and nzeru zidachita ndele. Big mistake nkudzazipanga associate ndi APM, amenenso sadalandire mdalitso wa a Malawi koma kukakamira kuti akalowe ku State House. Lero ndi awa akukanika kuyisova kwake equation. For sure Satana nde anakukhalirani pa msana nonse ndipo simunati… Mufota

  18. Nachipanti says:

    These folks do not have a clue at all. Dont blame it on the public looting. Just admit you are clueless. Fupa lokakamiza silichedwa kuswa mphika.. Munakakamira m’boma pamene a Malawi sankakufunani pano zikukuvutani…. Musovenge ndithu!!

  19. Yokwiya says:

    Bwampini akukavala gown ya Chancellor wa UNIMA uku ana aprimary akuchita ma demo. Kaya akwanisa kuyisova. Paja ya ma lecturer inamukanika.

  20. Mercy Thindwa says:

    Are we to survive? Oh my Jesus

  21. Palibe says:

    Koma Bwampini Game yagona msanga bwanji

  22. moto mwikho says:

    Whose confidence? This are arbitrary indicators. Who were they asking?

  23. DUWA KALIRANI says:

    A sova Pitara, mesa ndi Professor

  24. Lipupa says:

    Introduce the US dollar as Zimbabwe did and you will see change

    1. Zadziwika says:

      The so – called donors have no money! They shouldn’t cheat us. They have more problems than Malawi, let them solve their issues. Go to their countries’ rural villages, you will ask me. They are just being SHY to say they have NO MONEY.

      1. Mccarty says:

        You don’t know what you’re saying my friend, its better keep quiet than louder for nothing.

  25. Plebian says:

    JB Cashgate is used as a pretext to justify the economic mess we are experiencing now. The truth is that donors are tired of funding corrupt politicians in Africa especially Malawi. Donors must not fund corrupt regimes as that means wasting their hard earned taxpayers money. DPP has 92 billion to explain to Malawians & is part of the condition for aid resumption. Malawians should not cry because we have chosen Thieves whom donors have no confidence in but we trust them since this is a rotten nation that votes for rotten leaders that do rotten things that results in a rotten economy & we reap rotten life. Sorry. Anthu a ku South amatipatsa Mbava zokhazokha Muluzi, Bingu, JB pano Apa Pali Mavuto (APM).

    1. Patrick says:

      This is very true

  26. jmc says:

    KUKALAMBA KUMENEKU ANGAYENDETSE AMENEWA?

  27. njanji says:

    Heart breaking 2hear,hard 2bear,worrisome 2think,,only God can show us the way out,nevertheless,life goes on

    1. jimbo says:

      It is well passed the time to be looking to God for solutions to Malawi’s problems. What has God ever done for the country? Forget God. The solution to Malawi’s problems lies with its people. They need to produce politicians of real substance who are not corrupt and who have the good of the country at heart and not their own enrichment. The current bunch of politicians of whatever party are useless. What have they done for the country since independence? Can we see 50 years of growth and development and a country holding its own in the 21st century? If things are not moving forward, they are moving backwards, there is no standing still. There must be people with the knowledge and ideas to solve Malawi’s problems. They need the courage and support to put themselves forward to replace all the old ‘ have-beens’ who have had their chances and have done nothing. Get them out and replace them with new blood or Malawi is doomed to failure.

  28. Malawians says:

    Are we to survive? Oh! my Jesus

  29. Cheuledi says:

    Kuyendetsa dziko ndi kosiyana ndi kugulitsa ma cellular ….kosiyana ndi kuphunzitsa ma theories from mabuku…..kuba chisankho sikuti ndinu Madolo….Koma mukundiseketsa ngati zabwino!

  30. wina kumanyadira kuti ndi president!!!!!!!!!!!!!!!!! ya…………….h forsake!!!!!!!!!!!!!!!! mwakanika anguru!!!!!!!!!!!!! zitayeni… wina afapapo apa!!!!!!!!!!!!!!!!!!!!!!! pita with ur age, this pressure is too much!!!!!!!!!!!!! samala moyo wako !!!!!!!!!!!!!!!!!!!! anyway, pa nyo panu

  31. nthandalanda says:

    For how long shall you sit down on the chair and fix the problem? During your campaign, you told us that you are going to fix the problems in 100days! Now,100days have passed, what next?

  32. fisi Gammar says:

    Utsogoleli si school munya muona —————Koma simuithawa///////////////////////////////////////////////////??????????????????

