Africa-Press – Malawi. Before Reverend Lazarus Chakwera took over office of the President, COVID-19 was already prevalent in the country since 2019. While the President was in opposition, he challenged that Democratic Progressive Party (DPP) government was very corrupt and hiding behind COVID-19 with the aim of avoiding elections from taking place at the time.
Chakwera challenged that he would change everything in the way of running government business for the betterment of Malawians within the first two years of being President, failure which he would resign.
Chakwera has given COVID-19 as an excuse many times for failing to show any significant progress on the ground which he claims has prevented him from implementing his master plan to develop Malawi.
Lucky enough, COVID-19 has come to an end as masks are no longer compulsory and cases have drastically reduced. Top economists warned COVID-19 impacts would be severe and long-lasting for developing countries
UN high-level advisory board urged international solidarity to prevent the COVID-19 crisis from pushing countries further apart Malawi, like other southern African countries, has endured several waves of infection since the COVID-19 pandemic started. The disease has had severe effects on the economy, including the agriculture sector. Africa
Policy options faced the COVID‐19 crisis in Africa
Pre-COVID-19 conditions and macroeconomic impact: supply and demand shocks had a strong impact on growth and development. The health and economic shocks quickly put some African countries on an unsustainable debt path African national debts had risen in recent years
The Zambian economy rebounded in 2021, with GDP growing at 4.6%, from a contraction of 2.8% during the pandemic in 2020. Its recovery was driven by high copper prices, post-election market confidence, and continued recovery in agriculture.
Economic activity remained positive in the first half of 2022. GDP grew by 2.4% in 2022, supported by a pick-up in services that offset declines in agriculture, mining, and industry. A strong trade surplus in the first half of the year has continued to support a healthy current account surplus.
Similarly, the kwacha exchange rate maintained relative stability after a sharp appreciation in the post-election period, buoyed by favorable market sentiment and copper earnings. GDP was projected to grow by 3.8% over 2022–24, buoyed by an improved macroeconomic environment; a positive copper price outlook and stable and predictable mining policy environment; and improved electricity supply.
The implementation of structural reforms aimed at removing market distortions and bringing financial sustainability to the energy sector (electricity and petroleum), improving transparency, and fighting corruption, were also critical to achieving this growth path.
Many of Malawi’s businesses have been hurt by COVID-19, but informal food markets continue to thrive. Malawi’s three-year pathway on fast economic growth has been interrupted by the global COVID-19 (coronavirus) pandemic, but the full extent of the impact was still uncertain as the crisis unfolded.
Malawi’s economy grew by 4.4% in 2019, a marked increase from 3.5% in 2018 supported by a rebound in agriculture production, as maize and key crops increased
Before the first case of COVID-19 was announced in Malawi, hair salon owners would tend to an average of 20 clients a day in the City of Blantyre, bringing home about $180.
Then the government announced the lockdown to stem the spread of the coronavirus, and business slowed. At the end of a 10 hour day, the hair salon owners only tended to three customers.
The Malawi Economic Monitor (MEM), From Crisis Response to a Strong Recovery, explained that while the widespread economic impact of the COVID-19 crisis would be felt in the fourth quarter and beyond, the negative trends were already observed in many small-scale businesses and business owners.
When Government announced the lockdown in April, enforcing social distance measures and closing borders, business significantly shrunk because at that time some businesses had run out of products
The demand for domestic workers had reduced because most people were now working from home and schools remained closed. Therefore, families could manage daily household affairs with support from relations and their children. The need for an extra hand was no longer there. This situation was even worse for domestic workers who used to commute from their homes to work because the threat of COVID-19 was now high.
While the lockdown never went into effect, the government’s initial steps to address the health and economic impact of the epidemic such as expansion of social protection, fiscal and monetary measures, as well as steps to support the financial sector and the expansion of mobile money services, had significantly lessened the impact.
Amid pandemic, Tanzania had an opportunity to sow the seeds of future resilience. A new World Bank economic analysis projected Tanzania’s growth would decrease sharply in 2020, due to the impact of COVID-19.
Lives and livelihoods had already been impacted, according to a report, and a simulation showed the decrease in growth could bring an additional 500,000 Tanzanians below the poverty line.
The report recommended building on Tanzania’s favorable macroeconomic conditions to support a robust health and economic policy response that could mitigate negative effects and positioned the economy for recovery in 2021.
As the COVID-19 (coronavirus) pandemic continued to exact its toll on economies globally, a new World Bank economic analysis showed the costs of the pandemic are already being felt in Tanzania.
With a Special Section on the Role of ICT, the country’s growth remained solid in 2019, but projected gross domestic product (GDP) growth to slow sharply to 2.5% in 2020, down from the 6.9% growth the government reported in 2019. As the impacts of the pandemic continued to unfold, the report also warned of the risk for even slower growth if government’s policy response is delayed or not well-targeted, or the external environment did not improve markedly that year.
This projection follows April’s Africa’s Pulse, the World Bank’s regional economic update, which showed that the COVID-19 crisis could spark the first recession in Sub-Saharan Africa in 25 years. The Pulse projected a decline in regional growth, from 2.4% in 2019 to between -2.1 to -5.1% in 2020.
The pandemic came at a time when poverty reduction in Tanzania had lagged despite strong economic growth over the past decade. As a result, many people remained vulnerable to falling back into poverty amidst any shock. This underscored the need for stronger policies and investments in safety nets and human capital to ensure future resilience.
Tanzania was in a better position than many other countries in the region to respond to the crisis, given favorable commodity price changes as an oil importer and gold exporter, as well as fiscal space given its relatively low fiscal deficits and low risk of debt distress.
Further economic measures were considered to help protect viable businesses and prevent layoffs. In Africa, the World Bank’s response to the economic crisis focused on three main areas;
•protecting lives;
•protecting livelihoods and
•supporting recovery and growth.
The TEU noted that with the country’s favorable economic conditions, this approach provided a useful framework for the government to consider priority policy actions to prepare for recovery in 2021.
The World Bank commended Zambia on a strong reform program to restore macroeconomic stability and promote a private sector-led economic recovery from the COVID-19 crisis. Zambia made strong strides in its efforts to drive macroeconomic recovery from COVID-19.
The World Bank welcomed the government’s prioritization of social sector spending even as it implemented these reforms. The World Bank commended the country’s improved transparency in debt management and reporting, as well as its commitment to increasing budget credibility, as these were essential to restoring fiscal sustainability.
Zambia’s macroeconomic response to COVID-19 included a commitment to prioritize improved public financial management and greater transparency. The Bank looked forward to further engaging with the government on how World Bank resources could best support job creation and economic transformation, and ensured a green, resilient and inclusive future for all Zambians.
The International Finance Corporation (IFC), a sister organization of the World Bank and member of the World Bank Group, had a significant portfolio in Zambia, mostly in agribusiness, financial services, and manufacturing. The current IFC portfolio in Zambia includes 13 projects, totaling US$86.5 million, which is made up of an investment portfolio of US$55.9 million and a pipeline totaling US$155.8 million.
Finally, you will notice that Malawi did not make strong efforts to make economic recovery from COVID-19 except for lamentations by the President and his cabinet. Malawi has failed to move forward because of leadership crisis, lack of clear direction and above all, rampant corruption in government. Many resources are being wasted or stolen everyday and we are getting nowhere.
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