Mining & Trade News

The Indigenous Business Persons Association of Malawi (IBAM) says it is optimistic that business prospects will pick up in the wake of the slow-down in number of people testing positive for coronavirus (Covid-19) pandemic in the country.

The Covid-19 pandemic depressed Malawi’s economy as businesses slowed, productivity was reduced, and companies downsized and closed operations while tax revenue decreased.

Malawi’s economy is dominated by the informal sector characterized by small and medium businesses which account for 89 per cent of the country’s labour force.

IBAM president, Mike Mlombwa, says when the pandemic broke out in the country, small and medium enterprises (SMEs) panicked and were forced to borrow money and obtain goods and services on loan to sustain their operations.

Following the declaration of a State of Disaster on March 20, government announced Covid -19 preventive measures which included suspension and reduction of some social and economic activities as well as regulating access to public places, buildings and structures including business premises.

“We now have seen that Covid-19 cases are dropping and we have higher expectations to see our members bailed out from financial hiccups,” Mlombwa says in anticipation that government will put in place measures to cushion and spur small indigenous businesses from the effects of the pandemic.

At the peak of the pandemic, the Monetary Policy Committee of the Reserve Bank of Malawi (RBM) released a K12 billion stimulus package through the commercial banks to support private sector businesses hard hit by the pandemic.

Commercial banks and Micro-Finance Institutions were also directed to observe a three-month moratorium on interest and principal repayments on all loans contracted by micro, small and medium enterprises.

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