Currency volatility due to forex scarcity and rocketing headline inflation in Malawi have been singled out among key impingements to business by regional financial services group, Old Mutual.
Old Mutual Africa Region Managing Director Clement Chinaka said this during a virtual engagement with local media, where he presented the firm’s annual results for 2024.
His remarks come as Malawi’s headline inflation rose to 30.7 percent in February 2025—and is feared to have hit the hyper level.
Forex scarcity— attributed to glaring mismatches between imports and exports—has also affected market trends as most businesses were quoting the parallel market rate of the United States dollar, seen at around K3,200, against the K1,750 official rate.
Chinaka said amid a resounding performance in its Malawi portfolio, doing business continues to be affected by macroeconomic challenges.
“At an overall level, the Malawi portfolio outperformed most of its benchmarks, but investment returns were negatively impacted by volatile currency movements in the year,” Chinaka said.
Figures provided show that the listed equity portfolio in Malawi returned 50.8 percent, slightly underperforming on the Malawi Stock Exchange by 4.3 percent due to underweight positions in the financial services sector.
The money market portfolio outperformed the benchmark due to an overweight position in fixed rate instruments.
The government bonds in Malawi returned 26.8 percent.
The unlisted asset portfolio in Malawi returned 197.2 percent following once-off special dividend declarations and fair value increases.
He said the economic outlook remained mixed, and that recovery largely depended on authorities’ effort to contain prevailing pressure.
“The outlook really depends on how the authorities manage the rising inflation; it needs a lot of discipline, especially managing the government expenditure, controlling growth of money supply and also limiting currency depreciations,” Chinaka said.
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