By Benadetta Chiwanda Mia
A new study by the International Food Policy Research Institute has reiterated that agricultural yield volatility remains a big threat to Malawi’s economic stability and growth aspirations.
Using the Malawian Computable General Equilibrium model, the research identifies fluctuations in the yields of domestic cereals and oilseeds as primary factors affecting total Gross Domestic Product (GDP) and household consumption patterns.
The study further reveals that these agricultural shocks have a substantial impact on most households, with the exception of those in rural low-income categories, in an economy where agriculture contributes 24.5 percent to GDP and employs 63.5 percent of the workforce.
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It notes that manufacturing remains weak, contributing only 4.2 percent of GDP, despite having an 18.2 percent demand share, while manufactured goods account for 92.6 percent of imports, the research shows.
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“Rural low-income households’ consumption and poverty are exposed to a wide range of risks, including productivity volatility of livestock, yield volatility of oilseeds, cereals and vegetables and world market price of beverage crops,” the study says.
Additionally, it tracks Malawi’s declining GDP per capita through the 1980s and 1990s, followed by volatility in the 2000s, highlighting persistent challenges despite some improvements.
“Despite some economic improvement in the latter half of the 2000s, Malawi remains a low-income nation grappling with unstable economic development characterized by its dependence on rain-fed agriculture, inflation spikes, a persistent current account deficit and a weakening Malawi Kwacha,” the report reads.
The World Bank’s 2018 Systematic Country Diagnostic identified climatic shocks and a narrow export base— mainly tobacco, tea, and sugar—as ongoing challenges.
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President of the Economics Association of Malawi, Bertha Chikadza, notes that weather disruptions to agriculture trigger food shortages, income losses and inflation.
She points out gaps in long-term resilience building while acknowledging improvements in short-term emergency responses through humanitarian aid and early warning systems.
“Limited funding constrains investments in climate-smart agriculture, sustainable infrastructure and insurance mechanisms for businesses and farmers,” Chikadza said.
She advocates for public-private partnerships, green bonds and engagement with global climate funds to unlock financing.
In a recent interview, agriculture policy analyst Tamani Nkhono-Mvula said that agricultural transformation in Malawi requires a coordinated approach across sectors.
“Malawi has allocated more than 10 percent of its budget to agriculture but the failure to achieve our targets suggests that the 10 percent allocation is a bare minimum.
“The real focus should be on the actual growth rate of the sector. Agriculture’s performance depends not only on the 10 percent we invest but also on how sectors like transport and energy are performing. That’s why the Kampala Declaration emphasises a holistic approach to food systems,” Nkhono-Mvula said.
Following a poor 2024 harvest due to floods and dry spells, the agricultural challenges come at a particularly difficult time for Malawi’s economy, which is estimated to grow by just 1.8 percent in 2024, far below the initially projected 3.2 percent, largely due to poor agricultural output.
