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Malawi stuck in poverty— World Bank

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The World Bank office in the country has said despite improvements in some non-income dimensions of poverty, monetary poverty in rural areas remains high and stagnant.

In its poverty assessment report released in Lilongwe yesterday, the bank said overrepresentation of poverty in rural areas has kept poverty levels at national level stagnant, declining only from 52 percent to 51 percent, whereas the share of extreme poor has risen from 22 percent to 25 percent since 2004.

According to the report, the average progress in non-monetary dimensions of welfare has also not always reached the poor in Malawi as, between 2004 and 2010, the richer segments of the population experienced greater gains in educational achievements than the bottom 40 percent.

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Equally large gaps were prevalent in the nutritional status of children living in wealthier households and those from poor households.

The report, titled ‘Pathways to Prosperity in Rural Malawi’, indicates that malnutrition remained high in 2015 as 37 percent of children under the age of five are stunted, reflecting significant nutrition imbalances in their diet.

The report cites volatile economic growth, including high inflation which places a heavy burden on the poor, low agricultural production, limited and fragile opportunities in non-farm activities and imperfect safety nets in the context of high economic insecurity as some of the probable poverty causes.

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An ever-growing young population has also been cited as one of the major problems.

The assessment team that came up with the report has proposed the creation of conditions for macroeconomic stability as sustained and inclusive economic growth remains key to reducing poverty and ensuring shared prosperity in the country.

They have also said the country should address population growth and unprecedented increase of young population, increase agricultural productivity by ensuring that the Farm Inputs Subsidy Programme (Fisp) is focused on increasing productivity while leaving the safety net function to other programmes.

“Fisp is an expensive programme with a poor target. Scale down on Fisp and invest in productive agriculture,” Senior Economist at the World Bank Alejandro De la Fuente said in his presentation.

The report recommends the separation of Fisp from maize to enable households to diversify to other crops that do not heavily depend on Fisp-supported inputs.

“The existing Fisp vouchers should be flexible enough to enable farmers to redeem them for any input combination that they desire,” the report reads in part.

Chancellor College-based economist Winford Masanjala, who was part of the panel discussion at the report launch, said the country needs to deal with inequalities to effectively deal with poverty.

“Economic growth can’t achieve anything if inequality persists. In dealing with poverty, consider inequality and in dealing with inequality, consider education for all,” Masanjala said.

The bank has also called for an increase in incomes from non-farm activities and improving the efficiency of safety net programmes.

Chief Director responsible for Economic Planning and Development in the Ministry of Finance, Economic Planning and Development Peter Simbani said the report should have also considered the gains that the country has made in reducing the fertility rate since 2010.

The report made use of the integrated household surveys of 2004 to 2005, 2010 to 2011 and the integrated household panel survey from 2013.

Additionally, nationally representative surveys such as the 2004, 2010 and 2015 to 2016 Malawi Democratic and Health Surveys are also used or referenced in the report.

The rural livelihoods survey, gathered in the context of the evaluation of the Malawi Social Action Fund (Masaf) Public Works Programme, was also used as primary data source.

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