Inflation picks up Pace and increases to 9.3%, Interest Rates remain at 16%
Malawi’s headline inflation quickened by 0.3% in August to 9.3% as escalating food prices continued to bite, the National Statistical Office (NSO) has said. This was the second month inflation has surged after making a u-turn in July. The continued rise in inflation comes at a time Malawians are expecting another significant jump in electricity tariffs with the Malawi Energy Regulatory Authority (Mera) board of directors meeting this week to give a go ahead to the Electricity Supply Corporation of Malawi (Escom) to raise prices by 53% this year.
Malawians have in recent months struggled with surging food prices and transport costs. In addition, energy prices have jumped, following a 7% electricity price hike by Escom. NSO said food in…
Hydroelectric Power Generation to be supported by Renewable Energy Sources
As Malawi continues to face persistent power challenges, the Department of Energy Affairs in the Ministry of Natural Resources Energy and Mining has underscored the need for the country to embrace alternative energy sources to fuel further growth.
Speaking in Mzuzu during a five-day short course on Renewable Energy Systems Modelling and Simulation for Mzuzu University alumni, Chief Director of Energy Affairs, Chimwemwe Banda, said Malawi needs new innovations in the power sector if the country is to meet the growing energy demand to supplement hydroelectric power. “As of now, Malawi is going through a critical stage in the energy sector. Therefore, we must have power which is not connected to the main grid and by training more profess…
After three tough Years, the Phoenix is finally rising from the Ashes
Things are beginning to look up in Malawi and the outlook gives rise to optimism at the same rate as the economy seems to see the rise of the proverbial Phoenix from the Ashes!!. We are projecting a growth recovery, with living standards for the average Malawian set to improve for the first time in three years.
Those last three years have been tough ones for Malawi. The economy was already under stress after a big corruption scandal in 2013 sent the country into an economic tailspin, and led to the suspension of direct budget support to the aid-dependent economy. Then came an El Nino double whammy – severe flooding in 2015 followed by the worst drought in a decade in 2016. This left 40% of Malawians without food. And economic growth …
Ministry commits itself to ease Conditions for Doing Business
Malawi’s Ministry of Industry, Trade and Tourism has said it is keen to create an enabling environment to improve the ease of doing business.
The minister responsible Joseph Mwanamvekha said this on Wednesday in Blantyre at a high level doing business forum which was organised in collaboration with the World Bank. Over the past four years, Malawi’s rank on the World Bank ease of doing business index has shown some positive movements. From position 171 in 2014, the country went up to 164 in 2015, 141 in 2016 and to 133 in 2017. Malawi was on position 96 on the index in 2006, which means that government’s dream of being in the top 100 countries is achievable.
Mwanamvekha said government will aim to be in top 100 aided by the continue…
High Interest Rates remain, Inflation down
The latest figures from the economy at Lake Malawi are little encouraging. Malawi’s central bank kept its benchmark lending rate unchanged at 27% saying it would continue to monitor food inflation and economic growth in the midst of a severe drought that has ravaged its key agriculture sector. The bank said that while inflation had come down in recent months, this was mainly due to non-food inflation, and that risks to consumer prices remained on the upside.
On a good note Malawi’s consumer inflation slowed to 22.1% year-on-year in March from 23.4% in February, but remains at elevated levels which the government is keen to bring down.
IMF sees Key to further Growth by Tackling Inflation
Reducing inflation is the most important policy issue for Malawi in the near term, the IMF said in its recent review of the country’s economy.
The report shows currency depreciation and uncertainty about the future direction of policies have kept inflation above 20 percent on average. The economy, heavily dependent on aid flows, is still feeling the effects of the large-scale theft of public funds uncovered in 2013.
The scandal, known as “cashgate,” prompted donors to suspend all budget support, forcing the government to print money to cover the deficit. A poor maize harvest caused by heavy floods and drought in early 2015 has exacerbated the problem by raising food prices and pushing inflation up further.
“If left unaddressed, in…
President optimistic to turn around Country within 5 Years
Malawi President Peter Mutharika has said his government has stepped up efforts aimed at transforming the country into a more skilled and export oriented economy within five years. ￼￼￼￼￼Mutharika made the sentiments during a Televised Session cast live on CNBC-Africa which was part of the World Economic Forum summit dubbed ‘Annual Meeting of the new champions’ currently taking place in Dalian, China. "I think China had been very pragmatic in its approach by focusing on rural development; we are doing the same in Malawi. We have decided to take a massive training approach for the youth in rural areas we are moving social amenities such as schools and hospitals to rural areas where most people are; we give them skills training right there….
Government not supporting Boycott of SA Products
Malawi’s government said it does not support a call by a consumer group for a boycott of South African products in protest against deadly attacks on foreign nationals in that country. South African investors have been asking if the campaign, dubbed Black Fridays, represents the government’s view, Minister of Information Kondwani Nankhumwa said on Thursday in a statement.
“The government of Malawi will support the process of dialogue which President Peter Mutharika has initiated,” he said. At least seven people have been killed in South Africa in the past two weeks, thousands have been displaced and the army has been deployed to end attacks on immigrants. The Consumers Association of Malawi has called for shoppers to don black clothing…
Growth Forecast will probably not be met ....
Malawi will most likely miss this year’s 5.8% economic growth forecast after weeks of heavy rain killed scores of people and washed away the country’s staple crop, President Peter Mutharika said.
“Preliminary assessment shows that the damage caused by the flood disaster to the economy is estimated at $54m, excluding the cost of the relief programme currently underway,” he said. More than 8 billion kwacha worth of maize, rice, groundnuts and cotton was lost in the flooding in the country primarily dependent on agriculture, Mutharika said in his state of the nation speech. About 3.6 billion kwacha would be needed for replanting some of the 63 500 hectares of submerged land, he said.
More than 60 people have been killed in the floods…
Revenue Authority advises Employers on Fringe Benefit taxation
The Malawi Revenue Authority (MRA) is advising all employers that for the quarter that ended 30th June, 2014, the applicable commercial rate for calculating Fringe Benefit Tax on concessional loans provided by employers is 36 percent. According to a press release endorsed by its former Commissioner General, John Biziwick the Public is reminded that paragraph 5(e) of the Fringe Benefits Tax Regulations to the Taxation Act stipulates that where an employer provides a loan to an employee at an interest rate lower than the prevailing commercial rate, the resulting interest difference or saving is recognised as a fringe benefit.
“For the purposes of determining the fringe benefit under the said regulation, the lowest rate ruling on the for…