... podríais haber adivinado hace diez años que era México, Argentina, Chile o incluso Venezuela con sus petrodólares. Y la respuesta hubiera sido correcta: todas tenían en el año 2000 una renta per cápita (en términos PPP) de entre 8.000 y 9.000 dólares por persona.
Pero hoy en día, según los datos del Banco Mundial, es Guinea Ecuatorial, que con una renta per cápita de casi 20.000 dólares esta en teoría entre los 30 países más ricos del mundo. Y a pesar de todo casi un 15% de los niños mueren antes de llegar a los cinco años, un dato que es peor solo en 13 países del mundo. Una vergüenza que la comunidad internacional, y España en particular, siga agasajando a un personaje tan despreciable como Obiang Nguema.
Showing posts with label Africa. Show all posts
Showing posts with label Africa. Show all posts
Tuesday, 19 October 2010
Monday, 18 October 2010
Mortalidad infantil en África
Se me pasó ya la época de plantearme hacer un doctorado. Pero hubo un periodo, sobre todo entre el 2003 y el 2006, durante el cual me parecía una opción bastante atractiva. Después fui y me gasté los pocos ahorrillos que teníamos hace dos años en hacer un máster en energía y finanzas - lo de hacer un segundo máster fue una decisión que parecía tener su lógica en ese momento: si quería dar el salto al sector privado habría que pasar por una escuela de negocios, ¿no? El caso es después de un año y medio de dudar la sabiduría de esa inversión, parece que al final sí que va a salir rentable.
Pero bueno, volviendo al tema del doctorado, el caso es que sí que se me ocurrieron algunos temas en los que me hubiera encantado profundizar a base de microeconometría. Uno de ellos es el misterioso descenso en la mortalidad infantil en Malawi, ilustrado en el gráfico de google que presento abajo. Entre 1992 y 2004 el ritmo del descenso fue mayor que en ningún otro país al sur del Sáhara (de 240 por cada 1.000 nacimientos vivos a 133 - los datos no se corresponden con los del gráfico, son de aquí). El caso es que es un misterio porque la opinión generalizada de la élite en Malawi es que la primera década de la democracia (1994-2004) fue una década perdida. Y es una opinión que se filtró a publicaciones oficiales, incluida la valoración del Banco Mundial de la reducción de la pobreza en el país de 2006.
La hipótesis que hubiera explorado, y sobre la que aún no hay una evaluación cuantitativa, hubiera sido que la reducción de la mortalidad infantil ha sido el resultado de:
(1) una caída de la pobreza causada por la liberalización del sector del tabaco (que antes de 1992 solo podían cultivar unos cuantos privilegiados a quienes el gobierno otorgaba una licencia);
y (2) la introducción de educación primaria gratuita en 1994, que supuso un incremento dramático en la alfabetización sobre todo de las niñas.
¿Por qué seguimos sin evidencia de los efectos positivos de estas reformas tan sencillas en un indicador tan fundamental como la mortalidad infantil? Para mi es un reflejo de todo lo que está mal con el sector del desarrollo internacional:
(1) Porque el mensaje de que la liberalización de los mercados agrícolas en África podía tener un impacto inequívocamente beneficioso no cuadraba ya con la versión post-Washington consensus.
(2) Porque el gobierno que llevó a cabo gran parte de las reformas acabó bastante corrupto en su segundo mandato (1999-2004) y por lo tanto a las agencias internacionales no les interesaba reconocer los éxitos que hubieran podido tener con anterioridad.
(3) Porque al nuevo presidente (elegido en 2004) también le interesaba que se vieran los mandatos de su antecesor como un rotundo fracaso.
(4) Porque a las élites nacionales no les beneficiaron los cambios - tenían que competir con más granjeros produciendo tabaco y la calidad de la educación primaria cayó bastante - y por lo tanto su percepción de ese periodo de su historia era y es muy negativo.
Y (5) porque así el Programa de Desarrollo de las Naciones Unidas y otros personajillos inconsecuentes se podían anotar, de forma totalmente inverosímil, el éxito de la reducción de la mortalidad infantil.
Así que ahí lo tenéis. El doctorado de Random Spaniard que nunca fue y nunca será. Eso sí, el tema sigue ahí abandonado, esperando que un joven investigador dispuesto a ir contra corriente se anime algún día.
