Malawi falls on global economic freedom index

A new report published this week by The Wall Street Journal and Washington’s think-tank The Heritage Foundation, has indicated that Malawi fell on economic freedom—a measure that includes property rights, control of government spending, monetary freedom and trade freedom.

Malawi was rated as unfree having scored 54.8, which is 0.6 points lower than last year, ranking 126 out of 178 economies.

Regionally, Malawi is ranked on position 25 out of 46 countries in sub-Saharan Africa while its overall score is below the world average.

The think-tank said the country’s performance reflects a decline in property rights, control of government spending, monetary and trade freedom, outweighing gains in business and investment freedom and also freedom from corruption.

Recently, London based Legatum Institute  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.

“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.

Finance, Economic Planning and Development Minister Goodall Gondwe has conceded  the country’s economy is passing through ‘turbulent times’,  but said government  implemented a number of reforms that could improve the situation.