Malawi

The eight sectoral scenarios as well as their relationship to the Current Path and the Combined scenario are explained in the About Page. Chart 10 summarises the approach.

Chart 11 presents the mortality distribution in the Current Path for 2023 and 2043.

The Demographics and Health scenario envisions ambitious improvements in child and maternal mortality rates, enhanced access to modern contraception, and decreased mortality from communicable diseases (e.g., AIDS, diarrhoea, malaria, respiratory infections) and non-communicable diseases (e.g., diabetes) alongside advancements in safe water access and sanitation. This scenario assumes a swift demographic transition supported by heightened investments in health and water, sanitation, and hygiene (WaSH) infrastructure.

Visit the themes on Demographics and Health/WaSH for more detail on the scenario structure and interventions.

Malawi's health sector has faced significant challenges that hinder human capital development. Persistent malnutrition has negatively impacted cognitive and physical growth, while poor infrastructure and limited access to quality healthcare have worsened disease burdens. Although progress has been made, these issues continue to affect health outcomes, labour productivity and educational achievements, slowing socio-economic advancement.

Since the outbreak of the COVID-19 pandemic in 2020, Malawi has encountered a series of crises that have further strained its health sector. The most severe cholera outbreak in its history occurred between 2022 and 2023, placing immense pressure on already limited healthcare resources and exposing the vulnerability of the country’s health infrastructure to external shocks.

Despite substantial investments in Malawi’s health sector, the country consistently falls short of the Abuja Declaration's target of allocating 15% of the budget to health. In 2023, the country’s health expenditure measured 8.5% of the National budget (MK 328 billion). In 2024, the government allocated 9.2% of the national budget (MK 550 billion), the second-largest budget after education (14.6%).

In 2024/25, per capita health spending was estimated at US$16, rising to US$40 with donor and private contributions. However, this remains far below the Health Sector Strategic Plan (HSSP III) target of US$78.7 and the WHO-recommended minimum of US$86. Persistent funding gaps, fiscal deficits and debt continue to hinder health sector improvements, progress towards achieving universal health coverage and broader economic growth.

Malawi is projected to undergo its epidemiological transition in 2037, the point at which deaths from non-communicable diseases (NCDs) surpass those from communicable diseases. The country will face a double burden of disease, as an increasing prevalence of NCDs demands more complex and costly care, further straining the national health budget.

In 2023, NCDs accounted for 38% of all deaths in Malawi. This share is expected to rise significantly, reaching 53% by 2043. Meanwhile, communicable diseases, which were responsible for 56% of deaths in 2023, are projected to decline to 39% over the same period.

Among the leading causes of death, cardiovascular diseases ranked second in 2023, accounting for 13% of all deaths. By 2043, they are expected to become the leading cause, rising to 18% of total deaths. Malignant neoplasms, which relate to deaths caused by cancers, were responsible for 9% of deaths in 2023 and are forecast to increase to 14% by 2043, making them the second leading cause of death.

These trends highlight the urgent need for Malawi to adapt its health systems and policies to address the growing challenge of chronic diseases alongside persistent infectious disease burdens.

Chart 12 presents the infant mortality rate in the Current Path and in the Demographics and Health scenario, from 2020 to 2043.

The infant mortality rate is the probability of a child born in a specific year dying before reaching the age of one. It measures the child-born survival rate and reflects the social, economic and environmental conditions in which children live, including their health care. It is measured as the number of infant deaths per 1 000 live births and is an important marker of the overall quality of the health system in a country.

The infant mortality rate remains a significant concern, with 40 deaths per 1 000 live births. Neonatal mortality accounts for 21 deaths per 1 000 live births. In the Demographics and Health scenario, improvements in basic healthcare will reduce infant mortality to 19 deaths per 1 000 live births by 2043, in contrast to the 30 deaths forecasted under the Current Path. Additionally, neonatal mortality is expected to decrease from 16 to 10 deaths per 1 000 live births in the Demographics and Health scenario.

Maternal health outcomes are similarly alarming, with the maternal mortality ratio at 157 deaths per 100 000 live births—well above the Southern African Development Community (SADC) average of 305 and far from the Sustainable Development Goal (SDG) target of fewer than 70 deaths per 100 000 by 2030. In the Demographics and Health scenario, this number is reduced to 76 deaths per 100 000 live births. Compounding these challenges is Malawi’s high fertility rate of 3.7 children per fertile woman, which exceeds the replacement rate of 2.1 and further strains healthcare resources. Addressing these persistent issues requires a coordinated, multisectoral approach to tackle the underlying social, economic and structural determinants of poor health outcomes.

Chart 13 presents the demographic dividend in the Current Path and in the Demographics and Health scenario, from 2020 to 2043.

The dividend is the window of economic growth opportunity that opens when the ratio of working-age persons to dependants increases to 1.7 to 1 and higher.

An increase in the working-age population relative to dependants (children and elderly people) can generate economic growth due to the resultant demographic dividend. When there are fewer dependants to take care of, it frees up resources for investment in both physical and human capital formation and eventually increases female labour force participation. Studies have shown that about one-third of economic growth during the East Asia economic miracle can be attributed to the large worker bulge and the relatively small number of dependants. However, the growth in the working-age population relative to dependants does not automatically translate into rapid economic growth unless the labour force acquires the needed skills and is absorbed by the labour market. Without sufficient education and employment generation to successfully harness their productive power, the growing labour force (very likely in urban areas) could result in the emergence of civil instability as many people of working age may remain unemployed and in poverty, potentially creating frustration, social tension and conflict. 