Pero bueno, volviendo al tema del doctorado, el caso es que sí que se me ocurrieron algunos temas en los que me hubiera encantado profundizar a base de microeconometría. Uno de ellos es el misterioso descenso en la mortalidad infantil en Malawi, ilustrado en el gráfico de google que presento abajo. Entre 1992 y 2004 el ritmo del descenso fue mayor que en ningún otro país al sur del Sáhara (de 240 por cada 1.000 nacimientos vivos a 133 - los datos no se corresponden con los del gráfico, son de aquí). El caso es que es un misterio porque la opinión generalizada de la élite en Malawi es que la primera década de la democracia (1994-2004) fue una década perdida. Y es una opinión que se filtró a publicaciones oficiales, incluida la valoración del Banco Mundial de la reducción de la pobreza en el país de 2006.
La hipótesis que hubiera explorado, y sobre la que aún no hay una evaluación cuantitativa, hubiera sido que la reducción de la mortalidad infantil ha sido el resultado de:
(1) una caída de la pobreza causada por la liberalización del sector del tabaco (que antes de 1992 solo podían cultivar unos cuantos privilegiados a quienes el gobierno otorgaba una licencia);
y (2) la introducción de educación primaria gratuita en 1994, que supuso un incremento dramático en la alfabetización sobre todo de las niñas.
¿Por qué seguimos sin evidencia de los efectos positivos de estas reformas tan sencillas en un indicador tan fundamental como la mortalidad infantil? Para mi es un reflejo de todo lo que está mal con el sector del desarrollo internacional:
(1) Porque el mensaje de que la liberalización de los mercados agrícolas en África podía tener un impacto inequívocamente beneficioso no cuadraba ya con la versión post-Washington consensus.
(2) Porque el gobierno que llevó a cabo gran parte de las reformas acabó bastante corrupto en su segundo mandato (1999-2004) y por lo tanto a las agencias internacionales no les interesaba reconocer los éxitos que hubieran podido tener con anterioridad.
(3) Porque al nuevo presidente (elegido en 2004) también le interesaba que se vieran los mandatos de su antecesor como un rotundo fracaso.
(4) Porque a las élites nacionales no les beneficiaron los cambios - tenían que competir con más granjeros produciendo tabaco y la calidad de la educación primaria cayó bastante - y por lo tanto su percepción de ese periodo de su historia era y es muy negativo.
Y (5) porque así el Programa de Desarrollo de las Naciones Unidas y otros personajillos inconsecuentes se podían anotar, de forma totalmente inverosímil, el éxito de la reducción de la mortalidad infantil.
Así que ahí lo tenéis. El doctorado de Random Spaniard que nunca fue y nunca será. Eso sí, el tema sigue ahí abandonado, esperando que un joven investigador dispuesto a ir contra corriente se anime algún día.
Friday, 28 May 2010
Maravillas del mercado: peaje en África
El último post de Esplugas sobre los problemas asociados con el regalar ropa usada para pobres africanos me ha hecho recordar Malawi. Y mientras las buenas intenciones crean estos problemas, también había muchos ejemplos del mercado aportando soluciones inesperadas.
Por ejemplo los puentes sobre el río principal en Lilongwe (la capital), conectando dos partes distintas del mercado durante la estación lluviosa. Por el módico precio de 1o kwacha (algo así como 5 céntimos), podías usar estos puentes. La oportunidad de negocio era claramente muy buena, por lo que llegó un momento en el que había varios compitiendo en un espacio de menos de 100 metros.
Por ejemplo los puentes sobre el río principal en Lilongwe (la capital), conectando dos partes distintas del mercado durante la estación lluviosa. Por el módico precio de 1o kwacha (algo así como 5 céntimos), podías usar estos puentes. La oportunidad de negocio era claramente muy buena, por lo que llegó un momento en el que había varios compitiendo en un espacio de menos de 100 metros.
Wednesday, 9 December 2009
Orgía intelectual para un economista liberal-libertario
Esa es la mejor forma de describir lo que he escuchado esta noche. ¿Recetas económicas para el desarrollo de África? (1) Control del gasto público; (2) Liberalización del mercado de divisas; (3) Liberalización del comercio; (4) Privatización.
