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Contact at AFI team is Alize le Roux
This entry was last updated on 24 August 2022 using IFs v7.63.

In this entry, we first describe the Current Path forecast for Malawi as it is expected to unfold to 2043, the end of the third ten-year implementation plan of the African Union’s Agenda 2063 long-term vision for Africa. 

The Current Path forecast is divided into summaries on demographics, economics, poverty, health/WaSH and climate change/energy.

A second section then presents a single positive scenario for potential improvements in stability, demographics, health/WaSH, agriculture, education, manufacturing and transfers, leapfrogging, free trade, financial flows, infrastructure, governance and the impact of various scenarios on carbon emissions.

With the individual impact of these sectors and dimensions having been considered, a final section presents the impact of the Combined Agenda 2063 scenario. 

We generally review the impact of each scenario and the Combined Agenda 2063 scenario on gross domestic product per person and extreme poverty except for Health/WaSH that uses life expectancy and infant mortality. 

The information is presented graphically and supported by brief interpretive text.

 All US$ numbers are in 2017 values.

Summary

  • The Current Path forecasts show that Malawi will:
  • Sectoral scenarios
    • Under the Stability scenario, it is expected that the number of people in extreme poverty will decrease to about 4.29 million people by 2043, down from 12.43 million people in 2019. Jump to Stability scenario
    • The Demographics scenario could see Malawi reaching its demographic dividend by 2035, 6 years earlier than under the Current Path scenario. Jump to Demographic scenario
    • Under the Health/WaSH scenario, it is expected that life expectancy will increase from 61.9 years in 2019 to 70.3 years by 2043. Jump to Health/WaSH scenario
    • The Agricultural scenario has the potential to reduce the net agricultural import dependency by 14.3% in 2043, compared to the Current Path scenario; however, it is projected that Malawi will continue to be a net agricultural importer. Jump to Agricultural scenario
    • The Education scenario will benefit the country by raising GDP per capita to US$4 250 by 2043. Jump to Education scenario
    • The Manufacturing/Transfer scenario will result in a 6-percentage point improvement in extreme poverty compared to the Current Path scenario, resulting in 2 million fewer people living in poverty by 2043. Jump to Manufacturing/Transfer scenario
    • The Leapfrogging scenario has the potential to drastically improve electricity access from 15.6% in 2019 to 78.6% by 2043, 18.2 percentage points above the Current Path scenario. Jump to Leapfrogging scenario
    • In the Free Trade scenario, GDP per capita is expected to increase to US$4 857 by 2043, compared to a per capita income of US$4 033 under the Current Path scenario. Jump to Free Trade scenario
    • In the Financial Flows scenario, foreign direct investment (FDI) inflows increase from 2024 onwards and represent 6.8% of GDP by 2043, compared to the Current Path scenario at 6.2% of GDP in the same time period. Jump to Financial Flows scenario
    • The Infrastructure scenario will positively influence rural accessibility, and by 2043 it is projected that 61.7% of the rural population will have access to an all-weather road, compared to 58.1% for the Current Path scenario. Jump to Infrastructure scenario
    • In the Governance scenario, the number of people in poverty will reduce to 4.4 million people by 2043. Jump to Governance scenario
    • The Free Trade scenario is projected to have the biggest impact on carbon emissions by 2043 of all 11 scenarios, resulting in additional emissions of 1.3 million tons of carbon above the Current Path forecast. Jump to Impact of scenarios on carbon emissions
  • The Combined Agenda 2063 scenario will result in:

All charts for Malawi

Chart 1: Political map of Malawi
Chart
Malawi: Current Path forecast

Malawi: Current Path forecast

This page provides an overview of the key characteristics of Malawi along its likely (or Current Path) development trajectory. The Current Path forecast from the International Futures forecasting (IFs) platform is a dynamic scenario that imitates the continuation of current policies and environmental conditions. The Current Path forecast is therefore in congruence with historical patterns and produces a series of dynamic forecasts endogenized in relationships across crucial global systems. We use 2019 as a standard reference year and the forecasts generally extend to 2043 to coincide with the end of the third ten-year implementation plan of the African Union’s Agenda 2063 long-term development vision.

Malawi is located in south-eastern Africa, a landlocked country nestled between Mozambique, Zambia and Tanzania [Chart 1]. Malawi has a total country area of 118 484 km² with around 20% occupied by surface water bodies, the largest being Lake Malawi. The country has a tropical climate with two distinct seasons: a rainy and warm season from November to April that results in significant annual flooding and a dry season from May to October. Rainfall variability has resulted in eight devastating droughts in the past four decades. [1EM-DAT, the International Disaster Database. CRED/UCLouvain 2020.] Due to the high reliance on subsistence farming, these droughts can often result in loss of life and livelihoods, as was the result from the 2002 drought that caused widespread famine and loss of life.

Chart 1: Political map of Malawi
Chart
Demographics: Current Path

Demographics: Current Path

In 2019, Malawi had a population of 18.6 million people. By 2043, the country is expected to have 31.5 million people, a population increase of 12.9 million. This is a population increase of 69.4% over the next two decades. Malawi has a very large youthful population with 43.3% of its population below the age of 15 years, accounting for 8 million children [Chart 2]. With an expected drop in fertility rate, it is expected that by 2043, 32.4% of the population will be below 15 years, accounting for 10 million children. Such a large youthful population in the absence of economic growth and employment opportunities can result in a source of social and political conflict and instability.