Generally, the demographic dividend materialises when a country reaches a ratio of at least 1.7 working-age people for each dependant (children and elderly people). The projected increase in Malawi’s working-age population cohort (between 15 and 64 years) could allow Malawi to reach its demographic dividend by 2041. Health and population interventions in the Demographics and Health scenario allow Malawi to benefit from this potential dividend by as early as 2035.

Malawi needs to sustain its momentum in reducing fertility rates and invest in education to empower this future workforce with appropriate skills. Without sufficient employment opportunities and a responsive governance system, Malawi’s large youth bulge could threaten stability.

Chart 14 presents crop production and demand in the Current Path from 1990 to 2043.

The Agriculture scenario envisions an agricultural revolution that ensures food security through ambitious yet feasible increases in yields per hectare, thanks to improved management, seed, fertiliser technology, and expanded irrigation. Efforts to reduce food loss and waste are emphasised, with increased calorie consumption as an indicator of self-sufficiency and prioritising it over food exports. Additionally, enhanced forest protection signifies a commitment to sustainable land use practices.

Visit the theme on Agriculture for our conceptualisation and details on the scenario structure and interventions.

Agriculture is the backbone of Malawi’s economy, employing over two-thirds of the population and contributing nearly a quarter of the country’s GDP. The sector is dominated by smallholder farmers, with 76% cultivating plots smaller than one hectare.

The government has introduced several initiatives to modernise agriculture and enhance resilience, including crop diversification, climate-smart agriculture techniques and irrigation expansion to reduce dependence on rain-fed farming. Smallholder farmers have received support through improved access to credit, modern seeds, fertilisers and extension services. While these interventions have led to some productivity gains, major obstacles persist. Many farmers still rely on outdated farming techniques and lack access to modern technology, mechanisation and well-developed markets. Poor rural infrastructure further restricts access to supply chains, limiting the sector’s growth potential.

Additionally, the high dependence on rain-fed agriculture makes the sector increasingly susceptible to climate shocks, exacerbating food insecurity. Malawi's susceptibility to climate change is highlighted by the Notre Dame Global Adaptation Initiative (ND-GAIN) Index in 2021, scoring 37.6 out of 100 and ranking 161st out of 185 countries globally. Between 2010 and 2023, Malawi faced 17 significant floods, a landslide triggered by heavy rainfall, five major storms and three intense droughts. In March 2023, Cyclone Freddy caused extensive damage, destroying homes and infrastructure and leading to substantial losses of crops and livestock. The cyclone resulted in widespread flooding, 1 200 fatalities, and the displacement of over 600 000 people nationwide. This disaster severely impacted the agricultural sector, with more than 2 million farmers losing over 170 000  hectares of land and an estimated 1.4 million livestock lost. In 2024, the situation was exacerbated by an El Niño-induced drought, which led to a significant decline in maize production. The drought resulted in a forecasted 22.9% decrease in maize harvests compared to the five-year average, intensifying food insecurity in the region. These consecutive climatic shocks have highlighted Malawi's vulnerability to climate change, underscoring the need for enhanced resilience and adaptive strategies within the agricultural sector.

Malawi’s heavy reliance on agricultural imports also increases vulnerability to global supply chain disruptions and price volatility, further exacerbating domestic food insecurity. Rapid population growth and accelerating urbanisation are placing additional pressure on agricultural production and food systems.

Between May and September 2024, approximately 4.2 million people in Malawi faced acute food insecurity, classified by Integrated Food Security Phase Classification (IPC) Phase 3 or above (‘crisis’). An additional 6.7 million people were in IPC Phase 2 (‘stressed’). Although Malawi's crop production significantly increased from 5 million metric tons in 1990, future projections indicate that food demand will continue to outpace supply.

The Current Path projects agricultural crop demand to grow from 30.1 million metric tons in 2023 to 52.4 million by 2043.

In the Current Path, Yield per Hectare increased from 8.1 million tons per hectare to 10.5 million tons per hectare. Meanwhile, target interventions lead to 11.8 million tons per hectare in 2043 in the Agriculture scenario.

Chart 15 presents the import dependence in the Current Path and the Agriculture scenario, from 2020 to 2043.

Malawi’s agricultural sector heavily depends on imports, particularly for essential inputs such as fertilisers, seeds, pesticides and machinery. This dependence arises from limited domestic manufacturing capacity and the dominance of smallholder farming, which often lacks the economies of scale and infrastructure needed to support local production of agricultural inputs. High costs associated with importing these essential inputs place a significant financial burden on farmers and the government, further amplifying challenges in improving farm productivity and food security. Structural inefficiencies, lack of investment in local production capabilities and environmental vulnerabilities have compounded this reliance, making it a persistent issue for Malawi’s agricultural sector.

The Farm Input Subsidy Programme (FISP) was introduced in 2005/06 to boost food security, enabling smallholder farmers to purchase fertilisers and seeds at subsidised rates, significantly raising maize yields. Its early success in reducing hunger was offset by criticisms regarding high fiscal costs, administrative inefficiencies and dependence on imported inputs. To streamline the programme and extend subsidised inputs to a broader population segment, the government launched the Affordable Inputs Programme (AIP) in the 2020/21 season. Much like its predecessor, AIP aims to reduce the cost of fertilisers and seeds for smallholder farmers—still the backbone of Malawi’s agricultural sector. Nonetheless, it faces similar hurdles, including reliance on foreign fertiliser supplies, logistical challenges in voucher distribution and fluctuating budgetary allocations. Recent policy discussions and research continue to assess whether further reforms could improve the programmes’ cost-effectiveness.