¿Quién lo decía? No, no era el Banco Mundial, ni el Fondo Monetario Internacional, ni ningún otro agente del imperio capitalista de occidente. Era el gobernador del Banco Central de Uganda, que ha ocupado cargos cruciales a lo largo de los últimos 20 años de expansión económica en su país. Uganda ha crecido a un promedio de un 7% anual desde 1990 y la proporción de la población viviendo por debajo del umbral de la pobreza cayó de un 56% en 1992 a un 31% en 2006. Sabrá de lo que habla el hombre.
Otras perlas que soltó en respuesta a preguntas de tono anti-liberal (parafraseando lo que recuerdo):
P: You have said that privatisation was crucial to Uganda's success, but what about the evidence that privatisation has often hurt the poor, particularly in the case of utilities providing public goods?
R: In Uganda's case I would say all our privatisations have been a success. I can only remember one negative story related to a privatisation. The Commercial Bank of Uganda (state-owned) had become insolvent so the Central Bank had to take it over. The Central Bank nurtured it back to health and decided to sell it to top bidder, which happened to be Standard Bank (which trades in Uganda as Stanbic). There was a huge uproar, particularly amongst politicians, who said a private operation would close the wide network of rural branches - they said they would not renew me for a second term. When my term came up for renewal not a single politician could stand up and say that Stanbic had closed the bank branch in their constituency.
[El gobernador presentó esto como la única experiencia negativa con una privatización en Uganda. Por lo visto se debía referir a una experiencia negativa desde su perspectiva emocional, porque obviamente se trata de 'yet another success']
P: Is the large influx of foreign banks investing in Uganda suffocating local banks?
R: I don't think our local banks are likely to suffocate because of competition from foreign banks. But if they did I would not care. I want banks that deliver banking services competitively to people.
Mola, ¿no? Y otra perla para acabar: "technical constraints and political constraints make it difficult for government to tackle market failures".
Friday, 7 August 2009
Agricultural subsidies in poor countries ...
… are making a comeback.
After years of timid liberalisation efforts in the agricultural sector the momentum appears to have been lost. Part of this has to do with the hypocrisy of our own rich countries, which has been all too evident throughout the
The spike in food prices during the first half of 2008 has also led to a renewed focus on agricultural development and public investment in poor countries, including new multi-billion-dollar commitments from the G8 leaders at their latest meeting last month. Despite the well-meaning intentions of the donors and the bureaucrats that will eventually manage these funds, the reality is that a large proportion of these funds will likely be channelled towards unproductive subsidies.
I do not think agricultural subsidies in poor countries are necessarily a bad thing – there are informational asymmetries and credit market failures that provide an economic rationale for them sometimes. I even had a fleeting moment of fame two years ago being quoted in defence of the economics of the Malawi fertilizer subsidy in a front page New York Times article. I also believe subsidies can be designed in ways that support market development, which is what we tried to support the Government of Malawi with.
But in practice these nuances become too complicated for the politicians in charge, for whom the heart of the matter always appears to be to increase (or maintain) the size of the subsidies, rather than increase their efficiency and impact. Delivering the subsidies through Government structures rather than market ones also seems too difficult to resist for politicians. Thus we get the massive write-offs of agricultural debts in
I got thinking about these issues again as I was reading “The Wealth and Poverty of Nations” by David Landes. Explaining why the Industrial Revolution and the era of capitalism took off in
As much as I like Landes’ book (a highly recommended read), I am a little disappointed at the way this issue is addressed. Dan Morgan’s “Merchants of Grain” (an obscure source, I know) discusses
Both the G8 leaders discussing poor countries today and David Landes discussing 19th century Britain focus exclusively on domestic agricultural production missing a factor at least of equal importance in achieving food security: liberalisation of agricultural trade, including getting rid of protectionist subsidies to rich-country farmers.
[Apologies for posting without including a single chart - that is a habit I don't want to get into]
Thursday, 29 January 2009
Happy economic 2009, Malawi
Happy New Year, I say as I frantically try to get this out before January is over (still writing from Honduras, where I am working until Saturday)! It certainly seems set to be a happier New Year in Malawi than in most other places in the World – at least as far as economic growth is concerned. Hopefully 2009 will also see Malawi follow in the steps of Ghana’s exemplary elections.
Three weeks ago The Economist ranked Malawi’s expected economic growth for 2009 as the second fastest in the World.
The IMF approved and disbursed in December a $77m External Shock Facility – a very welcome vote of confidence on Malawi’s progress and at the same time a much needed forex injection. The report is now available and at 6.7% has a more moderate growth forecast for 2009 than The Economist.
