Malawi: Agriculture and Manufacturing driving 5%+ growth to counter falls in mining earnings.

Malawi’s economy continued to recover from the contraction in GDP experienced in 2012 as a result of slippage in macro-economic policies and withdrawal of budgetary support by development partners (DPs) over governance concerns, which precipitated an acute shortage of foreign exchange and fuel, crippling the economy. In 2014, the country’s economy is estimated to have grown by 5.7%, supported by strong expansion in agricultural and manufacturing output, construction, wholesale and retail trade, and services. The agriculture sector, which accounts for about 30% of GDP, grew by 6.1% in 2014 thanks largely to favorable weather conditions and enhanced agricultural input support to smallholder farmers under the farm input subsidy program (FISP). The output of maize, the main staple food, increased by about 8.6%, from 3.6 million tons in 2013 to 3.9 million tons in 2014 while production of tobacco, the main foreign exchange earner, increased by 14%, from 168 million kilograms in 2013 to 192 million kilograms in 2014. However, the average price of tobacco dropped from USD 2.15 per kilo in 2013 to USD 1.88 per kilo in 2014.

The manufacturing sector, which accounts for about 10% of GDP, grew by an estimated 5.5%, buoyed by improved foreign exchange availability o-processing and the revival in consumer purchasing power following the recovery of the economy. By contrast, the mining sector contracted by 8% as a result of the suspension of uranium mining at the Kayelekera mine because of depressed uranium ore prices. The price of uranium dropped from 70 US cents per pound in 2012 to 35 US cents per pound in 2013, rendering uranium mining operations in Malawi unviable.

Stay in the Know!

Sign up for the latest news and information on African Companies and Economy.

By signing up, you agree to receive MoneyInAfrica offers, promotions and other commercial messages. You may unsubscribe at any time.