Malawians went to the polls yesterday to elect local government officials, parliamentarians and the next head of state.
(READ MORE: Malawians vote, incumbent Banda favourite to win)
There are four main contenders in this year’s flooded polls, with incumbent Joyce Banda, Lazarus Chakwera, Atupele Muluzi and Peter Mutharika vying for the top job.
“This election is hugely important as the outcome will determine the future of economic and political reform in that country,” Gary Van Staden, political analyst at NKC Independent Economists told CNBC Africa.
“I am positive that if Banda does not win elections and lose control of the national assembly, there is a high chance of the country sliding back from a recovery path,” he added.
Mutharika attempted to subvert the constitutional order when the former statesman, his elder brother Bingu wa Mutharika passed on April 2012.
Chris Becker, chief Africa strategist at ETM Analytics noted that Malawi is a very small country with no deep capital markets which has been affecting the country’s foreign inflows.
“Capital inflows from Western Europe and emerging nations are not being absorbed into Malawi as [the country] doesn’t feature in portfolio investments.”
“Malawi doesn’t have well developed financial and capital markets because historically it has low saving rates estimated to be at two per cent in that country’s gross domestic product,” Becker added.
“Policies are not being put in place to raise the level of savings in the country affecting investor perceptions.”
Banda grew popular when she took over after Mutharika’s death but her support has been waning as a result of the ‘cashgate scandal’ implicating senior members in her administration.
“President Banda is not universally acceptable in Malawi as she is tainted by the cashgate scandal but her two main opponents (Peter Mutharika and Atupele Muluzi) are considered worse,” Staden noted.
“Based on the history of the two opponents there are chances that Malawi could slide back into hard economic climate and political repression.”
Malawi is sustained by donor aid contributing about 40 per cent to the Southern African country’s national budget.