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Malawi Malawi

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Malawi

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EconomicPoliticalStructural

Malawi – Quick View
ECR score34.31 (Mar 2011)
ECR rank119 (Mar 2011)
Economic
GDPUSD 4.77 billion
GNI per capita PPPUSD 911
FDI inflowUSD 66.45 million
Inflation7.4%
Unemployment rate3.1%
Government deficitUSD 724.74 million
Tax revenueUSD 700.1 million
Political
Government typeDemocracy
Recent political crisisNA
Economic freedom score119th
Freedom of information score79th
Corruption perception index85th
Structural
Birth rate39.5 per ‘000
Population balanceUnder 14 – 42.6%
Population balanceOver 60 years Females – 5.1%
Population balanceOver 60 years Males – 4.6%
Life expectancy yearsMale 51.8 years
Life expectancy yearsFemale 53.8 years
Mortality rate10 per ‘000
Literacy rate64%
Internet access4.39%

[Top] Economic Overview

Malawi’s economy is primarily dependent on agriculture and the majority of the labour force is engaged in agricultural and livestock related activities. Malawi's main exports include tobacco, tea, sugar and cotton. The main imports are fuel oils and fertilizers.

 

(Source: economywatch)

 

Gross domestic product (GDP)

 

The GDP at current prices in 2010 was MWK 731.61 billion compared to MWK 640.06 billion in 2009.

 

                                                   

                                                                             

Malawi GDP and GDP growth rate

(Source: Central Bank of Malawi)

 

Malawi’s GDP growth has been on the decline since 2008. In 2008, GDP growth was 19.4% and fell to 16.6% in 2009 and continued to fall to 14.3% in 2010.

 

GDP at constant prices in 2010 amounted to MWK 471,786.3 million, whereas in 2009 it was recorded at MWK 442,055.7 million.

 

(Source: Central Bank of Malawi)

 

GDP per capita at current prices was MWK 53,763.12 in 2010 compared to MWK 47,906.66 in 2009.

 

(Source: IMF)

 

Gross national income (GNI)

 

The GNI PPP per capita in 2010 was USD 911.

                                                   Malawi GNI per capita at PPP

(Source: UNDP)

 

Trade balance

 

Malawi’s total exports in 2009 were valued at MWK 167 billion which increased from MWK 123.4 billion in 2008. The total imports amounted to MWK 255.1 billion in 2009 which decreased from MWK 278.5 billion in 2008. Malawi had a trade deficit of MWK 88.6 billion in 2009 compared to a deficit of MWK 155.1 billion in 2008.

 

(Source: National Statistics)

 

Tax rates

 

Individual income tax rates:

 

Tax Slabs (MWK)

Tax Rate

0 - 108,000

   0%

108,000 - 144,000

  15%

144,000 and above

   30%

 

(Source: taxrates.cc)

 

Corporate tax

 

Corporate tax for companies registered in Malawi is 30% and for branches of foreign companies the tax is levied at 35%.

(Source: taxrates.cc)


Inflation rate

 

The average inflation rate in 2010 was 7.4% compared to 8.4% in 2009. The inflation rate in February 2011 and January 2011 were 7% and 6.6% respectively.

 

                                      

 

(Source: National Statistics)

 

Foreign direct investment (FDI)

 

FDI inflows in 2009 amounted to USD 60 million compared to USD 170 million in 2008.

 

(Source: UNCTAD)

 

Banking sector assets

 

The table below displays the assets of the Central Bank of Malawi.

Currency Unit: MWK million

Balance Sheet – Assets of Reserve Bank of Malawi (MWK million)

 

2009

2008

Property and equipment

9,428

7,708

Gold reserves

2,048

76

Special Drawing Rights

284

11

Investment in Malswitch

17

17

Investments in Malawi Government

103,973

91,011

Advances to Malawi Government

10,564

-

Loan to foreign institution

3,116

2,848

Loans to statutory bodies

979

1,973

Liquid assets

19,009

34,992

Other assets

3,323

5,218

Non-current assets classified as held for sale

-

1

Total Assets

152,741

143,855

(Source: CentralBank of Malawi)

[Top] Financial Indicators & Government Financial

 

Consumer price index

 

Malawi CPI

 

(Source: National Statistics)

 

Base year 2000 = 100

 

 

The consumer price index in Malawi is rising steadily. Consumer prices have almost tripled since 2000 and reached 309 in 2010. 

