Malawi's cost of living rising rapidly-survey

Centre for Social Concern, a body that come up with monthly surveys of cost of living in Malawi has said Malawians are struggling to make ends meet due to the current economic turmoil.

The group says in its “Statement on the Status of Economy” in Parliament, the Minister of Finance Ken Lipenga, indicated that the economy would slowdown by 0.9, from 6.9% to 6% in the current fiscal year. The International Monetary Fund (IMF, 2011) projections paint even a grimmer picture.

According to the Programme Officer for Social Conditions Programme, Alex Nkosi, this means that the economic gains Malawi has garnered in the recent past are not making a real impact in the pervasive poverty to enable significant improvements in social conditions.

Economic plunge worsens cost of living

He said correspondingly, the Centre for Social Concern’s ‘ Urban Basic Needs Basket’ for November shows that the cost of living on essential food items continues to skyrocket.

CfSC has noted that in the month of November 2011 certain products in the food basket like Maize, Beans, Usipa, Utaka, Kapenta and Bread have increased tremendously from the previous month, while others have maintained or slightly gone up.

For instance, the price of maize has surged upwards tremendously.

Mzuzu, the hardest hit, has witnessed an average maize price rise by 28.2% (K2,200 per 50kg bag) in November as compared to average price in October which was at K1580.

On average, the same trend has been observed in all the major cities: in Lilongwe it went up by 11%, Zomba 13% and in Blantyre maize registered an increase of 10%.

Most sellers in the market attribute the increase to scarcity of the commodity and an increase in the cost of transportation.

In Zomba the price of bread has gone up by 27.8%. In October (on average) a loaf of bread was at K153 and in November it went up to K212.

The survey has revealed a similar price tendency in Blantyre, Lilongwe and Mzuzu where prices have gone up by 25%, 20% and 11.4% respectively.

According to Bread Bakers, the price increase is attributed to an increase of wheat flour (most of which is imported) and transportation costs in delivering the commodity.

All in all, the average cost of the CfSC food basket for a family of six rose by 10.9% from K29, 470 in October to K33, 107 in November.

The average total Basic Needs Basket comprising food and no-food items for a family of six for Mzuzu, Lilongwe, Zomba and Blantyre has increased to K61, 778 in November from K57, 407 in October, 2011.

Of great concern is the rise in the price of maize, a staple food for Malawians and bread, a commodity mostly used by urban dwellers.

“The increasing gap between people’s income and the cost of living invokes a question as to how poor Malawians are making ends meet. As the figures indicate; the obvious consequence of the rising costs of food items is that the purchasing power of low-income and middle-income consumers continues to deteriorate resulting to diminishing levels of disposable income,” said Nkosi.

He said lack of disposable income has adverse effects on the economy since its people’s ability to spend that stimulates the market and being a rainy season, low-income earners will be hit hard by this sharp rise in the cost of living because most households will have to buy farm inputs in the midst of nonexistent disposable income.

Price rises are also being blamed on new taxes designed to recoup revenue as donors and investors lose trust in Malawi’s fiscal policy.

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