April 17, 2014
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President Bingu wa Mutharika

President Bingu wa Mutharika

Despite a growth rate of nearly 10 per­cent, most Malaw­ians remain poor. Accord­ing to the World Bank, they live on less than 180 U.S. dol­lars a year, and have a life expectancy of 40 years. Nearly half of the pop­u­la­tion is chron­i­cally mal­nour­ished. The main­stay of Malawi’s econ­omy is agri­cul­ture. Tobacco,the main cash crop, accounts for more than 70 per cent of exports, but has been expe­ri­enc­ing a decline in prices in the last two years. The coun­try now wants to diver­sify the prod­ucts it sells abroad.

Pres­i­dent Bingu wa Mutharika, re-elected May this year for a sec­ond term, is hop­ing to take advan­tage of new oppor­tu­ni­ties on the world mar­kets.

“Right now, one [crop with big earn­ing poten­tial is] rice because there is heavy demand, [and a global] short­age. At the moment, the major rice pro­duc­ers, India, Pak­istan, Indone­sia, the Peo­ples Repub­lic of China and Malaysia are not pro­duc­ing enough. So Malawi can quickly pro­duce more rice, [which] can com­pete favor­ably with tobacco in terms of for­eign earn­ings,” says the Pres­i­dent.

To build a sta­ble econ­omy, Mr. wa Mutharika says his coun­try is look­ing beyond agri­cul­ture to other nat­ural resources.

“We are going to go into gold [and] baux­ite min­ing. [In addi­tion] we have heavy min­eral sands, emer­alds and pre­cious met­als,” says Pres­i­dent wa Mutharika.

Malawi’s econ­omy is reg­is­ter­ing impres­sive growth, which Mwiza Munthali, Pub­lic Out­reach Direc­tor at the TransAfrica Forum in Wash­ing­ton, attrib­utes to the work of Pres­i­dent Wa Mutharika.

“The gov­ern­ment seems to have a strat­egy, a vision. There are some tan­gi­ble things. [There’s more] infra­struc­ture than five years ago. The roads don’t have as many pot holes, and new ones are being built,” Munthali says.

The Eco­nom­ics Intel­li­gence Unit, a lead­ing research and advi­sory firm, has fore­cast that Malawi will have the world’s fastest grow­ing econ­omy after Qatar this year.

Munthali says only time will tell how the future plays out.

“Peo­ple have to be care­ful. When you just look at the growth rates. Is it growth with­out jobs or with jobs? So we have to be care­ful on how we look at the fig­ures,” Munthali warns.

Malawi’s econ­omy has also been affected by high HIV/AIDS rates. But it has made progress since 2004 in curb­ing the spread of the dis­ease, and Pres­i­dent wa Mutharika pre­dicts more gains in the com­ing years.

“Right now, Malawi is prob­a­bly the top most coun­try in its suc­cess in man­ag­ing HIV in Africa, if not the world. The rate of infec­tion was going up when we started, then sta­bi­lized and now is going down which means the mes­sages are com­ing through,” says Pres­i­dent wa Mutharika.

Many ana­lysts believe the country’s eco­nomic suc­cess may depend on how the pres­i­dent man­ages the country’s polit­i­cal tur­moil. A pro­tracted power strug­gle with for­mer pres­i­dent Bak­ili Muluzi and lead­ers of the oppo­si­tion almost paral­ysed par­lia­ment, prompt­ing a failed impeach­ment bid and claims of a coup plot.

Pres­i­dent wa Mutharika has promised to step aside at the end of his sec­ond term in 2014, as required by law. This is expected to re-assure investors and West­ern donors and keep Malawi on the path of growth.

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