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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Vavlov
Guest

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

chinyau
Guest
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… Read more »
Black Market
Guest

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.,

Dudu
Guest

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

Muropwana
Guest

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

Manda
Guest
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… Read more »
Concerned citizen
Guest
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… Read more »
manra
Guest

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!

Aliphee
Guest

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

rational
Guest

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

tsetsefly
Guest

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.

wpDiscuz

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