By Burnett Munthali
Africa-Press – Malawi. Malawi gained independence from Britain in 1964. In the 1970s western banks, governments,s and institutions all lent large amounts to the country. At the start of the 1980s, the debt rapidly increased when interest rates rose, whilst the price of exports such as tobacco and tea fell.
In 2021, Malawi exported $437M in Raw Tobacco. The main destinations of Malawi exports of Raw Tobacco were Germany ($92.4M), Russia ($70.6M), Ukraine ($56.6M), Poland ($40M), and Turkey ($21M).
According to Tobacco Commission, On the first day of the 2023 selling season, the highest auction price was $2.40, and the lowest price was $1.15.
In 2023, the approximate wholesale price range for Malawi black tea is between US$ 2.8 and US$ 17.5 per kilogram or between US$ 1.27 and US$ 7.94 per pound(lb).
Gross debt in Malawi
Malawi is in big debt. Not included in the gross debt are the demands of a country on foreign ones. The gross debt in Malawi in the period from 1998 to 2021 was between 716.0 million and 8.1 billion USD. The highest level of the last years at eight billion US Dollars was reached in 2021.
GDP for Malawi as of 2021 was $12.63B, a 3.65% increase from 2020. Malawi’s GDP for 2020 was $12.18B, a 10.49% increase from 2019. Malawi’s GDP for 2019 was $11.03B, an 11.59% increase from 2018. Malawi’s GDP for 2018 was $9.88B, a 10.48% increase from 2017.
The richest district in Malawi is in the south and covers an area of 6,273 square kilometers. It is the Mangochi District, with a population of 610,239.
Nsanje is one of the poorest districts in Malawi and is virtually dependent on government and NGO aid organizations Major income comes from smallholder farming. Maize, millet, sorghum, rice, sweet potatoes, beans, and cotton are all grown using almost entirely rain-fed agriculture.
The biggest economic activity in Malawi is subsistence farming. Nearly 90% of the population engages in subsistence farming. Smallholder farmers produce a variety of crops, including maize, beans, rice, cassava, tobacco, and groundnuts (peanuts).
Between October 2022 and March 2023, the situation is expected to deteriorate, with 3.8 million people in Malawi (20% of the population) expected to face high levels of acute food insecurity (IPC Phase 3), an increase of 7% compared to the current period.
The biggest challenge facing Malawi is that around 70% of people in Malawi live below the international poverty line. The population has grown from five million in 1975 to over 21 million today. This has put huge pressure on all of Malawi’s natural resources.
Some countries will grow fastest in 2023 according to a research report released on 14 April 2023. The fastest Developing Countries in 2023 include Cambodia, India, Philippines, Benin, Niger, Ethiopia, Rwanda, Democratic Republic of Congo.
Conclusion
Malawi is facing an economic slowdown in 2023. We forecast real GDP growth in Malawi slowing to 0.7% in 2023, down from an estimated 1.0% in 2022. This trend will reflect the impact of Cyclone Freddy in March 2023, which damaged crops and will pose significant challenges for the all-important agricultural sector.
The government’s poor response to the AIP fertilizer program and Cyclone Freddy has worsened things as they were slow and unrealistic.
Evacuation from potential storm tide inundated areas should have been done with speed but it was slow, in fact very slow. Winter cropping is the next solution for the Cyclone Freddy survivors. Let’s ask ourselves, has the government done that? If not then why do we have a leader?
Therefore, ladies and gentlemen, get ready and tighten up your belts as we nose dive. Swim while you can, do what you can, hard times are coming.
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