A University of Malawi economics professor, Ronald Mangani, has raised concerns that the country’s economy remains sloppy, and has since suggested that it requires remodeling to get back to shape.
The former secretary to the treasury said Malawi, which is grouped among the category of war-torn country as the world’s poorest, is still trending towards fragility and failure, with no self-correction mechanism in sight.
In his paper ‘‘Remodeling the Economy into Shape: The Economic Chisels We Need’ presented at the Institute of Chartered Accountants in Malawi (Icam) conference over the weekend, Mangani’s argument augers with recent statistics, which show that, between 1994 and 2019, Malawi’s annual real economic growth rates have averaged 4.3 percent, within striking distance of the country’s population growth rate.
“Demographic pressure is our biggest risk factor,” said Mangani, while projecting that the population would swell to 44 million people by 2025.
He added: “Factionalised elite, weak economy and poor public service are among key pressure points, while Covid is an additive factor to perpetual national crisis. Government should hastily intervene with policy direction towards efforts aimed at industrialising the economy.”
According to Mangani, trade liberalisation has killed local industries and jobs and that the “government watched helplessly as the economy nosedived.”
He said: “Tough decisions would have to be made on the role of the state, on financing the private sector investment and monetary policy, on financing public sector investment and on trade and foreign exchange earnings.”
Malawi has had both long and short-term development blueprints which have measurably failed to elevate the economy.
For instance, the Vision 2020, which expired last year, was coined to direct the country towards reducing poverty but above 50.7 percent of the population are still living below the poverty line of $1.90 per day while 25 percent live in extreme poverty.
Experts’ reviews of the blueprint exposed Malawi’s inability to achieve a middle income status with a per capita income of $1,000 (about $780,000) per year.
Mangani said reversing the trend would take concerted efforts with the government still required to set the tone.
“The worsening trend of fragility and impoverishment will not correct itself,” he said.
Speaking during opening of the Icam indaba earlier, Vice President Saulos Chilima called on accountants to join in the transformation of the country.
He said the task of rebuilding the economy should be championed by disciplined professionals.Follow and Subscribe Nyasa TV :