The Current Path indicates that Malawi’s reliance on agricultural imports will increase to 21.6% of domestic demand by 2043, reflecting growing exposure to global market fluctuations, supply chain disruptions and price volatility. In contrast, the Agriculture scenario, which prioritises enhanced domestic production and self-sufficiency, substantially reduces import reliance to just 11.3% of domestic demand. 

Chart 16 depicts the progress through the educational system in the Current Path, for 2023 and 2043.

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

Visit the theme on Education for our conceptualisation and details on the scenario structure and interventions.

Malawi faces persistent challenges in education enrolment, particularly beyond the primary level. While primary school enrolment has improved, transitioning to secondary and tertiary education remains a major obstacle due to widespread poverty and geographical disparities in access to quality education. Gender disparities persist, with higher dropout rates among female students driven by socio-economic pressures and cultural expectations.

Underfunding remains a major barrier to education sector reform. According to the 2024 Education Sector Report, Malawi allocated 4% of its GDP to education, falling below the regional average of 4.6%, while Official Development Assistance (ODA) dropped by 9% between 2023 and 2024. These funding constraints limit efforts to improve infrastructure, access and overall education quality, underscoring the need for greater investment and policy commitment from the government and development partners.

Malawi’s primary education system is predominantly public, with 83% of schools government-run. The total number of schools grew by 10% between 2020 and 2024, reaching 7 117 in 2024, with most growth driven by private institutions. However, 34% (4 718 schools) remain inaccessible during the rainy season, highlighting infrastructure deficits. Additionally, digital education remains extremely limited, with only 2% of schools offering ICT lessons and 3% having internet connectivity.

Despite these challenges, education efficiency is improving. The gross enrolment rate will decline from 142.3% in 2023 to 123.9% in 2043, while the net enrolment rate will increase from 88.1% to 93%. These shifts indicate a reduction in over-age and under-age enrolments and improved access for school-age children. Primary school completion rates will rise from 68% in 2023 to 85.2% in 2043, marking a significant improvement in student retention.

Secondary education has expanded, but accessibility and completion rates remain major concerns. By 2024, 75% of secondary schools were public, while 25% were private, with the total number increasing to 1 916 schools. However, rural accessibility remains a challenge, with 263 schools inaccessible during the rainy season, compared to only 3 in urban areas and 46 in semi-urban areas.

Although secondary enrolment has increased, low completion rates, particularly at the upper-secondary level, highlight barriers such as poverty, inadequate infrastructure and socio-economic disparities. In 2024, 3.2% of secondary school students repeated classes, while the overall dropout rate was 4.3%. Female students were disproportionately affected, accounting for 60% of dropouts compared to 40% for males. Financial barriers, early marriages and long travel distances to schools remain the primary causes of dropout.

Higher education remains one of the weakest areas of Malawi’s education system. With a gross enrolment rate of just 2.1% in 2023, projected to rise to 10.2% by 2043, access remains among the lowest globally and regionally. Completion rates are similarly low, increasing modestly from 1.2% in 2023 to 5.5% in 2043.

Despite improvements in enrolment, the quality of education remains a significant concern, particularly in rural areas, where inadequate infrastructure, teacher shortages and limited learning materials hinder student progress. Malawi faces a learning crisis, with only 19% of children aged 7 to 14 demonstrating foundational reading skills and 13% achieving foundational numeracy skills. A key contributor to this challenge is the low attendance rate in Early Childhood Education (ECE), which stood at just 34% in 2023 and urban-rural disparities in teacher quality, infrastructure and access to schools.

Chart 17 presents the mean years of education in the Current Path and in the Education scenario, from 2020 to 2043, for the 15 to 24 age group.

The average years of education in the adult population aged 15 to 24 is a good first indicator of how the stock of knowledge in society is changing.

Malawi’s mean years of education stood at 5.5 years in 2023, falling slightly below the 5.9-year average for low-income African countries and nearly two years below the continental average of 7.2 years. Under the Current Path, gradual progress is anticipated, with the mean years of education projected to increase to 6.1 years by 2043. In comparison, the Education scenario presents a more optimistic outlook, with the mean years of education expected to reach 6.8 years over the same period.

Despite these projections, significant challenges persist due to longstanding deficits in basic education. In 2023, the literacy rate for individuals aged 15 and older was only 64%, reflecting foundational gaps that extend into adulthood. These issues are further exacerbated by disparities in access to quality education, particularly in rural areas, where shortages of qualified teachers and inadequate infrastructure are most pronounced.

While teacher qualifications have improved, gaps remain in pedagogical skills and subject-specific expertise, particularly in underserved regions. Professional development programmes are not yet scaled to adequately address these deficiencies, and limited access to ICT resources hampers digital literacy, a critical skill for Malawi’s future workforce. Expanding and enhancing these areas is essential to bridging educational inequalities.

Efforts to strengthen education funding have shown progress, including a 33% increase in government funding for student loans between 2022 and 2024.