1. Commodity prices
Malawi’s best economist, Dr. Khwima Nthara, worried about the impact of the financial crisis on Malawi on the World Bank's Africa Can (End Poverty) blog - wondering whether we might expect some bad news as a result of second round impacts through lower commodity prices. I feel the picture on commodities for 2009 in Malawi is far from clear, with a lot of potential upside.
(1.1) Tobacco. As I commented in my latest economic update sales at the auction floors for the 2008 season hit a historical record of $465 million. This was an increase of $280 million on 2007 and reflected both record historical prices (at an average of $2.43 per kg) and record volumes (at 190 million kg).
The very positive results of the 2008 season should provide greater incentives to grow tobacco this season. Therefore, greater hectarage can be expected, although yields might decline as a result of lower fertilizer application due to the increase in fertilizer prices (more on this below). On balance I suspect the buyers and the Tobacco Control Commission will be expecting a (substantially?) larger crop.
The question is then whether last season’s prices will be maintained. It is worth pointing out that despite the general collapse in commodity prices since their peak in July 2008, there are some agricultural commodities such as sugar and cocoa that have bucked the general decline (with cocoa prices rising over 50% in the last six months). So price declines in the coming auction season are not necessarily a given.
(1.2) Uranium. Paladin state that they are still on track to ramp up uranium production from Kayelekera from March. Prices of uranium have fallen dramatically from their peak 18 months ago of $120 per lb. Nevertheless, at current prices of $48 per lb, Malawi can still expect uranium exports of over to $150 million per annum, representing a step-increase in GDP of over 3%. Exports in 2009 are likely to be around $75 million, as the mine takes about six months to reach its target production of 3.3 million pounds of uranium per annum.
(1.3) Sugar. In November Illovo, the country’s only producer of processed sugar, announced the results for its operations in the six months to end September. The Malawi operation has always been the star performer of this regional group, contributing 17% of its total revenue and 41% of operating profit in the last full year.
Malawi’s performance in the first half of the current year was even more impressive: operating profit in the first six months was equivalent to approximately $53 million, compared to $61 million for the last full year. In other words, Illovo is on track for an increase in full year earnings this year of over 50%.
Although the financial statement does not provide the details, it is likely that this increase is largely driven by increased domestic consumption, a signal of increased disposable income among Malawi’s population.
(1.4) Fertilizer. We all know how dependent Malawi is on imported fertilizer, with or without a humongous Government fertilizer subsidy. The IMF’s latest estimates of the Terms of Trade impact of the 2008 fertilizer price increases was that Malawi required an additional $123 million for the year. In my view this is an underestimate: imports for the 2008 subsidy amount to 200,000 tons at an average price that is $670 per ton higher than the 2007 price. So the impact on the subsidy programme alone is already greater than the IMF estimate. If we add commercial imports my sense is that in 2008 Malawi required an additional $200 million (5% of GDP) to pay for its fertilizer imports.
The great news is that the gains in fertilizer prices of 2008 have been totally reversed, and are now back at their early 2007 levels, and shipping prices (the Baltic Exchange Dry Index) has fallen to the lowest level in over a decade. These two factors should result in a positive Terms of Trade shock of well in excess of $200 million in 2009 (again much higher than the IMF’s latest estimate of $102 million).
(1.5) Oil. On oil I have neither the inclination nor time to challenge the IMF estimates, so I just report here what they state. In 2008 Malawi required an additional $62 million to finance its fuel imports. As we know oil prices have fallen by two thirds since their peak in July 2008, and the IMF now estimate that this will represent a saving of $77 million in 2009 to Malawi’s economy.
2. Maize prices
Something bizarre continues to go on with Malawi’s maize prices. The attached shows prices to the first week of December – more recent figures have confirmed further increases. So prices have remained above $350 per ton since July and have recently broken above the $400 per ton barrier. This did not even happen in the 2005-06 food crisis. And whereas in July those price levels might have been consistent with world maize prices (as shown in the chart below), those world reference prices (Chicago and Jo’burg) have now fallen back to about $160 per ton.
As I said above my view is that the huge improvement in Illovo’s business is a sure sign of greater prosperity amongst the bulk of Malawi’s population. And yet these price levels have worrying implications for some sectors of the population, particularly those right at the bottom of the income distribution.
Views on what is going on are more than welcome – I want to hear from people who might know something the rest of us don’t.