The median age in Malawi is 17.9 years, reflecting a very high historical fertility rate. Malawi’s life expectancy is 61.9 years, the result of a very high disease burden including communicable and non-communicable diseases, low access to improved sanitation and a high dependency on subsistence farming resulting in low food security. The forecast suggests that average life expectancy can increase to 69.8 years by 2043. Fertility rates have significantly decreased in the past two decades dropping from 7.3 births per woman in 1990 to 4.2 in 2019, and they are forecast to be 2.5 by 2043. The median age is expected to increase to 23.8 by 2043 and the potential labour force is expected to increase by 8.1 million people. This relatively large workforce could allow Malawi to reach its demographic dividend by 2040, when the ratio of working-age persons to dependents is greater than 1.7.

Chart 3 displays the percentage of people living in urban and rural spaces from 1990 to 2043. Malawi is predominantly rural, with 15.4 million (82.9%) people living in rural areas scattered throughout the country. The country has a slower urbanisation and growth rate compared to other low-income countries in Africa. The urbanisation rate is forecast to increase from 17.1% in 2019 to 23.4% by 2043, while the average of low-income countries in Africa is expected to increase from 31% to 40.7% during the same time period. Malawi’s urbanisation rate has been slower than its counterparts in part due to a very aggressive integrated rural development focus contained in the 2006 Malawi Growth and Development Strategy, with a large dependence on agricultural subsistence farming and a slow diversification of the economy. Nonetheless, 4.2 million more people will be living in cities throughout Malawi by 2043.

Chart 4 illustrates a map of the population distribution in Malawi. Malawi is the 10th most densely populated country in Africa, and the majority of the rural population is located in the central and southern regions of the country, within a 100 km radius from the cities of Lilongwe and Blantyre. Most of the formal economic activity does not follow this dispersed distribution of rural population density. Instead, formal economic activity is concentrated in the towns of Lilongwe, Blantyre, Zumba and Mzuzu. A small strip of land around Lake Malawi is also occupied with dense rural settlements. Malawi’s population density is almost fivefold that of low-income countries in Africa. Rural populations are forecast to grow by an additional 8.7 million people between 2019 and 2043 that will place even more pressure on land use management and will need careful planning in order to protect agricultural land from erosion and degradation. Unplanned rural sprawl, growth and densification also threaten encroachment into protected land.

Chart 4: Population density map for 2019
Chart
Economics: Current Path

Economics: Current Path

Chart 5 displays the GDP at market exchange rate (MER) from 1990 to 2043 using 2017 exchange rates. The GDP of Malawi has more than tripled from US$3.7 billion in 1990 to US$11.7 billion in 2019. Malawi’s GDP is forecast to grow substantially to US$78.8 billion by 2043, with very high growth rates reaching 12.6% by 2043. This rapid growth rate will elevate Malawi’s GDP from 13th place amongst low-income countries in Africa in 2019 to 6th place by 2043.

Although many of the charts in the sectoral scenarios also include GDP per capita, this overview is an essential point of departure for interpreting the general economic outlook of Malawi.

Chart 6 displays the GDP per capita at purchasing power parity (PPP) for Malawi and low-income economies in Africa. Malawi has the 7th lowest GDP per capita in 2019 at a value of US$1 288, US$500 below the average for low-income economies in Africa. The GDP per capita is expected to triple to US$4 033 per capita, making it the 7th highest GDP per capita by 2043, overtaking the average income per capita for low- income economies in Africa by 2042.

Chart 7 displays the share of GDP contributed by the informal sector of Malawi and low-income countries across Africa. The proportion of GDP generated in 2019 by the informal sector in Malawi was estimated to be 34.6%, translating to a value of US$3.7 billion. The informal economy is the 9th largest in Africa and is 4.5% higher than the average of low-income countries in Africa. In 2019, the informal sector was responsible for employing 68.8% of Malawi’s 8.2 million-labour force. A large dependency on subsistence farming in rural communities contributes to the high share of informal labour. On the projected economic growth trajectory for the country, the informal labour share will decline to around 26% by 2043, slightly higher than the average for low-income countries in Africa.

Chart 8A displays the contribution of each sector as a per cent of GDP and Chart 8B displays the value-added contribution per sector in US$. At 53.7% in 2019 (US$5.7 billion), the services sector makes up the largest percentage of GDP contribution by sector. The services sector is expected to remain the dominant contributor, growing to 58.2% (valued at US$42.1 billion) by 2043. The agricultural sector is currently the second largest contributor to the economy at 23.6% (valued at US$2.5 billion) and is expected to drastically decline to 4.5% (valued at US$3.3 billion). This shift will signify the structural transformation of Malawi’s economy and the diminishing dominance of the agricultural sector. The manufacturing sector is expected to grow from 16.3% to 29.5% by 2043, expanding the GDP contribution of this sector from US$1.7 billion in 2019 to US$21.3 billion in 2043.

The data on agricultural production and demand in the IFs forecasting platform initializes from data provided on food balances by the Food and Agricultural Organization (FAO). IFs contains data on numerous types of agriculture but aggregates its forecast into crops, meat and fish, presented in million metric tons.

Chart 9 displays the agricultural production and demand in metric tons. 40.4% of Malawi’s 9.4 million hectares of land was used for crops in 2019. Malawi has the second highest crop yields amongst the 23 low-income African countries with 7.2 million metric tons per hectare in 2019. The agricultural production amounted to 25.7 million metric tons, 0.4 million metric tons less than the 26.1 million metric ton agricultural demand. The demand and production gap is, however, expected to increase significantly resulting in a 16.3 million metric tons unmet demand by 2043. This paints a picture of growing food insecurity amidst a rapidly expanding population and is a similar pattern observed in other low-income countries across Africa.