New technical colleges have expanded access to vocational training, an essential step towards addressing skills gaps. However, aligning education with labour market demands remains a pressing challenge. As of 2024, only 19% of graduates from Technical and Vocational Education and Training (TEVET) programs were employed, highlighting a significant disconnect between the skills provided by training programs and the needs of the labour market. Enrolment in technical colleges increased significantly from 5 599 in 2023 to 9 707 in 2024. Still, this growth has been undermined by resource constraints, including a student-to-qualified-instructor ratio of 40:1—twice the target of 20:1. To close this gap, substantial investments in training infrastructure, curriculum reform and stronger partnerships with industry are essential.

Chart 18 presents the value-add by sector as share of GDP in the Current Path, for 2023 and 2043.

In the Manufacturing scenario, reasonable but ambitious growth in manufacturing is envisaged through increased investment in the sector, research and development (R&D), and improved government regulation of businesses. This aims to enhance total labour

Visit the theme on Manufacturing for our conceptualisation and details on the scenario structure and interventions.

On the Current Path, the service sector will continue to have the largest share of GDP in 2043, accounting for 57.6%. Strengthening the digital economy is also essential for Malawi to boost growth and achieve its development objectives. Within this sector, the digital economy could be a significant growth driver by enhancing service delivery, streamlining manufacturing processes and fostering innovation. To realise this potential, Malawi will need to invest in robust digital infrastructure, expand connectivity in both urban and rural areas, and develop a digitally skilled workforce. Additionally, establishing an enabling regulatory framework and encouraging public-private partnerships will be essential to spur innovation and attract further investment in the digital space. Current Path forecasts that the ICT sector will account for 5.9% of GDP by 2043 and rise to 6.8% by 2063, making it the third-largest contributor after services and manufacturing.

Agriculture remains a vital pillar of Malawi’s economic development, underpinning the livelihoods of the majority of the labour force and supplying essential inputs to drive manufacturing growth. In doing so, agriculture stimulates demand in both the services and manufacturing sectors, serving as a cornerstone for broader economic progress. However, as Malawi advances towards a more diversified and industrialised economy, the agriculture sector’s share of GDP is expected to decline markedly—from 19.8% in 2023 to 10.7% by 2043 and further to 4.2% by 2063 (outpacing the set target of 8% in 2063).

The manufacturing sector, however, has experienced a steady decline in its GDP share since peaking at 19% in 1992, signalling deindustrialisation while the country remains in poverty. Despite various government initiatives aimed at revitalising industrial growth, the sector continues to perform poorly,  as elaborated on in the subsequent section.

Chart 19 presents the contribution of the manufacturing sector to GDP in the Current Path and in the Manufacturing scenario, from 2020 to 2043. The data is in US$ and % of GDP.

Malawi has long sought to industrialise and transform its economy from one reliant on agriculture and raw material exports to one driven by manufacturing and value addition. However, despite various policy interventions and development strategies, the country has struggled to achieve meaningful industrial growth due to structural constraints such as corruption, poor infrastructure, an unstable macroeconomic environment, lack of appropriate skills and limited export access. And while agro-processing remains a key priority, diversification into other emerging manufacturing sectors is crucial for reducing economic vulnerability.

The National Export Strategy II (NES II) 2021-2026 builds upon previous initiatives by prioritising export-oriented manufacturing, agro-processing and new cash crops such as industrial hemp and medical cannabis. This strategy is designed to shift Malawi from a factor-driven economy to an efficiency-driven one, reducing reliance on tobacco exports, which have declined in recent years. The National Industrial Policy (NIP) 2017-2021 aimed to stimulate manufacturing growth, encourage value addition and reduce dependence on raw material exports. However, its impact has been limited, with many underlying constraints—such as infrastructure gaps and weak investment—remaining unaddressed. To address these shortcomings, the NIP is currently undergoing a review to incorporate necessary reforms that align with Malawi’s long-term industrialisation and economic diversification goals.

On 2 February 2024, Malawi enacted the Investment and Export Promotion Act, which formally established the Malawi Investment and Trade Centre (MITC) to support investment and export activities in the country. The Act outlines the Centre's mandate, responsibilities and authority, including its role in registering investors and exporters, issuing investment certificates and providing facilitation services to businesses. Another major development in 2024 was the enactment of the Special Economic Zones (SEZ) Act, which aims to attract investment into dedicated industrial zones. SEZs are expected to provide tax incentives, improved infrastructure and streamlined regulations to enhance industrial production and exports. While this initiative holds promise, its success depends on the government's ability to provide reliable energy, transport and skilled labour—areas where Malawi still faces significant shortcomings.

In 2023, manufacturing contributed 12.3% to GDP, and while it will grow to 18.8% by 2043 in Current Path and will reach 20.4% in the Manufacturing scenario—exceeding the projected low-income African country average of 16.2%—it is still expected to fall short of the MW2063 target of 20% by 2042. The sector’s contribution to GDP will grow significantly, rising from US$1.3 billion in 2023 to US$5.4 billion by 2043 under the current trajectory. Under the Manufacturing scenario, which assumes targeted reforms and enhanced industrial growth, this figure could reach US$6.2 billion by 2043, representing 20.4% of GDP.

Chart 20 depicts exports and imports as a percentage of GDP, from 2000 to 2043, in the Current Path and in the AfCFTA scenario.

