Malawi President Peter Mutharika statement that the country’s economy is projected to register a real Growth Domestic Product (GDP) of 5.4 percent in 2015, has been taken with a pinch of the salt by captains of the business industry.
Mutharika said despite the devastating floods and dry spells that damaged tobacco and corn crops, Malawi expects its economy to grow by 5.4 percent this year.
He said growth would rebound in 2016, reaching 6.5 percent.
But the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has said it is difficult for the government to justify the technique that will be used to register a projected real Gross Domestic Product (GDP) growth of 5.4 percent this year .
Floods in January displaced more than 200,000 Malawians and killed at least 176. Tobacco is Malawi’s largest export earner and the country is Africa’s largest supplier of the burley, or air-cured, variety of the crop.
MCCCI Chief Executive Officer Chancellor Kaferapanjira said the failure to pay a larger part of the K157 billion arrears that the government owes suppliers has resulted into inactivity among several businesses.
“The president is talking about the projected growth of about 5.4 percent but I do not know where that will come from, if we consider the conditions on the ground. The agriculture sector, we know, will suffer a lot because of the weather conditions which include very long dry spell. I, therefore, do not see where such kind of growth will come from. The alternative source of growth would be the private sector but then, the government owes these people a lot of money.
“He is talking about industrialisation, he is talking about private sector thriving. But we have seen how much the economy had shrunk and I am telling you from the experiences of our members because we visit them and I can tell you there is literally no activity in the majority of the businesses. K157 billion of arrears is a lot of money for the private sector,” Kaferapanjira said as quoted in the Daily Times.
He said many companies are writing the Ministry of Labour that they are retrenching so many people because there is no activity.
“ It is very sad. Then we hear the President saying we are delivering on our promises. But are we becoming any richer? Our per capita income has gone down and people are being laid-off, is that prosperity?” he said.
Kaferapanjira said the banks are now reluctant to give loans to some businesses fearing that they will not pay back which is also affecting the banks as thrive on people’s borrowing.Follow and Subscribe Nyasa TV :