An economist is predicting an economic disaster should the Chakwera administration heed calls from donors and other experts to stop the Affordable Input Program (AIP).
Prof Dr Winford Masanjala
Associate Professor of economics at the University of Malawi, Winford Masanjala, said although the fertiliser subsidy programme has not delivered value for money in terms of productivity and food security, a major withdrawal of the subsidy could precipitate a food security as well as economic crisis.
Masanjala said this in his presentation at the Ben Kaluwa Seminar Series titled: Can Malawi Sunset the Fertiliser Subsidy Programme? An analysis of policy Options.
The former Ministry of Economic Planning and Development and Public Sector Reforms principal secretary observed that the current category of targeted farmers may not bring about the necessary agricultural transformation envisaged in the Malawi 2063.
He observed that the high costs of the subsidy programme pose serious questions about its fiscal and macroeconomic sustainability and that overreliance on imported fertiliser puts pressure on the country’s ability to raise foreign exchange reserves.
According to Masanjala, food insecure household costs have increased from K81 million in the 2007/08 season to K11.2 billion in the 2020/21 season despite having an average maize surplus of 1.15 million metric tonnes (MT).