The AfCFTA scenario represents the impact of fully implementing the African Continental Free Trade Agreement by 2034. The scenario increases exports in manufacturing, agriculture, services, ICT, materials and energy exports. It also includes improved multifactor productivity growth from trade and reduced tariffs for all sectors.

Visit the theme on AfCFTA for our conceptualisation and details on the scenario structure and interventions.

Like many African countries, Malawi primarily exports raw agricultural products while importing manufactured goods. Limited progress in diversifying its export base has left the economy vulnerable to global commodity price fluctuations, destabilising government revenue and foreign exchange reserves and constraining inclusive growth and development. This reliance on agricultural exports also amplifies exposure to climate-related risks.

In 2023, tobacco dominated exports, contributing over 47% of total export revenue, followed by oil seeds and oleaginous fruits (11%), edible vegetables (10%), and coffee, tea and spices (8%). Belgium was Malawi’s export partner, accounting for 16% of exports, followed by Tanzania (11%), China (6%) and South Africa (5%).

On the import side, Malawi relies heavily on mineral fuels and refined oils, which accounted for 19% of total imports in 2023, reflecting the country’s significant energy needs. Fertilisers, essential to Malawi’s agriculture-driven economy, represented 11%, while machinery constituted 7%. Import partners include China (17%), South Africa (16%), the UAE (12%), India (7%) and Tanzania (7%).

In 2023, Malawi recorded a significant trade imbalance, with imports totalling US$4.6 billion and exports at US$2.4 billion. Projections along the Current Path indicate that, by 2043, imports will reach US$15.2 billion while exports are expected to grow to US$13.8 billion, narrowing but not eliminating the trade deficit.

Chart 21 presents the trade balance in the Current Path and in the AfCFTA scenario, from 2020 to 2043 as a percentage of GDP.

At the regional level, Malawi actively participates in integration initiatives through the Common Market for Eastern and Southern Africa (COMESA), the Southern Africa Development Community (SADC), the Tripartite Free Trade Area (TFTA) and the African Continental Free Trade Area (AfCFTA). These arrangements provide reciprocal market access based on specific rules of origin, enabling Malawi to expand its export footprint. Beyond market access, the RECs support collaborative regional projects in industrialisation, transport, energy, trade facilitation and other developmental infrastructure, addressing challenges typically faced by landlocked countries like Malawi.

Malawi maintains an open trade policy with relatively low tariffs and minimal non-tariff barriers, which aims to boost exports' contribution to Malawi’s economic and social transformation. In FY2023/24, the simple average applied Most Favored Nation (MFN) tariff was 12.7%, a rate that has remained stable since 2016. 

The trade balance, measured as a percentage of GDP, shows a gradual improvement under both the Current Path and the AfCFTA scenario. In 2023, Malawi’s trade deficit stood at -21.3% of GDP, and by 2043, the deficit will narrow to -5% in the Current Path. The AfCFTA scenario shows only a slight improvement, with the deficit projected to reach -4.9% in 2043, an increase of just 0.09 percentage points. The modest impact of the AfCFTA scenario on Malawi’s trade balance reflects several structural challenges. As a landlocked country, high transportation costs and limited connectivity constrain its ability to compete in regional and global markets. The economy’s reliance on primary agricultural exports, vulnerability to price volatility and climate risks, underdeveloped manufacturing base and inadequate infrastructure further restrict diversification.

Chart 22 presents the Current Path of access to electricity for urban, rural and the total population from 2000 to 2043.

The Large Infrastructure and Leapfrogging scenario involves ambitious investments in road and renewable energy infrastructure, improved electricity access and accelerated broadband connectivity. It emphasises adopting modern technologies to enhance government efficiency and incorporates significant investments in major infrastructure projects like rail, ports, and airports (other infra) while highlighting the positive impacts of renewables and ICT.

Visit the themes on Large Infrastructure and Leapfrogging for our conceptualisation and details on the scenario structure and interventions.

Malawi has the lowest national electricity access rate in the Southern African Development Community (SADC) and one of the lowest in the world. In 2023, only 13% of the country’s total population had access to electricity, compared to 38% for the average in low-income African countries and 46% for its global low-income peers. Even for those connected to the grid, electricity supply is highly unreliable. Malawi’s power generation is heavily dependent on hydroelectric power, which accounts for approximately 98% of the country’s electricity. This reliance on hydropower makes the energy sector extremely vulnerable to climatic variability, with droughts reducing water levels and rainy seasons causing silting—both disrupting electricity generation.

On the Current Path, Malawi’s electricity access rate will improve gradually, reaching 36% of the population by 2043 and 75% by 2063. While this represents significant progress, it still falls short of the ambitious MW2063 target of achieving universal electricity access. As expected, electricity access is heavily skewed towards urban centres, with 51% of the urban population compared to only 5% of the rural population having electricity in 2023. This gap will remain with the Current Path, forecasting 71% and 26% for urban and rural access, respectively.

In the Large Infrastructure and Leapfrogging scenario, Malawi leverages its significant solar potential by rapidly deploying photovoltaic systems, aided by declining technology costs. Wind power further diversifies the energy mix, while a small share of geothermal—though still in early exploration—offers future promise. Biomass projects also supplement supply, and regional integration ensures sufficient overall capacity. As a result, electricity access in this scenario increases by nine percentage points, reaching 45% in 2043. Electricity access in urban areas rises to 79%, while rural coverage expands to 34%.