Poverty: Current Path

Poverty: Current Path

There are numerous methodologies and approaches to defining poverty. We measure income poverty and use GDP per capita as a proxy. In 2015, the World Bank adopted the measure of US$1.90 per person a day (in 2011 international prices), also used to measure progress towards the achievement of Sustainable Development Goal 1 of eradicating extreme poverty. To account for extreme poverty in richer countries occurring at slightly higher levels of income than in poor countries, the World Bank introduced three additional poverty lines in 2017: 

  • US$3.20 for lower middle-income countries
  • US$5.50 for upper middle-income countries
  • US$22.70 for high-income countries.

Charts 10A and 10B display the number and the percentage of people living below the poverty line. Malawi, as a low-income country, uses the US$1.90 benchmark. The country has an extremely high burden of poverty. In 2019, 12.43 million (66.9%) people lived below the poverty line. This is 19.1 percentage points higher compared to the average for low-income countries in Africa. It is expected that extreme poverty will decrease and that under the Current Path forecast 4.9 million (15.4%) people will live below the poverty line in 2043, a third less compared to the 2019 poverty rate. It is forecast that the poverty rate in Malawi will be 9.7 percentage points lower compared to the average for low-income countries in Africa. Social welfare (government to household transfers, welfare) comprised 2% of GDP expenditure in 2019 and is expected to increase to 6.7% of GDP expenditure by 2043.

Carbon Emissions/Energy: Current Path

Carbon Emissions/Energy: Current Path

The IFs platform forecasts six types of energy, namely oil, gas, coal, hydro, nuclear, and other renewables. To allow comparisons between different types of energy, the data is converted into billion barrels of oil equivalent. The energy contained in a barrel of oil is approximately 5.8 million British thermal units (MBTUs) or 1 700 kilowatt-hours (kWh) of energy.

Chart 11A displays energy production by type in billion barrels of oil equivalent and Chart 11B displays energy production as a percentage of total production. Malawi has a total energy production of 9.3 million barrels of oil equivalent in 2019 and it is estimated to exceed 14.2 million barrels of oil equivalent by 2043. Malawi’s energy mix is heavily reliant on fossil fuels, with 88.9% reliance on gas (7.8 million barrels), followed by hydro at 10%. The energy mix is expected to radically change from fossil fuels to renewables, with gas contributing 14.1% to the energy mix while renewables are projected to contribute 83.1% by 2043.

Carbon is released in many ways, but the three most important contributors to greenhouse gasses are carbon dioxide (CO2), carbon monoxide (CO) and methane (CH4), with methane having the biggest negative impact. Each has a different molecular weight. IFs uses carbon rather than CO2 equivalent.

Chart 12 displays tons of carbon emissions for Malawi. Malawi’s carbon emissions were 0.7 million tons of carbon in 2019 and will increase more than tenfold to 7.3 million tons of carbon emission by 2043.

Stability scenario

Stability scenario

The Stability scenario represents reasonable but ambitious reductions in risk of regime instability and lower levels of internal conflict. Stability is generally a prerequisite for other aspects of development, and this would encourage inflows of foreign direct investment (FDI) and improve business confidence. Better governance through the accountability that follows substantive democracy is modelled separately.

The intervention is explained in here in the thematic part of the website.

Chart 13 displays the governance security index for Malawi under the Current Path forecast and the Stability scenario. This scenario reflects significant interventions in increasing regime stability, lowering levels of internal conflict, improving gender empowerment and addressing high corruption levels. Malawi has a higher level of governance security compared to the average of low-income countries in Africa. Malawi also has higher levels of capacity and inclusion and is enjoying more civil and political freedoms compared to the average low-income countries in Africa. Under the Stability scenario, governance security is projected to increase even more rapidly.

Chart 14 displays the GDP per capita at purchasing power parity (PPP) for the Current Path forecast and the Stability scenario for Malawi and the average for low-income African countries. In 2019, Malawi had the 7th lowest GDP per capita in Africa at a value of US$1 288. Under the Stability scenario, it is projected that the GDP per capita will increase to US$4 257 by 2043, US$282 more than the average of low-income countries in Africa. The Stability scenario will increase GDP per capita by US$224 compared to the Current Path forecast

Chart 15A displays the number of people living below the poverty line. Malawi, as a low-income country, uses the US$1.90 benchmark. The country has an extremely high burden of poverty. In 2019, 12.43 million people were living below the poverty line. Under the Stability scenario, it is expected that there will be a decrease to about 4.29 million people living in extreme poverty by 2043, 575 000 fewer people than under the Current Path forecast.

Chart 15B displays the percentage of people living below the poverty line in Malawi as well as the average for low-income countries in Africa under the Current Path forecast and the Stability scenario. In 2019, it was projected that 66.9% of people in Malawi were living below the poverty line, a figure that is 19.1 percentage points higher than the average of low-income countries in Africa. It is expected that extreme poverty in Malawi will decrease drastically by 2043 under the Stability scenario and that about 13.6% of the population will live below the poverty line, relative to 15.4% in the Current Path scenario.

