Malawi

Minimum Expenditure Basket in Malawi - Round 14: 19-23 October 2020: A look at Food Prices and Availability in Times of COVID-19

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Assessment
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Posted
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Highlights

• The SMEB for both the urban and rural areas has risen marginally since the last reporting period (5th-9th October) due to an increase in the prices of maize and pulses following seasonal trends and farmer-led demand for seeds, especially for pulses.

• The average national maize grain price as of the last week of October is MK 195.

• Maize grain prices in the Southern Region remain higher at MK 210 compared to the Central Region (MK 181) and the Northern Region (MK 151).

Background and Context

The number of confirmed COVID-19-positive cases has remained low since September even in light of the reopening of markets and businesses. That said, the enforcement of wearing masks in schools, shops and other public places is still in effect even though an increased number of people are seen without wearing masks. The COVID-19 pandemic has had an adverse effect on the economy at large. Several sectors have been adversely affected, specifically tourism and hospitality, with some organisations scaling down their operations and others having either reduced or cut the salaries and benefits of their staff. Despite this and to limit its impact on the economy, the Reserve Bank of Malawi has recently reduced the benchmark policy rate to 12.0 percent [1] in order to support economic recovery. The Central Bank has done this by supporting small and medium enterprises (SMEs), commercial banks and microfinance institutions via the provision of structured SME loans and provided a moratorium on their debt service until the end of 2020. Fees on mobile money transactions were temporarily waived to encourage cashless transactions.

Methodology

The Minimum Expenditure Basket (MEB) is based on the triangulation of information about the needs, preferences, and demand behaviour of households to establish essential food commodities and non-food products that are found in local markets. Data for the construction of both the rural and urban area MEBs was collected using a WFP in-house call centre, reaching over 100 traders in some 83 rural and urban local markets. Contacted traders were asked to provide the market prices of available food and non-food items during the period of 19th to 23rd of October 2020.
The Survival Minimum Expenditure Basket (SMEB) is the bare minimum amount a household requires to maintain existence and cover lifesaving needs. There are several ways in which to construct an SMEB. This is done in-line with a rights-based approach based on previously-assessed needs. The detailed methodology on the construction and assumption is depicted in Annex B.