3. The latest macroeconomic indicators
The latest macroeconomic indicators from the Reserve Bank of Malawi are now available, with data to the end of December 2008 (I was actually just waiting for it before finalising this update). The figures are, as always, revealing.
(3.1) Forex reserves. The chart below shows the forex situation towards the end of last year became more precarious than it had been at any time since early 2005. Official foreign reserves fell to just $70 million in October, presumably as a result of the large forex requirement for fertilizer imports. This continued precarious situation, in which Malawi appears incapable of stabilising its reserves at a level above two months of imports, provided the justification for the IMF’s ESF approval. The $77 million ESF disbursement plus presumably other substantial donor inflows in December resulted in reserves rising back to safer levels of nearly $300 million.
Nevertheless, the continued precariousness of the foreign reserves surely should make the authorities question the wisdom of their strong peg to the US$. In the past four months, apart from the Japanese yen, all serious World currencies have depreciated against the greenback. In this context it does not make any sense for Malawi to remain pegged at an artificially overvalued rate of K140 per US$ - even more so when some commentators are convincingly arguing that this overvaluation is the main immediate constraint to faster economic growth.
(3.2) Inflation and interest rates. Inflation has continued to creep up slowly, hitting 9.9% in December. Commercial interest rates remain at 19.3%, which means that for the first time in the decade real interest rates are possibly below 10%.
(3.3) Credit growth. In the context of the rapid deterioration of the credit market globally credit to the private sector in Malawi grew 50% in the last four months of 2008, closing the year at $464 million. Credit to Government also experienced a large step increase. If I have to guess what is going on here I would say that this increase is the result of the huge financing costs of fertilizer imports after World prices more than doubled in the months to July 2008. So for the time being the effects of the global credit crunch have not been felt in Malawi.
In conclusion…
Economic prospects are positive for Malawi despite the global financial and economic turmoil. It seems that the 2009 elections and improving the exchange rate management regime are, at the moment, much more important for Malawi’s continued progress than the potential impact of the global crisis.
Three weeks ago The Economist ranked Malawi’s expected economic growth for 2009 as the second fastest in the World.
The IMF approved and disbursed in December a $77m External Shock Facility – a very welcome vote of confidence on Malawi’s progress and at the same time a much needed forex injection. The report is now available and at 6.7% has a more moderate growth forecast for 2009 than The Economist.
1. Commodity prices
Malawi’s best economist, Dr. Khwima Nthara, worried about the impact of the financial crisis on Malawi on the World Bank's Africa Can (End Poverty) blog - wondering whether we might expect some bad news as a result of second round impacts through lower commodity prices. I feel the picture on commodities for 2009 in Malawi is far from clear, with a lot of potential upside.
(1.1) Tobacco. As I commented in my latest economic update sales at the auction floors for the 2008 season hit a historical record of $465 million. This was an increase of $280 million on 2007 and reflected both record historical prices (at an average of $2.43 per kg) and record volumes (at 190 million kg).
The very positive results of the 2008 season should provide greater incentives to grow tobacco this season. Therefore, greater hectarage can be expected, although yields might decline as a result of lower fertilizer application due to the increase in fertilizer prices (more on this below). On balance I suspect the buyers and the Tobacco Control Commission will be expecting a (substantially?) larger crop.
The question is then whether last season’s prices will be maintained. It is worth pointing out that despite the general collapse in commodity prices since their peak in July 2008, there are some agricultural commodities such as sugar and cocoa that have bucked the general decline (with cocoa prices rising over 50% in the last six months). So price declines in the coming auction season are not necessarily a given.
(1.2) Uranium. Paladin state that they are still on track to ramp up uranium production from Kayelekera from March. Prices of uranium have fallen dramatically from their peak 18 months ago of $120 per lb. Nevertheless, at current prices of $48 per lb, Malawi can still expect uranium exports of over to $150 million per annum, representing a step-increase in GDP of over 3%. Exports in 2009 are likely to be around $75 million, as the mine takes about six months to reach its target production of 3.3 million pounds of uranium per annum.
(1.3) Sugar. In November Illovo, the country’s only producer of processed sugar, announced the results for its operations in the six months to end September. The Malawi operation has always been the star performer of this regional group, contributing 17% of its total revenue and 41% of operating profit in the last full year.
