Located in southern Africa, Malawi is landlocked and shares a border with Mozambique, Zambia
In the past decade, Malawi has been able to make significant economic and structural reforms and sustain economic growth but remains one of the poorest countries in the world. The economy is heavily dependent on agriculture, and it is vulnerable to external shocks.
The country’s development is guided by the Malawi Growth and Development Strategy (MGDS), a series of five-year plans that contribute to the long-term development goals outlined in Vision 2020. Currently in MGDS III, with the theme “Building a Productive, Competitive and Resilient Nation,” will run through 2022 and focuses on education, energy, agriculture, health
Malawi is generally 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 multi-party presidential and parliamentary elections every five years.
The country’s 6th tripartite elections will be held on May 21, 2019. President Peter Mutharika, who was first elected in 2014, will stand for re-election. Other major parties contesting for
In 2018, growth of Malawi’s real gross domestic product (GDP) is projected to have moderated to 3.5% from 4% in 2017. This is due to lower output in agriculture caused by dry spells and fall armyworm infestation. Performance in industry and service sectors was also subdued because of erratic energy supply and a generally weak business environment.
The FY2017/18 fiscal deficit widened from 4.8% the previous year to 7.8% of GDP. The deterioration was largely a result of lower than expected revenues and grants, securitization of payment arrears dating back to FY2012/13, and expenditure associated with the bailout of a parastatal. Year-on-year headline inflation has receded to single digit reaching an annual average headline rate of 9.2% in 2018. Continued stability of the Kwacha relative to the US Dollar since 2017 has partly helped contain inflation in single digits. The Reserve Bank of Malawi reduced its policy interest rate to 14.5% in early 2019.
Malawi has made progress in building its human capital—the knowledge, skills
Malawi’s development challenges are multi-pronged, including vulnerability to external shocks such as weather and health. Weather remains a key part of the economic cycle, with the negative impact of bad weather compounded by factors such as population growth and environmental degradation. Energy shortages still stand out, with about 11% of the population having access to electricity. Infrastructure development, the manufacturing base, and adoption of new technology are low, and corruption levels remain high with Transparency International ranking Malawi at 122/180 economies in 2018.
Last Updated: Apr 12, 2019