Demographic scenario

Demographic scenario

This section presents the impact of a Demographics scenario that aims to hasten and increase the demographic dividend where relevant through reasonable but ambitious reductions in the communicable-disease burden for children under five, the maternal mortality ratio and increased access to modern contraception.

The intervention is explained in here in the thematic part of the website.

Demographers typically differentiate between a first, second and even a third demographic dividend. We focus here on the first dividend, namely the contribution of the size and quality of the labour force to incomes. It refers to a window of opportunity that opens when the ratio of the working-age population (between 15 and 64 years of age) to dependents (children and the elderly) reaches 1.7.

Chart 16 displays the impact of the interventions made in the Demographics scenario compared to the Current Path forecast for Malawi. Increased access to modern contraception will have a dramatic impact on fertility rates. Fertility rates are expected to decline much quicker than in the Current Path forecast to reach 2.3 births per woman by 2033, compared to the same level being reached only in 2045 in the Current Path forecast. This will impact Malawi’s total population, which will be roughly 2.2 million fewer people by 2043 under the Demographics scenario. In this scenario, it is projected that Malawi will reach its demographic dividend by 2035, 6 years earlier than under the Current Path forecast and 7 years earlier than the average for low-income countries in Africa.

The infant mortality rate is the number of infant deaths per 1000 live births and is an important marker of the overall quality of the health system in a country.

Chart 17 displays the infant mortality rate (infant deaths per 1 000 live births) for the Demographics scenario compared to the Current Path forecast. Malawi has a relatively high (although lower compared to low-income countries in Africa) infant mortality rate at 42.2 infant deaths per 1 000 live births. This figure has drastically improved from 125.2 in 1990. Under the Demographics scenario, Malawi reaches 25 deaths per 1 000 live births by 2030, 4 years earlier than the Current Path forecast. The Demographics scenario reduces infant mortality rates to 12.8 deaths per 1 000 live births by 2043 compared to 16.4 deaths in the Current Path forecast.

Chart 18 displays the GDP per capita for Malawi and low-income countries across Africa under the Demographics scenario and Current Path forecast. Malawi had a very low GDP per capita in 2019 at a value of US$1 288, lower than the average for low-income countries in Africa. The GDP per capita is expected to increase to US$4 033 and US$4 338 respectively under the Current Path forecast and the Demographics scenario by 2043. It is expected that under the Demographics scenario, Malawi will overtake the per capita average of low-income countries by 2041.

Chart 19A displays the number of people living below the poverty line and Chart 19B displays the per cent of the population living below the poverty line in Malawi under the Current Path forecast and the Demographics scenario. Compared to the Current Path forecast, the Demographics scenario reduces extreme poverty by 781 000 people by 2043, resulting in 4.1 million people living in extreme poverty by 2043; this represents 14% of the population compared to 15.4% in the Current Path forecast. This is a huge improvement from the rate of 66.9% in 2019.

Health/WaSH scenario

Health/WaSH scenario

This section presents reasonable but ambitious improvements in the Health/WaSH scenario, which includes reductions in the mortality rate associated with both communicable diseases (e.g. AIDS, diarrhoea, malaria and respiratory infections) and non-communicable diseases (NCDs) (e.g. diabetes), as well as improvements in access to safe water and better sanitation. The acronym WaSH stands for water, sanitation and hygiene.

The intervention is explained in here in the thematic part of the website.

Chart 20 displays the life expectancy for Malawi under the Current Path forecast and the Health/WaSH scenario. In 2019, the life expectancy at birth for the average Malawian was 61.9 years, with females having a longer life expectancy than males by about 5 years. The low life expectancy is attributed to a high prevalence of communicable diseases. The prevalence of HIV is also quite high, with 5.5% of the adult population being infected, the second highest amongst low-income African countries. Communicable diseases accounted for 55% of deaths in 2019, while non-communicable diseases accounted for 38.5%. While life expectancy is projected to reach 70.3 years by 2043 under the Health/WaSH scenario, it will still lag behind the average of low-income African countries that are projected to reach a life expectancy of 71.4 years by 2043.

Chart 21 displays the infant mortality rate (infant deaths per 1 000 live births) for the Health/WaSH scenario compared to the Current Path forecast. The Health/WaSH scenario will reduce infant deaths more quickly compared to the Current Path forecast, reaching  15.5 deaths per 1 000 live births in 2043.

Agriculture scenario

Agriculture scenario

The Agriculture scenario represents reasonable but ambitious increases in yields per hectare (reflecting better management and seed and fertilizer technology); increased land under irrigation; and reduced loss and waste. Where appropriate, it includes an increase in calorie consumption, reflecting the prioritisation of food self-sufficiency above food exports as a desirable policy objective.

The intervention is explained in here in the thematic part of the website.

The data on yields per hectare (in metric tons) is for crops but does not distinguish between different categories of crops.

Chart 22 displays yields per hectare measured in metric tons. In 2019, yields in Malawi stood at 7.17 metric tons per hectare, almost threefold the average of low-income countries in Africa. Under the Agriculture scenario, it is forecast that yields will increase to 11.4 metric tons by 2043. The Agricultural scenario will improve yields by 2043 with 2 metric tons compared to the Current Path forecast.

Chart 23 displays import dependence as a per cent of net demand of agricultural production and demand in metric tons in the Current Path forecast and the Agriculture scenario. In 2019, total agricultural demand only exceeded production by 0.34 million metric tons, accounting for a 1.6% food-trade deficit. The food-trade deficit is expected to increase in both scenarios. The Agricultural scenario will benefit Malawi through lowering dependency on agricultural imports, but Malawi is expected to continue to be a net-importer of food, importing 9.5 million metric tons by 2043 under the Agricultural scenario.

