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| Business |
| Cut dependence on agriculture, economists advise govt |
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by
Ephraim Munthali, 02 February 2004
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16:41:03
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Economists on Monday said Malawi should gradually cut its dependence on agriculture and transfer resources from this sector to other areas.
Economics Association of Malawi (Ecama) spokesman Perks Ligoya said government must intensify agro-processing, a move he said could increase manufacturing’s contribution to the economy.
Ligoya was reacting to government’s latest figures which show that Gross Domestic Product (GDP) grew by 4.4 percent in 2003.
This growth estimate comes after three years of “hard and unstable” macroeconomic conditions resulting from poor inflow of resources, drought, hunger and over expenditure by government.
Economic Planning and Development Minister Bingu Mutharika said told journalists recently that agriculture is the main sectoral source of this growth followed by manufacturing.
Ligoya said it will be difficult for the Malawi economy to stabilise because whenever agriculture is affected, almost all the major macroeconomic indicators are smeared.
“For an economy that is growing and industrialising, the proportion of agriculture to the GDP is supposed to be declining over time so that resources are moved to other sectors,” said Ligoya.
Agriculture now contributes about 32 percent to the GDP, having fallen from about 40 percent in the early 1990s.
But as agriculture fell, manufacturing’s contribution to the economy also took a nose dive, dropping from 17 percent in the early 1990s to 11.6 percent in 2001.
According to Mutharika, agriculture is estimated to have grown by 6.8 percent last year compared with 2.4 percent in 2002.
Manufacturing only registered a 1.2 percent growth in output last year as compared to a -0.1 percent in 2002.
Principle Secretary in the Ministry of Economic Planning and Development Milton Kutengule said the Growth Strategy, still in its draft form, will ensure that value is added to agricultural products.
But he said the growth estimates cannot be taken as real growth because they could be revised any time.
Another economist Alimon Mwase said apart from agriculture and distribution, it is unlikely that other sectors could have registered growth last year.
“The rest may have contracted or remained stagnant,” said Mwase who is also managing director Millennium Consulting Group and a former Ecama president. |
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