 

Interest rates

 

Interest Rates, June 2010 (%)

Minimum Lending Rate

19.63

Maximum Lending Rate

27.00

Savings Rate

2.75

Savings Plus

1.00

7 Day Call Deposit Rate

2.63

2 Months Deposit Rate

3.75

3 Months Deposit Rate

3.00

 

(Source: Central Bank of Malawi)

 

Money supply (Currency in Circulation)

 

The total money supply in 2010 (June) was MWK 175,308.44 million.


 

Money supply (MWK million)

 

As of June 2010

2009

Narrow Money (M1)

89,075.22

81,900.3

Quasi-money

86,233.22

92,131.0

Money Supply (M2)

175,308.44

174,032.2

 

(Source: Central Bank of Malawi, Central Bank of Malawi)

 

 

Government expenditure

 

Total expenditure in 2008/09 was MWK 229,242 million which was an increase over the previous year where it was MWK 183,776 million. Total government expenditure was 38.9% of GDP in 2008/09.

 

 

Expenditure of Government of Malawi (MWK million)

 

2008/09

2007/08

General Public Services

66,913.0

43,871.0

Social and Community Services

55,575.0

36,438.0

Economic Services

33,464.0

21,940.0

Total Recurrent Expenditure

155,952.0

102,249.0

Debt Amortization

16,169.0

13,040.0

Total

172,121.0

115,289.0

Development Expenditure

57,120.7

64,088.7

Total Expenditure

229,242.0

183,776.0

 

(Source: National Statistics)

 

Public debt

 

The total external public debt in 2009 amounted to USD 870 million compared to USD 683 million in 2008.

 

(Source: AFDB)

Official exchange rate

 

                                                       Malawi Exchange rate

(Source: AFDB)

Government finances

 

 

Fiscal balance

                                                        Malawi Fiscal balance

(Source:National Statistics)

 

The fiscal deficit in 2008/09 was MWK 111,076 million compared to a deficit of MWK 80,683 million in 2007/08.

 

Total Revenue

The total revenue in 2008/09 was MWK 118,166 million which was 20% of GDP.

Revenues of Government of Malawi (MWK million)

 

2008/09

2007/08

Tax Revenue

107,300

92,953

Non Tax Revenue

10,866

540

Total Revenue

118,166

105,893

 

(Source: National Statistics)

 

Tax revenue

 

Tax revenue in Malawi in 2008/09 was MWK 107,300 million compared to MWK 95,353 million in 2007/08.

 

(Source: National Statistics)

 

Total grants

                                               Malawi Grants

(Source:National Statistics)

Current account balance

The current account balance in 2010 was estimated at 1.67% of GDP compared to 8.1% in 2009.

                                        Malawi Current account balance

(Source: IMF)

 

Balance of payments

 

 

Balance of Payments (USD million)

 

2008

2007

Trade balance

-67,316

-75,753

Services Balance

-33,579

-32,230

Net Income

-3,048

-2,974

Current transfers, net total

11,226

10,908

Current account balance

-92,717

-100,049

(Source: AFDB)

[Top] Labour Force and Employment Overview

The total size of the labour force in Malawi was 6.11 million people in 2008.  The total labour force participation rate in 2008 was 86%. The labour force participation rate for men and women was 84% and 87% respectively.

 

The employment rate in Malawi in 2008 was 99%; the employment rate in terms of men and women was also 99%. The majority of the labour force is employed in agriculture, forestry and fishing.

 

The unemployment rate in 2008 was 1%; the unemployment rate for both men and women was 1%. The urban unemployment rate was 4% compared to only 1% in rural areas.

