El Nino threatens 2018 GDP prospects

Post was last updated: October 4, 2018

By Taonga Sabola:

Economic commentators have warned the anticipated El Nino weather during the next growing season could seriously threaten Malawi’s economic growth prospects for 2019.

Finance Minister Goodall Gondwe predicted in the 2018/19 national budget that the local economy would swell by 4.1 percent in 2018 and six percent in 2019.

Gondwe attributed his prediction to what it described as “the many infrastructure development projects lined-up in the energy and agriculture sectors, most of which are growth enablers.

“Government is committed to continue implementing sound macroeconomic policies aimed at spurring growth and creating jobs by focusing on productive sectors as outlined in the MGDS II I with strong multiplier effects,” Gondwe said.

But the Department of Climate Chang e Meteorological Services on Monday warned that there is a likelihood of moderate El Nino weather condition during the 2018/2019 rainfall season which would influence floods and drought in some areas of the country.

The El Nino threat comes at a time Malawi is yet to address the challenge of fall army worms which terrirised growers during the last growing season.

Department of Climate Change Meteorological Services Director, Jolam Nkhokwe, said El Nino is expected hit Malawi between September and November.

Nkhokwe said during the period October 2018 and March 2019, most of the Northern areas spilling over into North of Central areas of the country are expected to receive normal to above normal rainfall patterns, while in most of the Southern areas spilling over into South of Central areas of the country are expected to receive normal to below rainfall amounts.

“This implies that the impacts associated with reduced or increased rainfall amounts such as prolonged dry spells and floods, respectively are likely to occur during the season,” he said.

Chancellor College professor of economics, Ben Kaluwa, said overreliance on rain fed agriculture has left Malawi vulnerable to shocks in the weather patterns.

Kaluwa said Malawi continues to over rely on agriculture to propel the economy.

He said the once a year type of agriculture Malawi practices worsens the situation as any pockets of crop failure results in hunger.

Kaluwa observed that Malawi should have invested in irrigation agriculture a long time ago to hedge against changes in the weather patterns.

“The challenge is that most initiatives in agriculture are government led. We should have made agriculture attractive to the private sector, by among other things, putting in place incentives to attract private investment.

“We need to transform our agriculture so that it is run as a business,” Kaluwa said.

Dean of Social Sciences at Catholic University, Gilbert Kachamba, said on Tuesday, an anticipated bad weather pattern would translate into an economic shock since Malawi still heavily relies on agriculture.

“As a country, we need to make advanced plans on how we can mitigate the impact of this weather shocks.

“We can store enough food [maize] and advise households to grow food crops that will sur vive these weather conditions,” Kachamba said.

Gondwe could not be reached for comment on the possible impact of the El Nino on the economy.

But Minister of Agriculture, Joseph Mwanamvekha, said there is no need for panic as Capital Hill is putting in place measures to minimise the impacts of the El Nino.

Mwanamvekha said Capital Hill continues to buy maize despite having enough stocks to cover this year.

He added that government has put in place restrictions to avoid unnecessary exportation of maize from Malawi.

El Nino is an unusual warning of waters over the Eastern Central Equatorial Pacific Ocean and is known to influence rainfall patterns across the world including Southern Africa and Malawi.

Moderate El Nino phenomenon was also experienced in 2002/2003 and in 2009/2010 in Malawi.

Let us know what you think of this update and remember to add us on our facebook and follow us on our twitter. Make sure to come back daily for more Malawi business news updates.

Quick Links: Malawi Banking News | Malawi Technology News | Download Business eBooks | Ten Signs You Are An Entrepreneur | What is a Managing Director?

Today’s top business story: Top Commercial Banks In Malawi

Source link