Despite being home to only 0.24 percent of the world’s population, Malawi is home to 2.0 percent of the world’s extreme poor, a new World Bank Malawi Country Economic Memorandum has shown.
The memorandum was launched in Lilongwe on Wednesday and presented to President Lazarus Chakwera at Kamuzu Palace on Thursday.
to the memorandum, while Malawi has made strides in improving key human development outcomes such as life expectancy, access to education, and health over the years, poverty reduction aims remain significantly off-track.
The report notes that slow economic growth is at the heart of persistently high poverty rates. According to the World Bank, two periods stand out in terms of growth performance: the post-independence honeymoon of between 1964 and 1979 as well as the post-Hipc boom of between 2006 and 2011.
During these periods, per capita growth exceeded four percent, while it averaged just 0.2 percent during the remaining years.
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The World Bank notes that the growth episodes were marked by temporary macroeconomic stability, fiscal solvency, and a relatively favorable business environment.
Both the post-independence honeymoon and the post-Hipc boom were not without major external shocks.
It says between 2006 and 2008, international fertiliser prices more than doubled, constituting a major terms-of-trade (ToT) shock for Malawi.
During the 1964 – 1979 honeymoon, Malawi also experienced its first post-independence recession in 1968 but the economy quickly rebounded.
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“Key to absorbing external shocks has been relative macroeconomic stability,” the memorandum says.
World Bank Country Director for Malawi Nathan Belete said developing a strong, robust private sector would be key in driving Malawi’s economic growth.
“We believe we are entering a new phase in Malawi’s development trajectory and that new phase, we believe should be one of growth.
“Growth is exactly what will take this country out of the poverty trap and we believe this country has abundant natural and human resources and that if they are tapped correctly with the enabling policies, then we believe the sky’s the limit,” Belete said.
Speaking at the Kamuzu Palace on Thursday, Chakwera said his administration is committed to engaging in extra gear for growth, growth and more growth.
“These areas of agriculture, tourism, mining and so on should really be taken seriously. Everyone in our offices should not sit on any project but rather work for everybody,” Chakwera said.