 

(Source: World Bank, National Statistics)

 

Unemployment rate by age group

 

Unemployment rate, 2008 (%)

Age Group

Total

Male

Female

15-24

4

5

3

25-34

1

1

1

35-49

0

0

0

50-64

0

0

0

65+

0

0

0

(Source: National Statistics)

 

Minimum wage

The minimum wages are set by the Ministry of Labor based on recommendations made by the Tripartite Wage Advisory Board (TWAB). The TWAB is made up of representatives of the workforce, government and the private sector. The minimum wage in urban areas is USD 1 per day and in rural areas is 75 cents per day.

 

The minimum wage for a 19-year old worker or an apprentice is USD 22.6 per month.

 

(Source:estandardsforum.org, doingbusiness.org)

 

Level of unionisation

 

The Malawi Congress of Trade Unions (MCTU) is one of the largest trade unions in Malawi with a membership of over 180,000 people.

 

(Source: ITUC)

[Top] Political Stability

 

 

Malawi has a democratic multi-party government system. The executive branch includes the president, vice-presidents and the cabinet. The president is the head of state and also the head of government. The president is elected for a five year term. The members of the cabinet are appointed by the president.

 

The legislative powers in Malawi are held by the national assembly, which is unicameral and made up of 193 members. The members are directly elected for a five-year term.

 

The main political parties in Malawi are:

  • Democratic Progressive Party (DPP)
  • United Democratic Front (UDF)
  • Malawi Congress Party (MCP)
  • Alliance for Democracy (AFORD)
  • Malawi Forum for Development (MAFUNDE)
  • Congress for National Unity (CONU)

(Source: estandardsforum.org, state.gov, IPU)

 

Malawi Economic Freedom Indices

 

(Source:Heritage.org)

 

Malawi's economic freedom score is 55.8 making its economy the 119th freest in the 2011 Index of Economic Freedom. Malawi is ranked 21st out of 46 countries in the Sub-Saharan Africa region and its score is below the world average.

 

Corruption perception

 

The Corruption Perceptions Index (CPI) is a survey to measure the perceived level of corruption across countries worldwide. Malawi was ranked 85th on the 2010 list compared to 89th in 2009 which indicates that the corruption levels in the public departments in Malawi are decreasing.

 

(Source:transparency.org)

 

Freedom of information

 

The constitution guarantees freedom of the press. The main television station is controlled by the government along with the main radio station.

 

(Source: BBC)

 

Malawi is ranked 79th in the World Press Freedom Index 2010 with a score of 21.00, indicating that media in Malawi has moderate levels of freedom.

 

(Source: rsf.org)

 

Newspapers

  • The Nation
  • The Daily Times
  • Malawi News
  • Boma Lathu

(Source: BBC)

 

Judicial system

 

The judicial system in Malawi is based on the system prevailing in the British colonial era, consisting of a Supreme Court of Appeal, a High Court, Magistrate courts and traditional courts.

 

The Supreme Court is the highest court for appeal and has jurisdiction to hear appeals from the High Court and other courts.

 

The High Court has jurisdiction over all civil and criminal cases.

 

There are four types of Magistrate courts:

  • Courts of Resident Magistrates
  • Courts of magistrates of the First Grade
  • Courts of Magistrates of the Second Grade
  • Courts of Magistrates of the Third Grade

 

(Source: nyulawglobal.org)

[Top] Demographic Overview

The total population of Malawi in 2008 was 13.08 million, increasing at a rate of approximately 2.8% over the previous year. The population density was 139 people per sq km.

(Source: National Statistics)

                                                                                                                 Malawi Population by gender

The gender ratio in Malawi is not balanced i.e. there are about 94.7 men for every 100 women in Malawi.

(Source: National Statistics)

 

The number of people below the age of 14 made up  46.2% of the total population (in 2009). In 2009, 5.1% women and 4.6% men (% of total population) were above the age of 60.

 

The average life expectancy for women and men was 53.8 years and 51.8 years respectively.

 

The infant mortality rate was 83.7 (per thousand) between 2005-2010. The crude birth rate in 2008 was 39.5 births (per thousand). The crude death rate was 10 deaths (per thousand).

(Source: UN, National Statistics)

 

The international migrant stock till mid-2010 was recorded at 275,900 people. This was approximately1.8 % of the entire population.

