Overview

  • Country Overview

    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 between 1992-2015/16. 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.

    Last Updated: Apr 19, 2018

  • World Bank Engagement in Malawi

    The new World Bank Group Country Partnership Framework (CPF) for Malawi is due in FY19.  Stakeholder consultations to develop the CPF will be held in June 2018 across the country. The CPF is expected to focus on growth and resilience, human development, and institutions for implementation. It will support the Third Malawi Growth and Development Strategy (2017-2021) which has five priority areas: (1) Agriculture and climate change; (2) Education and skills development; (3) Energy, industry, and tourism development; (4) Transport and ICT infrastructure; (5) Health and population.

    The current Bank strategy is organized around three main pillars: (1) promoting sustainable, diversified and inclusive growth; (2) enhancing human capital and reducing vulnerabilities, and (3) mainstreaming governance for enhanced development effectiveness.

    The current portfolio comprises 16 projects with a total commitment of about $1.4 billion. The key sectors addressed in the whole portfolio include: agriculture, education, energy, mining, water, finance, private sector development, social protection, natural resources management, nutrition and HIV/AIDS.

    International Finance Corporation (IFC)

    The IFC in Malawi is focusing on agribusiness, banking, improving the business climate, and advisory opportunities for public-private partnerships (PPPs) in infrastructure. In the agribusiness sector, IFC is supporting value addition enterprises, diversification of the export base, and strengthening the warehouse receipts system. In the banking sector, it is providing advisory services to increase access to finance for small-medium enterprises (SMEs), and the implementation of collateral registry and credit reference systems. Under the infrastructure and natural resources program, IFC is primarily oriented towards providing PPP advisory services in water, transport, and energy, and to support private sector involvement in the prioritized hydro-electric power projects identified in Malawi’s Integrated Resource Plan. Currently, IFC is working on the development of a hydro power project, PPPs in the water and agriculture sector and development of various cost-effective energy efficiency and captive power solutions in the large estates. Further, IFC is supporting an investment climate program aimed at implementing regulatory reforms. IFC’s portfolio in Malawi consists of five projects with a total committed balance of $26.4 million (as of July 2017).  

    Last Updated: Apr 19, 2018

  • The World Bank Group (WBG) continues to contribute to Malawi’s development performance in various sectors. Here are results from some of its active projects:

    • Changing the face of higher education to meet the needs of a growing and diversifying economy
      Under the Skills Development Project, public universities have constructed new science laboratories and lecture theaters to create space for increasing intake in science subjects. The universities are UNIMA (Chancellor College and Polytechnic), LUANAR, and MZUNI which is constructing a tourism school. New courses have also been introduced with the Polytechnic launching ten new technician level engineering diploma programs to transform availability of skilled technicians. Other skills courses are running at TEVETA. In the various universities, more faculty members are being trained at Masters and PhD levels. The universities are also conducting tracer studies to Further, the project has establishment the National Council for Higher Education to regulate higher education.
    • Rolling Back Tuberculosis (TB): 
      The 2013 Malawi TB prevalence survey findings suggest that about half of the cases remain undetected.  The situation is now changing through support of the Southern African Tuberculosis and Health Systems Support Project.  Case finding activities have increased through community awareness campaigns in districts with mining activities, complemented by community sputum collection points. Mines have improved their safety standards and good hygiene practices. A sourcebook on TB for primary schools has been developed and ready for use by teachers.  
    • Improving Malawi’s Mineral Prospects: 
      Traditionally known as an agricultural country with no mineral resources, between 2013 and 2015, Malawi carried out an airborne geophysical mapping to acquire data to promote the mining sector. The data is available from the Geological Survey Department (GSD) in hard copy or digital form. A geodata management centre has also been established at the GSD. The Mining Governance Project also helped produce the first ever Artisanal and Small-Scale Mining Policy in Malawi. Further, artisanal and small-scale miners were trained and formed cooperatives in for mining districts of Ntcheu, Lilongwe, Mzimba and Mzuzu. Under the project, the The Polytechnic introduced three mining related courses, namely: mining engineering, metallurgy and geological engineering at undergraduate level. The courses are already running currently with 56 female and 78 male students.
    • Improving agricultural productivity: 
      The Agricultural Productivity Program for Southern Africa (APPSA) is helping smallholder farmers improve the productivity of maize and rice using low cost technologies. For three years, the farmers have been participating in trials of the technologies, namely a System of Rice Intensification (SRI) and conservation agriculture for maize. The result has been at least a 50% increase in productivity for both staple food crops. This has in turn meant more income from harvest sales and the betterment of household welfare. The results will be shared with Zambia and Mozambique, which are also participating in APPSA and trying out other technologies.

    Last Updated: Apr 19, 2018

  • The European Union, African Development Bank, United Nations agencies, bilateral donors such as DFID, USAID, Germany, Norway, and China, World Bank Group, and IMF are among Malawi’s key partners.

    In 2014, the government and its cooperating partners endorsed a Development Cooperation Strategy (DCS) to guide development cooperation in the country from 2014 to 2018. Discussions are underway to update it. The strategy is in line with principles encapsulated in the Paris Declaration on Aid Effectiveness, the Accra Agenda for Action, and the Busan Global Partnership for Effective Development Cooperation. The DCS advocates inclusive partnerships, government leadership and country ownership of the national development agenda, and alignment around national systems and strategies. It also embraces focusing on results that matter to the poor, and encourages partnerships among development actors based on mutual trust, transparency, and accountability.

    Last Updated: Apr 19, 2018

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LENDING

Malawi: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments


PHOTO GALLERY

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In Depth

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A Rare Need for Urban Growth

Urbanization is often a problem but Malawi’s largely rural economy could do with more of it. It also has a chance to plan.

Apr 19, 2018

Africa's Pulse, No. 17, April 2018

A new analysis of African economies shows the region’s growth is projected to reach 3.1% in 2018, and average 3.6% in 2019–20.

Oct 30, 2017

Monitoring Progress in Policy

IDA, the World Bank’s fund for the poorest, contributes nearly 50% of its funds to 39 African countries.

Oct 30, 2017

International Development Association (IDA) in Africa

IDA, the World Bank’s fund for the poorest, contributes nearly 50% of its funds to 39 African countries.

Oct 30, 2017

World Bank Africa Multimedia

Watch, listen and click through the latest videos, podcasts and slideshows highlighting the World Bank’s work in Sub-Saharan Africa.

Doing Business in Malawi

The Doing Business report provides objective measures of business regulations and their enforcement. See where your country ranks.

Additional Resources

Country Office Contacts

Main Office Contact
Mulanje House, City Centre
Lilongwe 3, Malawi
+265-1-770-611
For general information and inquiries
Zeria N. Banda
Communications Officer
+265-1-770-611
zbanda@worldbank.org
For project-related issues and complaints
malawialert@worldbank.org