Chart 24 displays the GDP per capita for Malawi under the Current Path forecast and the Agriculture scenario. The Agriculture scenario will positively influence GDP per capita and it is expected to increase to US$4 501 by 2043 compared to the Current Path forecast at US$4 033. GDP per capita has remained below the average for low-income countries in Africa, but under the Agricultural scenario it is expected to overtake the average of low-income African countries by 2041.

Chart 25A displays the number of poor people at US$1.90 per day and Chart 25B displays the percentage of poor people in Malawi under the Current Path forecast and the Agricultural scenario. In the Agricultural scenario, it is expected that extreme poverty in Malawi will decrease by 2043 to 8.4% of the population compared to 15.4% under the Current Path forecast. This will result in 2.6 million people living in extreme poverty by 2043 compared to the 12.4 million people that lived in extreme poverty in 2019.

Education scenario

Education scenario

The Education scenario represents reasonable but ambitious improved intake, transition and graduation rates from primary to tertiary levels and better quality of education. It also models substantive progress towards gender parity at all levels, additional vocational training at secondary school level and increases in the share of science and engineering graduates.

The intervention is explained in here in the thematic part of the website.

Chart 26 displays the mean years of education for Malawi under the Current Path forecast and the Education scenario. Under the Education scenario, the mean years of education increases from 5.2 years in 2019 to 7.1 years in 2043. This is an increase of 0.3 years compared to the Current Path forecast at 6.8 years in the same year. Malawi performs better than the average of other low-income countries in Africa with a mean of 0.8 years more education in 2019 and 0.5 years by 2043 under the Education scenario.

Chart 27A displays the average test scores for primary learners in Malawi under the Current Path forecast and the Education scenario. Malawi’s primary test score in 2019 was 36.5%, and by 2043, it is expected to marginally increase to 37.1% under the Current Path forecast. The Education scenario is expected to benefit Malawi and it is forecast that average test scores for primary learners will reach 43.2% by 2043, 6.7 percentage points higher than the Current Path forecast.

Chart 27B displays the average test scores for secondary learners in Malawi for the Current Path forecast and the Education scenario. Under the Education scenario, the test score at the secondary level is 45.6% in 2043, up from 37.5% in 2019. The Education scenario is expected to result in test scores for secondary learners to be 6.7 percentage points higher by 2043 than the Current Path forecast at 38.9%.

Chart 28 displays the GDP per capita for Malawi under a Current Path forecast and the Education scenario. The GDP per capita is expected to increase to US$4 033 under the Current Path forecast and US$4 247 under the Education scenario. GDP per capita for Malawi is expected to overtake the average GDP per capita for low-income African countries by 2042 under the Education scenario.

Chart 29A displays the number of poor people and Chart 29B displays the percentage of poor people in both the Current Path and the Education scenarios. In the Education scenario, it is expected that extreme poverty in Malawi will decrease to 12.7% by 2043 compared to 66.9% in 2019. This will result in 4 million people living in extreme poverty by 2043, 872 000 fewer people than under the Current Path forecast.

Manufacturing/transfers scenario

Manufacturing/transfers scenario

The Manufacturing/Transfers scenario represents reasonable but ambitious manufacturing growth through greater investment in the economy, investments in research and development, and promotion of the export of manufactured goods. It is accompanied by an increase in welfare transfers (social grants) to moderate the initial increases in inequality that are typically associated with a manufacturing transition. To this end, the scenario improves tax administration and increases government revenues.

The intervention is explained in here in the thematic part of the website.

Chart 31 should be read with Chart 8 that presents a stacked area graph on the contribution to GDP and size, in billion US$, of the Current Path economy for each of the sectors.

Chart 30A displays the percentage point difference and Chart 30B the absolute size difference in dollars between the Current Path forecast and the Manufacturing/Transfers scenario. Under the Manufacturing/Transfers scenario, the services sectors will make up the largest contributions to the economy. The services sector improves to a value of US$52.3 billion under the Manufacturing and Transfer scenario compared to US$46 billion in the Current Path forecast to represent a 0.4 percentage improvement by 2043. This increase translates to a value of US$6.3 billion. The Manufacturing/Transfers scenario will result in the manufacturing sector contributing US$3 billion more to the economy by 2043 compared to the Current Path forecast while the ICT sector will contribute an additional US$720 million under this scenario.

The chart displays government welfare transfers to unskilled workers in billions of US$ [Chart 31] in Malawi for the Current Path forecast and the Manufacturing/Transfers scenario. Welfare transfers in 2019 wasUS$0.23 billion) and is expected to increase to US$8.9 billion of GDP by 2043 under the Manufacturing/Transfers scenario. This is US$4.9 billion over the Current Path forecast in 2043.

Chart 32 displays the GDP per capita for Malawi under a Current Path forecast and a Manufacturing and Transfer scenario. The GDP per capita is expected to increase to US$4 033 under the Current Path forecast and US$4 450 under the Manufacturing and Transfer scenario. Both the Current Path and the Manufacturing and Transfer scenario will result in a higher GDP per capita by 2043 compared to the average for low-income countries in Africa.