Malawi’s performance in the first half of the current year was even more impressive: operating profit in the first six months was equivalent to approximately $53 million, compared to $61 million for the last full year. In other words, Illovo is on track for an increase in full year earnings this year of over 50%.
Although the financial statement does not provide the details, it is likely that this increase is largely driven by increased domestic consumption, a signal of increased disposable income among Malawi’s population.
(1.4) Fertilizer. We all know how dependent Malawi is on imported fertilizer, with or without a humongous Government fertilizer subsidy. The IMF’s latest estimates of the Terms of Trade impact of the 2008 fertilizer price increases was that Malawi required an additional $123 million for the year. In my view this is an underestimate: imports for the 2008 subsidy amount to 200,000 tons at an average price that is $670 per ton higher than the 2007 price. So the impact on the subsidy programme alone is already greater than the IMF estimate. If we add commercial imports my sense is that in 2008 Malawi required an additional $200 million (5% of GDP) to pay for its fertilizer imports.
The great news is that the gains in fertilizer prices of 2008 have been totally reversed, and are now back at their early 2007 levels, and shipping prices (the Baltic Exchange Dry Index) has fallen to the lowest level in over a decade. These two factors should result in a positive Terms of Trade shock of well in excess of $200 million in 2009 (again much higher than the IMF’s latest estimate of $102 million).
(1.5) Oil. On oil I have neither the inclination nor time to challenge the IMF estimates, so I just report here what they state. In 2008 Malawi required an additional $62 million to finance its fuel imports. As we know oil prices have fallen by two thirds since their peak in July 2008, and the IMF now estimate that this will represent a saving of $77 million in 2009 to Malawi’s economy.
2. Maize prices
Something bizarre continues to go on with Malawi’s maize prices. The attached shows prices to the first week of December – more recent figures have confirmed further increases. So prices have remained above $350 per ton since July and have recently broken above the $400 per ton barrier. This did not even happen in the 2005-06 food crisis. And whereas in July those price levels might have been consistent with world maize prices (as shown in the chart below), those world reference prices (Chicago and Jo’burg) have now fallen back to about $160 per ton.
As I said above my view is that the huge improvement in Illovo’s business is a sure sign of greater prosperity amongst the bulk of Malawi’s population. And yet these price levels have worrying implications for some sectors of the population, particularly those right at the bottom of the income distribution.
Views on what is going on are more than welcome – I want to hear from people who might know something the rest of us don’t.
3. The latest macroeconomic indicators
The latest macroeconomic indicators from the Reserve Bank of Malawi are now available, with data to the end of December 2008 (I was actually just waiting for it before finalising this update). The figures are, as always, revealing.
(3.1) Forex reserves. The chart below shows the forex situation towards the end of last year became more precarious than it had been at any time since early 2005. Official foreign reserves fell to just $70 million in October, presumably as a result of the large forex requirement for fertilizer imports. This continued precarious situation, in which Malawi appears incapable of stabilising its reserves at a level above two months of imports, provided the justification for the IMF’s ESF approval. The $77 million ESF disbursement plus presumably other substantial donor inflows in December resulted in reserves rising back to safer levels of nearly $300 million.
Nevertheless, the continued precariousness of the foreign reserves surely should make the authorities question the wisdom of their strong peg to the US$. In the past four months, apart from the Japanese yen, all serious World currencies have depreciated against the greenback. In this context it does not make any sense for Malawi to remain pegged at an artificially overvalued rate of K140 per US$ - even more so when some commentators are convincingly arguing that this overvaluation is the main immediate constraint to faster economic growth.
(3.2) Inflation and interest rates. Inflation has continued to creep up slowly, hitting 9.9% in December. Commercial interest rates remain at 19.3%, which means that for the first time in the decade real interest rates are possibly below 10%.
(3.3) Credit growth. In the context of the rapid deterioration of the credit market globally credit to the private sector in Malawi grew 50% in the last four months of 2008, closing the year at $464 million. Credit to Government also experienced a large step increase. If I have to guess what is going on here I would say that this increase is the result of the huge financing costs of fertilizer imports after World prices more than doubled in the months to July 2008. So for the time being the effects of the global credit crunch have not been felt in Malawi.
In conclusion…
Economic prospects are positive for Malawi despite the global financial and economic turmoil. It seems that the 2009 elections and improving the exchange rate management regime are, at the moment, much more important for Malawi’s continued progress than the potential impact of the global crisis.
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