  33. Star says:

    Simunati Munya muona

  34. mphidha says:

    one step at a time, lets work hard for our country other than fighting each other, lets stop hunger, disease and evil

  35. James Mwetanlihapo Nginele Elho says:

    Apolofesa sopano!!!!

  36. Muyeriwa says:

    Inu mumati a Malawi angadzuke as early as 5 am kupita kukavota thinking that their wishes will be respected, and you come and cheat them by declaring that the one who has won is the one the majority didn’t want, and you expect everything to be alright? You must be a bunch of fools ndithu . Maxon Mbendera, wherever you are, the God of Abraham will surely punish you, pangachedwe pangafulumire .

  37. Mojamoja says:

    Gondwe, please stop giving excuses, just fix the mess. That is exactly what you promised during the campaign

  38. Chikopa says:

    Don’t warry malawians it has been discovered that there is huge oil deposit in the southern region we are seating on huge oil

  39. christian says:

    Economy yavuta let’s assume that the values hv gone down to 0%s then pick t up from there,by upgrading govrnment. Busness, increasing tax payers by provide loans to small scale busness, provide job training to people, create agood invironment to private sector,avoide investors that consume our forex for the law matereal of their product and not generating any due to poor quality of their goods and acomodate those that can use our own law matereals and produce goods that can generate us forex.increase and improving agricuture sector by introducing technologies to the farm produce,reducing power of apresdent to avoide,apoint or firing people from their positions in order to end regoinalism,tribe, etc by puting asystem that can qualify all groups of people in this country to equal.to improv unity.improve seculiy by sensitising pipo how they can protect them selfs becouse police is not doing enough.thank u

  40. ambele says:

    Nyatwa pa Malawi

  41. DRAKE says:

    In 2013 Peter told Malawians that he has assembled the best team of Economists to look into to Economic issues concerning Malawi and he promised that the first few months in Government would revive the Economy. Now He is in Power and we are surprised that the very same people which were used by Joyce Banda Like the Governor of RBM is still in the driving seat driving the Economy theoretically and using academic methods. We need practical intervention per se, as Malawians we have the right to know which direction is the country taking and we have to hear the President coming out in the open to brief us on the current Economic Developments. We are worried once again to hear that Teachers are not being paid, No drugs in Govt Hospitals, Government failing to even fund our National Team for the pride of our Nation, but the system is able to fund political meetings and non essential activities involving politicians for their enjoyment.

  42. simulemba says:

    Good people is it really MK20 billion or we are hiding the real figure. I dont believe cashgate is wholly to blame. What about when Bingu was in power did we have another (silent) cashgate? There must be more to this than meets the eye. Let us move on guys let courts deal with this otherwise tichedwa.

    1. Baba wa Boyi says:

      That should tell you either there was no silent cash gate, or we can not do without donors

  43. The Truthful One from the West says:

    To be honest the Peter Mutharika DPP Government should not appear to be surprised now that they are in government. The problems Gondwe is mentioning were already known to Peter Mutharika when he and DPP told Malawians during campaign that they have the solutions to the problems. That is why Malawians booted out Joyce Banda and elected Peter Mutharika. If DPP are failing let them say so instead of hiding behind problems DPP knew when they were wooing Malawians to vote for them. I again largely blame Goodall Gondwe who showed incompetency in coming up with the 2014/2015 budget. Faced with a looming huge budget deficit and lack of budgetary support from donors a prudent Minister of Finance should not have recommended 3% reduction in income tax in the telecommucations sector. Furthermore he should have recommended a modest windfall tax on abnormal profits being made by businesses in some sectors of the economy which Goodall Gondwe knows. It is a pity that the so called former IMF expert has badly let down Malawians. I again remind Malawians that Goodall performed in 2004-2009 because of a strong vibrant and active MCP/UDF opposition that kept him on his toes. This is not case now as MCP is failing to keep Gondwe on his toes. The result is that Malawians are being punished with fees and charges that have gone up by over 300%.

  44. John says:

    Gondwe says Malawi’s economy is going through a bad patch due to “A huge amount of arrears that we inherited”.

  45. Zazi says:

    Problems problems,please comeup with a policy to burn importation of simple things which can be easily manufactured in the country eg tooth picks,ear swabs,soap etc.failure to do that we will cry and cry.

  46. GRACE says:

    GOODAL:SAULOS AND YOUR BROTHER PETER RESIGN ! RESIGN !PLEASE !!! FOR THE BETTERMENT OF THE POOR PEOPLE OUT THERE PLEASE PLEASE !!!

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