Chart 23 presents the number of people using cookstoves in the Current Path and in the Large Infrastructure and Leapfrogging scenario, from 2020 to 2043.

Most households (more than 90%) in Malawi still rely on traditional and polluting fuels and technologies for cooking, with much of the wood fuel sourced unsustainably. Firewood and charcoal remain the primary cooking fuels in Malawi, with usage patterns differing between rural and urban areas. In rural regions, 90.9% of households rely on firewood for cooking, while only 18.9% of urban households use it. Conversely, charcoal is the dominant fuel in urban areas, utilised by approximately 75% of households compared to only 7.5% use among rural households.

Malawi's widespread reliance on charcoal and firewood is a major driver of deforestation and forest degradation, with far-reaching impacts on agricultural productivity and food and water security. This dependency also increases the country’s vulnerability to climate shocks. Additionally, using these traditional fuels generates household air pollution, posing serious health risks and exacerbating time poverty and productivity losses, particularly for women primarily responsible for fuel collection and cooking.

The World Bank estimates that Malawi's limited access to clean cooking solutions imposes a significant economic cost of approximately US$8.6 billion annually. Climate-related impacts account for US$0.9 billion, health-related costs for US$3.2 billion and productivity losses for women—primarily due to time poverty—amount to US$4.5 billion. Expanding access to clean cooking solutions is, therefore, a critical development priority, offering substantial benefits for the global climate, public health and gender equality. The World Bank’s Clean Cooking Planning Tool estimates that achieving the clean cooking targets outlined in Malawi’s Energy Compact will require an annual investment of approximately US$102.8 million. Of this, US$31.6 million will need to come from the public sector to address the affordability gap. The transition to clean cooking will deliver substantial benefits, with an estimated annual return of US$2.7 billion—equivalent to more than 26 times the total investment and 86 times the required public financing.

In the Current Path, reliance on traditional cookstoves will decrease from 86% in 2023 to 78% by 2043, reflecting incremental progress in improving energy access and transitioning to safer alternatives. The use of modern fuels for cooking will increase from 4% in 2023 to 15% in 2043. Under the Large Infrastructure and Leapfrogging scenario, Malawi significantly gains more in modernising cooking practices; traditional cookstoves will decline further to 73% in 2043, while the adoption of modern fuels will increase to 21%, highlighting the potential impact of targeted investments in infrastructure, energy access and clean cooking technologies.

While these projections indicate progress, reliance on biomass and traditional cookstoves will remain high, underscoring the need for accelerated efforts to expand energy access, promote clean cooking technologies and support behavioural change.

Chart 24 presents the percentage of the population and number of people with access to mobile and fixed broadband in the Current Path and in the Large Infrastructure and Leapfrogging scenario, from 2020 to 2043. The user can toggle between mobile and fixed broadband.

ICT is a critical enabler for achieving Malawi's development goals. It offers opportunities for economic diversification, reduces distance barriers and improves public service delivery and productivity. Enhanced access to broadband and ICT services can positively impact economic growth and poverty reduction by driving innovation and efficiency across sectors.

Mobile broadband is the primary means of internet access in Malawi, reflecting trends in other sub-Saharan African countries where limited fixed-line infrastructure and the high cost of fixed broadband services remain significant barriers.

Despite remaining below global benchmarks, Malawi’s mobile cellular subscription rate slightly exceeds the average for low-income African countries. In 2023, mobile subscriptions stood at 45 per 100 people, compared to the low-income African average of 36 per 100. The Current Path anticipates substantial growth, with subscriptions projected to reach 91 per 100 people by 2030, surpassing the government’s target of 80 per 100 people. By 2043, mobile subscriptions are expected to rise to 134 per 100 people, with a marginal increase to 135 per 100 people under the Large Infrastructure and Leapfrogging scenario.

Fixed broadband access, however, remains severely underdeveloped in Malawi. In 2023, there was only one fixed broadband subscription for every 100 people, which is below the low-income African average of 2 subscriptions per 100 people. The Current Path estimates that this number could rise to 15 subscriptions per 100 people by 2043. However, this would still fall short of the average projected for its income group, which is 19 per 100 people. In contrast, in the Large Infrastructure and Leapfrogging scenario, subscriptions could increase to 23 per 100 people, highlighting the potential for substantial progress through targeted investments.

Digital technologies are reshaping Africa’s economic landscape, driving financial inclusion, education and healthcare innovations. In Tanzania, internet expansion has contributed to a 7% decline in extreme poverty over three or more years, alongside an 8% increase in labour force participation and wage employment. However, digital access remains deeply unequal, particularly for women. In Eastern and Southern Africa, women have only a 34% chance of making or receiving a digital payment in a year, compared to 41% for men. Barriers such as affordability, literacy, ID requirements and online safety concerns hinder digital adoption among women and marginalised groups. Targeted initiatives are helping to bridge these gaps. In Uganda, a digital literacy program for women in refugee and host communities led to a fourfold increase in basic digital skills, with over 90% gaining control over digital devices and accessing new economic opportunities. In Ethiopia, over 900 000 poor households—43% led by women—received electronic financial benefits in 2023, while Mozambique saw a 121-fold increase in digital social protection payments for families in the poorest districts between 2021 and 2022.