(Source: UN)

 

According to the 2008 census, 15.3% of the total population were residing in urban areas compared to 14.4% recorded in the 1998 census. The total rural population was 84.7%, which decreased from 85.6% in the 1998 census. The urban population in Malawi increased from 1.4 million in 1998 to 2 million in 2008. The majority of the urban population are concentrated in the four major cities of Blantyre, Lilongwe, Mzuzu and Zomba.

(Source: National Statistics)

Ethnic groups in Malawi include:

 

  • Chewa
  • Nyanja
  • Tumbuka
  • Yao
  • Lomwe
  • Sena
  • Tonga
  • Ngoni
  • Ngonde
  • Asian
  • European

 

The main religious groups in Malawi are Protestants, Roman Catholics and Muslims.

 

(Source: state.gov)

 

Malawi ranked 153rd out of 169 countries on the Human Development Index 2010 conducted by the United Nations. The HDI provides a composite measure of three dimensions of human development: living a long and healthy life (measured by life expectancy), being educated (measured by adult literacy and gross enrolment in education) and having a decent standard of living (measured by purchasing power parity, PPP, income).

 

(Source: UNDP)

[Top] Soft Infrastructure

Education

Malawi's literacy rate in 2008 was at 64%.

(Source: National Statistics)

The official school starting age in Malawi is six years. According to the 2008 census, only 28% of the total population aged 6 and above were attending school.

School attendance

Total students

Age 6-13

Age 14-17

Age 18+

Malawi (Total)

10,241,359

2,872,917

1,089,130

6,279,312

Never attended

2,211,957

404,580

92,098

1,715,279

Ever attended

5,173,301

363,956

415,426

4,393,919

Currently attending

2,856,101

2,104,381

581,606

170,114

(Source: National Statistics)

 

 

The combined gross enrolment ratio in 2010 for males and females was 61.9%. The expenditure on education is estimated at 4.1% of GDP.

 

(Source: UNDP)

 

Health care

The major causes of deaths in children below the age of 5 Malawi in 2008 included malaria, pneumonia and diarrhoea.

 

The health workforce statistics indicate that there were 0.2 physicians per 10,000 people which was below the regional average of 2.4. There were 2.8 nurses and midwives per 10000 people which was below the regional average.

 

HIV/AIDS was prevalent in 11.9% of the total adult population. There were 930,000 people living with AIDS of which 490,000 were women aged 15 and over and 91,000 were children (ages 0-14). The deaths recorded that were caused by cancer were 150 (per 100,000) and AIDS caused 605 deaths per 100,000 people.

 

The per capita health expenditure in 2006 was USD 62. The public expenditure on health in 2007 was 5.9% of GDP.

 

(Source: WHO, estandardsforum.org, UNDP)

[Top] Hard Infrastructure

The preferred mode of public transport in Malawi is by road. The total road network in Malawi includes 15,451 km of roads, of which only 45% are paved.

 

The railways in Malawi include 797 km of track and are mostly used for freight carriage.

 

(Source: estandardsforum.org)

 

Ports:  

 

Chipoka, Monkey Bay, Nkhata Bay, Nkhotakota and Chilumba.

 

(Source: indexmundi)

 

Airports

 

There are 34 airports of which only 6 are paved. Malawi has 2 international airports.

 

Town

Airport name

Runway Length (ft)

Blantyre

Chileka

7,600

Chelinda

Chelinda

4,200

Chitipa

Chitipa

5,900

Club Makokola

Club Makokola

3,500

Dwangwa

Dwangwa

3,900

Karonga

Karonga

4,200

Kasungu

Kasungu

3,900

Kasungu

Lifupa

3,600

Katumbi

Katumbi

3,300

Lilongwe

Lilongwe Intl

11,600

Mchinji

Mchinji

3,200

Monkey Bay

Monkey Bay

3,500

Mzuzu

Mzuzu

4,200

Salima

Salima

4,500

 

(Source: Air charter world)

 

Telecommunications networks

 

In 2009, 4.39% of the population used internet services. In the same period, total fixed-line telephone subscribers in Malawi were registered at 175,000 or 1.15 people (per 100 people) and the total mobile phone subscriptions was registered at 2,400,000 people or 15.72 per 100 people.

 

 

                                                   

 

 

(Source: ITU)

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