The charts display the number [Chart 33A] and the percentage [Chart 33B] of people living below the poverty line for both the Current Path forecast and the Manufacturing/Transfers scenario. The Manufacturing/Transfers scenario has the potential to reduce the number of poor people to 3 million (9.4%) by 2043, down from 12.4 million in 2019. This scenario will result in a 6-percentage point alleviation of extreme poverty by 2043, compared to the Current Path forecast.

Leapfrogging scenario

Leapfrogging scenario

The Leapfrogging scenario represents reasonable but ambitious adoption of and investment in renewable energy technologies, resulting in better access to electricity in urban and rural areas. The scenario includes accelerated access to mobile and fixed broadband and the adoption of modern technology that improves government efficiency and allows for the more rapid formalisation of the informal sector.

The intervention is explained in here in the thematic part of the website.

Fixed broadband includes cable modem Internet connections, DSL Internet connections of at least 256 KB/s, fibre and other fixed broadband technology connections (such as satellite broadband Internet, ethernet local area networks, fixed-wireless access, wireless local area networks, WiMAX, etc.).

Chart 34 displays the subscriptions per 100 people for fixed broadband connections under the Current Path forecast and the Leapfrogging scenario. Malawi, like most low-income countries across Africa, has a very low fixed broadband at 2.3 subscriptions per 100 people in 2019. Under the Leapfrogging scenario, fixed broadband increases to 50 subscriptions per 100 people by 2043. This is 16.9 subscriptions more than under the Current Path forecast and slightly higher than the average for low-income African countries.

Mobile broadband refers to wireless Internet access delivered through cellular towers to computers and other digital devices.

Chart 35 displays subscriptions per 100 people for mobile broadband under the Current Path forecast and the Leapfrogging scenario. Malawi had a mobile broadband subscription rate of 42.8 people per 100 people in 2019, 19.9 subscriptions more than the average for low-income African countries. Under the Leapfrogging scenario, mobile broadband is projected to increase to 138.8 subscriptions per 100 people by 2043. This is 2.5 subscriptions more than the Current Path forecast.

Chart 36A and Chart 36B display the impact of the Leapfrogging scenario on electricity access for Malawi’s population. Only 2.9 million of the 18.6 million people living in Malawi had access to electricity in 2019. Under the Current Path forecast, it is projected that 60.4% of Malawi’s population will have access to electricity by 2043, translating to 19 million people. Under the Leapfrogging scenario, electricity access is projected to reach 78.6% by 2043, resulting in 24.7 million people with electricity access. The projection indicates that rural population electricity access will increase from a mere 9.6% in 2019 to 76.2% by 2043, 21.9 percentage points higher than under the Current Path forecast. For populations living in urban spaces, it is projected that under the Leapfrogging scenario, electricity access will increase from 45.1% in 2019 to 86.5% by 2043. The average electricity access for low-income African countries was 16.6% higher than Malawi in 2019, but under the Leapfrogging scenario, it is expected that Malawi will surpass the average of low-income African countries by 2041.

Chart 37 displays the GDP per capita for Malawi under the Current Path forecast and the Leapfrogging scenario. The GDP per capita is expected to increase to US$4 033 under the Current Path forecast and US$4 582 under the Leapfrogging scenario. The Leapfrogging scenario will result in a higher GDP per capita by 2043 compared to the average for low-income countries in Africa.

The charts display the number [Chart 38A] and the percentage [Chart 38B] of people living below the poverty line for both the Current Path forecast and the Leapfrogging scenario. It is projected that the Leapfrogging scenario will reduce extreme poverty in Malawi and that by 2043, 12.1% of people will live below the poverty line relative to 15.4% in the Current Path forecast. The Leapfrogging scenario has the potential to reduce extreme poverty from 12.43 million people in 2019 to 3.8 million by 2043, an improvement of 8.6 million.

Free Trade scenario

Free Trade scenario

The Free Trade scenario represents the impact of the full implementation of the African Continental Free Trade Area (AfCFTA) by 2034 through increases in exports, improved productivity and increased trade and economic freedom.

The intervention is explained in here in the thematic part of the website.

Chart 39 displays the trade balance as a per cent of GDP for the Current Path forecast and the Free Trade scenario. Malawi’s trade deficit in 2019 stood at 20.8% of GDP. Under the Free Trade scenario, this is expected to deteriorate to -39.2% by 2033 before improving to -19.4% by 2043. The implementation of the AfCFTA improves the short-term trade deficit in the Free Trade scenario compared to the Current Path forecast. By 2043, the trade deficit is expected to be less for the Current Path forecast at -15.4%.

Chart 40 displays the GDP per capita for Malawi under a Current Path forecast and the Free Trade scenario. The GDP per capita is expected to increase to US$4 033 under the Current Path forecast and US$4 857 under the Free Trade scenario. The Free Trade scenario will result in a higher GDP per capita by 2043 compared to the average for low-income countries in Africa.

The charts display the number [Chart 41A] and the percentage [Chart 41B] of people living below the poverty line for both the Current Path forecast and the Free Trade scenario. Under the Free Trade scenario, extreme poverty is expected to decrease more rapidly than under the Current Path forecast. By 2043, 7.8% of people will live below the poverty line under the Free Trade scenario, compared to 15.4% under the Current Path forecast.

Financial Flows scenario

Financial Flows scenario

The Financial Flows scenario represents a reasonable but ambitious increase in worker remittances and aid flows to poor countries, increase in the stock of foreign direct investment (FDI) and additional portfolio investment inflows. We also reduced outward financial flows to emulate a reduction in illicit financial outflows.

