Economy of Malawi

Economy of Malawi


Malawi is a landlocked country sharing borders with Tanzania, Zambia, and Mozambique. The country has an estimated population of 18 million (2016). Children under 18 constitute over 50% of the population, and life expectancy is 63.9 years in 2017. The total fertility rate is 4.4 children per woman. Self-reported literacy (reading and writing in any language) is 81% for males and 66% for females (15+ years of age). The Malawi Kwacha has remained stable since August 2016 (at MWK730 to USD1). The economy depends on substantial inflows of economic assistance from the IMF, the World Bank, and individual donor nations.


Poverty remains stubbornly high. Malawi is one of the world’s poorest and least developed countries. In 2016 Malawi was listed as the poorest nation on earth when measuring its population against its GDP (Gross Domestic Product). GDP in Malawi was worth 6.30 billion US dollars in 2017. More than half of the population lives below the poverty line and nearly a quarter are categorised as ultra-poor according to the National Statistic Office/World Bank.

Malawi’s economy largely depends on agriculture, which accounts for 80% of the population, about one-third of GDP and 80% of export revenues. The most important crop in economic terms is tobacco, which accounts for about 55% of exports, depending on annual output and world prices, which have been in decline for some years. Sugar, tea, and coffee are also important.


Economic development has been impeded by its landlocked and narrow economic base, limited foreign and domestic investment, policy inconsistency, the legacy of authoritarian leadership, rampant corruption, high population growth, low human capacity levels, poor infrastructure and limited opportunities in non-farm activities. Vulnerability to external shocks such as weather and health is a major challenge. Shortage of energy still stands out with about 11% of the population having access to electricity in 2016.

Corruption levels seem to be worsening with Transparency International ranking Malawi at 120/175 economies in 2017 compared to 112 in 2016. Corruption in the various customs, tax, and procurement agencies impedes business. The official government estimate is that 30 percent of the annual budget is lost to corruption, but the true percentage may be much higher. A public financial management scandal in 2013 triggered sharp reductions in the level of on-budget development assistance received from various donors from 2013 to 2016.