Bridging the digital divide requires more than connectivity. Investment in digital skills, entrepreneurship and inclusive policies is essential to ensure that digitalisation translates into meaningful socio-economic gains. Governments and the private sector must prioritise these areas to harness digital transformation for sustainable and equitable growth.

Chart 25 presents the trends in FDI, aid and remittances in the Current Path and in the Financial Flows scenario as a percentage of GDP, from 1990 to 2043.

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

Visit the theme on Financial Flows for our conceptualisation and details on the scenario structure and interventions.

Malawi has historically been heavily dependent on foreign aid, with assistance levels often exceeding 20% of GDP—in the 1990s. Over time, the reliance on aid declined, dipping to near or below 10% of GDP in the 2020s.

Malawi’s status as a low-income nation with persistently high poverty rates has made it heavily dependent on foreign aid to address critical development and humanitarian challenges. In 2023, foreign aid constituted 11% of Malawi’s GDP—approximately US$1.4 billion—highlighting the country’s reliance on donor funding to sustain essential services in sectors such as health, education, food security and infrastructure. Although forecasts suggest a modest decline in aid dependency to 8.7% of GDP by 2043, the very foundations of Africa's traditional engagement with external support are shifting. This trend was underscored in early 2025 when, following an executive order on Reevaluating and Realigning United States Foreign Aid, the US government abruptly suspended its annual USAID support—representing more than 13% of Malawi’s budget. The consequences of this withdrawal have been immediate and severe, leading to disruptions in healthcare and education services, the suspension of HIV prevention medication programs, and the sudden loss of financial support for university students on US-funded scholarships. This development highlights the country’s ongoing vulnerability to shifts in foreign aid and underscores the urgent need for Malawi to accelerate efforts toward economic self-sufficiency and domestic revenue generation.

Malawi’s struggling economy, high poverty levels and lack of formal jobs have forced many people to leave in search of better opportunities. Over the past decade, remittances in Malawi have risen from 0.2% of GDP in 2013 to 1.3% in 2023—making them 6.5 times higher than they were a decade ago. Officials have noted that irregular migration from Malawi appears to be on the rise, with South Africa continuing to be the top destination. While exact deportation figures are unavailable, observations suggest that more Malawians are being sent back, likely due to South Africa’s stricter migration policies.

FDI inflows have been relatively modest as a proportion of GDP, showing some volatility with occasional spikes above 5%. Although Malawi's constitution provides protections for foreign investments, several challenges remain. Investors often encounter prolonged administrative processes when applying for business licences and permits. Other challenges limiting FDI inflows include infrastructure deficiencies, high transportation costs, shortage of skilled labour, low foreign exchange reserves and systemic corruption. In the Current Path, FDI as a share of GDP will rise from 1.8% in 2023 to 2.9% in 2043, signalling a slow but steady improvement in the country’s investment environment. Interventions from the Financial Flows scenario show a better trajectory that reaches 3.5% in 2043.

The Financial Flows scenario is a positive scenario that represents a reasonable but ambitious increase in inward flows of worker remittances, more aid and an increase in the stock of foreign direct investment (FDI) and additional portfolio investment inflows. We reduce outward financial flows to emulate a reduction in illicit financial outflows. The scenario is premised on a return to constitutionalism, which is very likely a precondition for a resumption of aid and FDI.

Chart 26 presents government revenue in the Current Path and in the Financial Flows scenario, from 2020 to 2043. The data is in US$ 2017 and % of GDP. 

Wagner's law, or the law of increasing state activity, states that public expenditure increases as national income rises. In the Financial Flows scenario, it is reasonable to expect that government revenues will increase as a percentage of GDP compared to the Current Path.

In the Current Path, government revenue will increase from 17.2% of GDP in 2023 to 20.7% in 2043. In the Financial Flows scenario, revenue will reach 22% in 2043. This growth reflects a positive association between capital inflows, such as foreign aid and FDI, and government revenue, driven by increased public services, tax compliance and economic growth fueled by higher external investments. An inflow of capital into Malawi raises the potential tax which can be collected, as foreign investors are usually more tax-compliant. For Malawi to fully benefit from its revenue potential, strengthening tax collection systems is essential. Despite efforts to boost domestic resource mobilisation, the country continues to struggle with low tax revenue. In 2023, Malawi’s tax-to-GDP ratio stood at 12.5%, falling below international benchmarks. The World Bank considers a 15% tax-to-GDP ratio the minimum needed to fund essential public services, while the UN estimates that developing countries must reach at least 20% to meet the Sustainable Development Goals (SDGs) by 2030.

Several factors contribute to Malawi’s low tax revenue. Weak tax administration, a narrow tax base and widespread tax evasion hinder collection efforts. Additionally, the country’s large informal sector—dominated by small, unregistered businesses—operates outside the formal tax system, making it difficult to expand the revenue base.

Chart 27 presents the Current Path of government effectiveness comparing the country to the average for the African income group, from 2002 to 2043.

The World Bank’s index on 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.

Good governance is paramount in the development process. Strengthening governance measures can accelerate poverty reduction and boost macroeconomic outcomes. A 2022 IMF study found that the governance dividend for the average sub-Saharan African country would be two to three times larger than the rest of the world. The study further reveals that poor governance and higher corruption are associated with lower growth, worsened fiscal performance, higher inflation and lower levels of development in sub-Saharan Africa.