The intervention is explained in here in the thematic part of the website.

Chart 42 displays the foreign aid flows as a per cent of GDP for the Current Path forecast and the Financial Flows scenario. Foreign aid as a percentage of GDP was high in Malawi at 24.2% in 2019, compared to an average of 8.6% for low-income countries across Africa. Foreign aid flows are projected to decrease until 2043 in both scenarios resulting in 12.3% under the Financial Flows scenario, compared to 11.9% for the Current Path forecast.

Chart 43 displays the foreign direct investment (FDI) inflows as a per cent of GDP for the Current Path and the Financial Flows scenarios. FDI flows to Malawi was 4.4% of GDP in 2019, 0.16 percentage points higher than the average of low-income countries in Africa. The impact of COVID-19 on FDI flows can be observed with a sharp decrease to 1.98% in 2020. In the Financial Flows scenario, FDI inflows increase from 2024 onwards and represent 6.8% of GDP by 2043, compared to the Current Path forecast at 6.2% of GDP in the same time period.

The charts display remittance in billions of dollars [Chart 44A] and per cent [Chart 44B] of GDP for the Current Path forecast and the Financial Flows scenario. In 2019, the remittance flows to Malawi amounted to 0.1% of GDP. It is projected that under both scenarios, the remittance as a per cent of GDP will decline to 0.05% for the Current Path forecast and 0.08% for the Financial Flows scenario. However, in absolute terms, remittances will increase from US$10 million in 2019 to US$70 million by 2043 under the Financial Flows scenario, US$30 million more than in the Current Path forecast.

Chart 45 displays the GDP per capita for Malawi under the Current Path forecast and the Financial Flows scenario. The GDP per capita is expected to increase to US$4 033 under the Current Path and US$4 299 in the Financial Flows scenario. The Financial Flows and Current Path scenarios will result in a higher GDP per capita by 2043 compared to the average for low-income countries in Africa.

The charts display the number [Chart 46A] and the percentage [Chart 46B] of people living below the poverty line for both the Current Path forecast and the Financial Flows scenario. Extreme poverty in Malawi under the Financial Flows scenario will decrease to about 12.8% of the population relative to 15.4% in the Current Path forecast.

Infrastructure scenario

Infrastructure scenario

The Infrastructure scenario represents a reasonable but ambitious increase in infrastructure spending across Africa, focusing on basic infrastructure (roads, water, sanitation, electricity access and ICT) in low-income countries and increasing emphasis on advanced infrastructure (such as ports, airports, railway and electricity generation) in higher-income countries.

Note that health and sanitation infrastructure is included as part of the Health/WaSH scenario and that ICT infrastructure and more rapid uptake of renewables is part of the Leapfrogging scenario. The interventions there push directly on outcomes, whereas those modelled in this scenario increase infrastructure spending, indirectly boosting other forms of infrastructure, including that supporting health, sanitation and ICT.

The intervention is explained in here in the thematic part of the website.

Chart 47A and Chart 47B display the impact of the Infrastructure scenario on electricity access for Malawi’s population. Only 2.9 million of the 18.6 million people living in Malawi in 2019 had access to electricity. Under the Current Path forecast, it is projected that 60.4% of Malawi’s population will have access to electricity by 2043, translating to 19 million people. Under the Infrastructure scenario, electricity access is projected to reach 63.5% by 2043 resulting in 20 million people with electricity access. In this scenario, rural electricity access will increase from a mere 9.6% in 2019 to 57.8% by 2043, 3.5% higher than under the Current Path forecast. For populations living in urban spaces, electricity access will increase from 45.1% in 2019 to 82.6% by 2043.

Indicator 9.1.1. in the Sustainable Development Goals refers to the proportion of the rural population who live within 2 km of an all-season road and is captured in the Rural Access Index.

Chart 48 displays the per cent of rural populations within a 2 km access to an all-season (all-weather) road. Measuring rural accessibility is a very important development indicator. There is a strong link between investing in rural access roads and positive socio-economic impacts such as improving rural income, reducing poverty, reducing maternal deaths, improving paediatric health and increased agricultural productivity. 48.2% of Malawi’s rural population has access to an all-weather road, compared to an average of 43% for low-income countries in Africa. The Infrastructure scenario will positively influence rural accessibility and by 2043 it is projected that 61.7% of the rural population will have access to an all-weather road, compared to 58.1% for the Current Path forecast.

Chart 49 displays the GDP per capita for Malawi under the Current Path forecast and the Infrastructure scenario. GDP per capita is expected to increase to US$4 033 under the Current Path forecast and US$4 248 under the Infrastructure scenario. The Infrastructure scenario and the Current Path forecast will both result in a higher GDP per capita by 2043, compared to the average for low-income countries in Africa.

The charts display the number [Chart 50A] and the percentage [Chart 50B] of people living below the poverty line for both the Current Path forecast and the Infrastructure scenario. Under the Infrastructure scenario, it is projected that extreme poverty in Malawi will decrease and that 14% of the population will live below the poverty line, compared to 15.4% under the Current Path forecast.

Governance scenario

Governance scenario

The Governance scenario represents a reasonable but ambitious improvement in accountability and reduces corruption and, hence, improves the quality of service delivery by government.

The intervention is explained in here in the thematic part of the website.

As defined by the World Bank, government effectiveness ‘captures perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government’s commitment to such policies’.

