New economic analysis calls for solutions to address macroeconomic and gender imbalances to unlock Malawi’s fully inclusive growth potential

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Closing the large gender gap in economic opportunity could lift more people out of poverty and unlock Malawi’s full potential for inclusive growth, according to the World Bank’s latest Malawi Economic Monitor (MEM).

The 14th edition of the MEM, Fight against macroeconomic and gender imbalances, highlights how Malawi’s economic growth for 2022 is expected to reach 3%. However, this growth is vulnerable to shocks due to macroeconomic imbalances. Public debt is high and the budgeted budget deficit of 9.1% of annualized GDP is the highest in recent years, and imbalances in the foreign exchange market can lead to further constraints on the private sector. External risks could further undermine Malawi’s economic recovery, due to high volatility in energy prices, additional waves of COVID-19 infections, including from new variants, and the risk of disruptions in energy prices. transport.

The government must therefore act decisively to meet the growing macroeconomic challenges, in particular on the accumulation of domestic and external debt. This calls for tough decisions in the upcoming FY2022 / 23 budget, including on the Affordable Inputs Program (AIP). Controlling expenditure on wages and goods and services will be essential to improve public financial management systems in order to make the best use of limited resources and strengthen the oversight of public enterprises.

The MEM also stresses the importance of closing the gender gap, which persists in several economic dimensions. Salaried women workers earn 64 cents for every dollar earned by men; and sales of businesses run by women are lower than those of male entrepreneurs. Although the agricultural sector employs around 59% and 44% of women and men, large gender productivity gaps persist. Plots managed by men produce 25% higher yields than plots managed by women. The agricultural productivity gap is due to a range of factors, including the unequal use of agricultural inputs by women, reduced access to agricultural labor, lower access to improved agricultural inputs and technologies, and poor access to agricultural inputs and technologies. Less participation in cash crop / export crop value chains. In Malawi, estimates suggest that closing the gender gap in agricultural productivity could lift more than 238,000 people out of poverty and increase the country’s total GDP by 2.1%.

“As the country pursues an inclusive and resilient economic recovery and seeks to break its pattern of low growth, it must aim to remove existing gender barriers. This implies increased access to business opportunities and key inputs needed to increase women’s productivity in agriculture and other sectors, as well as to stimulate women’s human capital accumulation ”, said Hugh Riddell, World Bank Country Director for Malawi.

According to MEM, investing in improving women’s economic opportunities requires a wide range of approaches to address fundamental issues affecting women’s participation and performance in the labor market. They include improving the market prospects of young adolescents, strengthening the management of financial resources by women and promoting the program to end child marriage. They also include improving access to reproductive health services to reduce fertility, end gender-based violence, provide women with access to more productive labor and inputs to build their capacities. agriculture, and provide socio-emotional and vocational training to improve women’s business and life skills.

Distributed by APO Group on behalf of the World Bank Group.