Malawi has experienced a steady decline over the past decade but has remained above the average for its peers. In 2023, Malawi achieved a score of 1.7, compared to the peer group average of 1.4. On the Current Path trajectory, Malawi will improve further, maintaining its position above the regional average. By 2043, the country’s score will rise to 2, ranking 8th out of 22 low-income African nations.

In the lead-up to Malawi’s 2025 elections, political dynamics have intensified, shaping governance decisions and public discourse. Earlier, in August 2024, President Lazarus Chakwera secured his party’s nomination for a second term, while the Democratic Progressive Party (DPP) endorsed former President Peter Mutharika as its candidate for the 2025 presidential race, setting the stage for a highly competitive election.

In January 2025, President Lazarus Chakwera reshuffled his cabinet, dismissing two ministers and appointing three new ones. The move was widely seen as both an attempt to address governance challenges and a strategic effort to strengthen his administration ahead of the elections. Amid these developments, Minister of Justice Titus Mvalo reaffirmed the government’s commitment to governance reforms, accountability and access to justice in January 2025. He emphasised these principles as essential for Malawi’s long-term prosperity and self-reliance, reinforcing the administration’s pledge to address ongoing concerns.

Chart 28 presents the security, capacity and inclusion index for the Current Path versus the Governance scenario, for 2023 and 2043.

This scenario assumes better governance: stability, capacity, and inclusion. It measures a state’s progress using the average of these three indices. To this end, it includes an index (0 to 1) for each dimension, with higher scores indicating improved outcomes. Participation rates, particularly among females, were appropriate.

Note that the scenario includes increased welfare transfers to unskilled workers, which are paid for by taxes on skilled workers. Note: the two should roughly balance one another in US$ terms. In the context of high poverty levels and inequality, social transfers have proven to be the most effective short- and medium-term measures for alleviating both.

Visit the theme on Governance for a full conceptualisation and details on the scenario structure and interventions.

In 2023, Malawi ranked 10th out of 22 low-income African countries based on its total governance index score. Specifically, the country placed 5th in security, 8th in inclusion and 15th in governance capacity.

Malawi ranks relatively high in security among low-income African countries, reflecting its long-standing peace and absence of large-scale conflict. The state maintains a monopoly on force, and political violence is generally limited to election periods or specific protests. However, structural vulnerabilities remain. Climate change-induced disasters, such as floods and droughts, threaten stability by exacerbating food insecurity and straining public resources. Additionally, weak law enforcement capacity makes Malawi susceptible to transnational threats, including smuggling, human trafficking and organised crime.

While Malawi is not engaged in active regional conflicts, instability in neighbouring Mozambique, particularly in Cabo Delgado, could lead to security spillovers, such as refugee movements or transnational criminal activity. The unresolved border dispute with Tanzania over Lake Malawi remains another long-term source of tension, though it has not escalated into open conflict. Beyond its immediate neighbours, the conflict between Rwanda and DR Congo has intensified instability in the Great Lakes region, disrupting regional trade and investment, potential increases in refugee flows, and the risks of transnational organised crime linked to illicit trade and human trafficking could pose long-term security challenges. Sustained governance improvements and investment in security sector capacity will be critical to maintaining and enhancing Malawi’s stability.

Malawi's position in governance inclusion reflects moderate performance in political participation, civil liberties and gender representation. The country has a vibrant civil society, with active non-governmental organisations and faith-based groups influencing policy and governance. However, political inclusion remains constrained by weak decentralisation, elite-driven politics and limited representation of women in decision-making roles. While legal frameworks exist to promote gender equity and participation, their enforcement remains inconsistent. Economic exclusion, driven by widespread poverty and regional inequalities, also limits broader participation in governance. Strengthening local governance and ensuring more equitable political representation will be key to improving inclusion.

Weak institutional capacity and bureaucratic inefficiencies lead to mismanagement of funds, delays in service delivery and ineffective policy implementation. Corruption further exacerbates these issues by diverting resources from critical sectors like infrastructure, healthcare and education, deepening socio-economic disparities. Additionally, the lack of transparency and accountability weakens public trust in government institutions, while the unpredictable regulatory environment discourages both domestic and foreign investors, limiting economic growth and development. Corruption remains one of the most pressing challenges in Malawi, contributing to deepening inequalities and eroding public trust in institutions. Despite ongoing policy efforts, such as the National Anti-Corruption Strategy II (2019–2024), corruption continues to hinder economic growth and governance structures. High-profile scandals involving senior politicians and civil servants, including the 2022 arrest of the director of the Anti-Corruption Bureau, have shaken Malawi in recent years. In Transparency International’s 2024 Corruption Perceptions Index, Malawi ranked 107th out of 180 countries. Fiscal constraints further undermine state capacity, with heavy reliance on donor funding affecting policy autonomy. Long-term improvements will require sustained investment in institutional reforms, human capital development and public sector accountability.

Malawi’s governance performance will improve significantly over the coming decades, with its overall score projected to rise from 0.48 in 2023 to 0.55 by 2043 under the Current Path. However, under the Governance scenario, where institutional reforms and policy effectiveness are strengthened, Malawi could achieve a higher score of 0.62 by 2043. Progress is expected to be particularly strong in security and inclusion. However, governance capacity remains a key challenge. In 2043, security improves from 0.74 in the Current Path to 0.82. Inclusion increases from 0.59 to 0.69. Governance capacity, while still low, sees a modest increase from 0.29 to 0.34.