Malawi

Approximate reading time: 3 minutes

The Southern African nation of Malawi is landlocked sharing borders with Mozambique, Zambia and Tanzania. The country has an estimated population of 18 million (2016). Malawi has been able to make important economic and structural reforms and sustain its economic growth rates over the last decade. Nevertheless, poverty remains widespread, and the economy undiversified and vulnerable to external shocks. The country’s development is guided by a series of five-year growth and development strategies, the third and current one covering 2017-2022, focusing on education, energy, agriculture, health and tourism.

Political Context

Malawi is a peaceful country that has had stable governments since independence in 1964. One-party rule ended in 1993 and since then the country has held five multi-party presidential and parliamentary elections. The sixth elections on May 21, 2019 will be tripartite. The 2019 elections calendar was launched in February 2018 under the theme Consolidating Malawi’s Democracy through the Ballot, emphasizing free, fair, credible, transparent, and cost-effective elections. Current President Peter Mutharika was first elected in 2014.

Economic Overview

In 2017, real gross domestic product (GDP) growth picked up to 4% from 2.5% in 2016. The growth outlook for 2018 is likely to be adversely impacted by an anticipated negative impact of erratic rains and fall armyworm infestation on agriculture production. Despite external shocks, the government managed to contain fiscal slippages with the deficit narrowing to 4.8% of GDP. After six years of double digit inflation, the headline rate has receded to single digit levels (7.8% in February 2018), driven by a sustained fall in food inflation due to affordable maize on domestic markets. The Kwacha has remained stable since August 2016 (at MWK730 to US$1). This stability and the decline in average oil prices also exerted downward pressure on non-food inflation.

Social Context

Encouraging progress has been made in human development in recent years. Life expectancy is up to 63.9 years in 2017 from 62.8 in 2016.  The total fertility rate is down to 4.4 children per woman from 6.7 between1992-2015/16. Self-reported literacy (reading and writing in any language) is 81% percent for males and 66% for females (15+ years of age). However, poverty and inequality remain stubbornly high. One in two people in rural areas are poor (note that the official poverty estimation for 2016/17 is being prepared using the Fourth Integrated Household Survey). Poverty is driven by poor performance of the agriculture sector, volatile economic growth, population growth, and limited opportunities in non-farm activities.

Development Challenges

Malawi’s challenges are multi-pronged. Vulnerability to external shocks (e.g. weather, health) is a major challenge. The weather will remain a key part of the economic cycle, with the negative impact of bad weather compounded by factors such as population growth and environmental degradation.  Shortage of energy still stands out with about 10% of the population having access to electricity. Infrastructure development, the manufacturing base, and adoption of technology are low. Corruption levels seem to be worsening with Transparency International ranking Malawi at 120/175 economies in 2017 compared to 112 in 2016.

(World Bank, April 2018)

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