Malawi has taken a long time to recover after a severe storm hit the nation in 2019 and the impacts of the COVID19 epidemic that followed.
Malawi has rebased its nominal GDP, which currently stands at 8.2 trillion kwacha (about 10.9 billion USD) as part of its recovery efforts.
Domestic revenue is expected to reach 1.2 billion kwacha, mostly from taxes and levies. Early in February, he stated at the start of the national budget meeting for 2022/23 that the economic recovery measures being implemented as part of the government’s socio-economic reform plan will assist the country’s GDP rise by 4.1 percent this fiscal year.
Tolulope Adeleru-Balogun is joined by Hubert Patrick Nanthambwe, a Malawian development economist working in Kenya, on Business Edge to discuss Malawi’s 2022 budget, which focuses on growth.
“The economy of Malawi has been performing well, especially since 2016,” adds. “However, the consequences of the coronavirus pandemic and the cyclone were felt in 2020 and 2021 following 2019.”
The impacts were most visible in Malawi’s GDP, which shrank by 0.8 percent. Similarly, before 2019, Malawian people’s well-being was improving, with a 1.8 percent gain in per capita GDP, which was mostly reversed the following year. To make up for the shortfall, the government borrowed heavily to close the deficit.
All of these appear to be taken into account in the 2022/23 budget, which includes 11.1 billion kwacha in social cash transfers to sustain a segment of the population the government refers to as “ultra-poor,” as well as 820 billion kwacha in development spending.
Nonetheless, as Malawi begins on this economic recovery and growth phase, its debt is a source of concern. Malawi’s government intends to borrow 237 billion kwacha from abroad to cover the deficit in its budget.
“Like many other African countries, Malawi is deeply indebted: its debt profile is now about 8 trillion kwacha,” says Hubert Patrick Nanthambwe (452 billion dollars). To avoid delaying the country’s development, it will restructure its domestic obligations to have a longer maturity time.