Chart 51 displays the government effectiveness quality score for Malawi compared to low-income countries in Africa under the Current Path forecast and the Governance scenario. For both scenarios, the government effectiveness score is projected to increase and remain higher than the average of low-income countries in Africa.

Chart 52 displays the GDP per capita for Malawi under the Current Path forecast and the Governance scenario. The GDP per capita is expected to increase to US$4 033 under the Current Path forecast and US$4 210 under the Governance scenario. Both the Governance and the Current Path forecast will result in a higher GDP per capita by 2043, compared to the average for low-income countries in Africa.

The two charts display the number [Chart 53A] and the percentage [Chart 53B] of people living below the poverty line for both the Current Path forecast and the Governance scenario. The Governance scenario will alleviate poverty by 2043 by 1.4 percentage points compared to the Current Path forecast. Under this scenario, 4.4 million (14.1%) people will live in poverty by 2043, down from 12.4 million people in 2019.

Impact of scenarios on carbon emissions

Impact of scenarios on carbon emissions

This section presents projections for carbon emissions in the Current Path for Malawi and the 11 scenarios. Note that IFs uses carbon equivalents rather than CO2 equivalents.

Chart 54 displays projected tons of carbon emission for Malawi under the various intervention scenarios. Malawi’s carbon emissions are projected to increase most under the Agenda 2063 scenario which combines all the sectoral scenarios. Malawi will emit an additional 13 million tons of carbon by 2043 compared to 2019. By 2043, it is forecast that the Agenda 2063 scenario will record an additional 6.5 million tons of carbon above the Current Path forecast. This is the result of aggressive economic growth and an increase in demand for energy. The Free Trade scenario is projected to have the second biggest impact on carbon emissions by 2043, resulting in additional emissions of 1.3 million tons of carbon above the Current Path forecast.

Combined Agenda 2063 scenario

Combined Agenda 2063 scenario

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The Combined Agenda 2063 scenario consists of the combination of all 11 sectoral scenarios presented above, namely the Stability, Demographics, Health/WaSH, Agriculture, Education, Manufacturing/Transfers, Leapfrogging, Free Trade, Financial Flows, Infrastructure and Governance scenarios. The cumulative impact of better education, health, infrastructure, etc. means that countries get an additional benefit in the integrated IFs forecasting platform that we refer to as the synergistic effect. Chart 55 presents the contribution of each of these 12 components to GDP per capita in the Combined Agenda 2063 scenario.

Chart 55 illustrates the synergistic effect of the impact of the Combined Agenda 2063 on GDP per capita. The synergistic effect of an Agenda 2063 scenario could add as much as US$1 748 and result in a US$9 482 GDP per capita by 2043.

Chart 55 presents a stacked area graph on the contribution of each scenario to GDP per capita as well as the additional benefit or synergistic effect, whereas Chart 56 presents only the GDP per capita in the Current Path forecast and the Combined Agenda 2063 scenario.

The GDP per capita is expected to increase to US$4 033 under the Current Path forecast and US$9 482 under the Agenda 2063 scenario. It is expected that under the Agenda 2063 scenario, Malawi will overtake the average per capita income of low-income countries by 2036.

See Chart 8 to view the Current Path forecast of the sectoral composition of the economy.

Chart 57A and Chart 57B display both the number of poor people and the percentage of poor populations living below the US$1.90 extreme poverty line for both the Agenda 2063 scenario and the Current Path forecast. Under the Agenda 2063 scenario, extreme poverty in Malawi will decrease drastically, and by 2043, only 0.05% of the population will live below the poverty line, against 15.4% in the Current Path forecast. Under the Combined  Agenda 2063 scenario, it is forecast that extreme poverty will effectively be eradicated by 2038 as the per cent of the population in extreme poverty drops below 3%.

See Chart 8 to view the Current Path forecast of the sectoral composition of the economy.

Chart 58A displays the percentage point difference and Chart 58B displays the value difference between the Current Path forecast and the Agenda 2063 scenario. Under the Agenda 2063 scenario, the services and the information communication technology (ICT) sectors will be the greatest contributors to GDP. The services sector will contribute 3 percentage points more to GDP in the Agenda 2063 scenario compared to the Current Path forecast, equivalent to a difference of US$71.7 billion by 2043, and ICT will contribute 1.2 percentage points more, which will translate to a value of US$8.1 billion by 2043. Manufacturing and Agriculture will contribute 1.2 and 2.2 percentage points less, respectively, to GDP under the Agenda 2063 scenario.

Chart 59 displays the projected GDP at market exchange rate (MER) from 2019 to 2043 using 2017 exchange rates for both the Agenda 2063 scenario and the Current Path forecast. Malawi’s GDP is forecast to grow substantially to US$192.9 billion by 2043, compared to US$78.8 under the Current Path forecast in the same time period.

Chart 60 displays projected tons of carbon emission for Malawi under the Agenda 2063 scenario and the Current Path forecast. In 2019, Malawi’s carbon emissions were 0.7 million tons and it is projected to increase to 13.8 million tons of carbon by 2043 under the Agenda 2063 scenario. This increase is double what is projected under the Current Path forecast at 6.5 million tons of carbon, the result of an aggressive economic growth agenda and an increase in demand for energy.

Endnotes

  1. EM-DAT, the International Disaster Database. CRED/UCLouvain 2020.

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Cite this research

Alize le Roux (2022) Malawi. Published online at futures.issafrica.org. Retrieved from https://futures.issafrica.org/geographic/countries/malawi/ [Online Resource] Updated 24 August 2022.