Flashmag Digizine Edition Issue 110 October 2020 - Page 122

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the votes. President Lazarus Chakwera and Vice President Saulos Chilima lead a coalition of nine political parties.

More than half of the population lives below the poverty line, dependent primarily on subsistence agriculture. Tobacco, tea, and sugar are important exports. A border dispute with Tanzania centers on Lake Malawi and its potentially large oil and gas reserves.

Located in Southern Africa, Malawi is landlocked, sharing its borders with Mozambique, Zambia and Tanzania. The country has an estimated population of 18.6 million (2019), which is expected to double by 2038.

Malawi's most important export crop is tobacco, which accounted for a third (30%) of export revenue in 2012.[14] In 2000, the country was the tenth-largest producer in the world. The country's heavy reliance on tobacco places a heavy burden on the economy as world prices decline and the international community increases pressure to limit tobacco production. Malawi's dependence on tobacco is growing, with the product jumping from 53% to 70% of export revenues between 2007 and 2008.

The country also relies heavily on tea, sugarcane and coffee, with these three plus tobacco making up more than 90% of Malawi's export revenue. Tea was first introduced in 1878. Most of it is grown in Mulanje and Thyolo. Other crops include cotton, corn, potatoes, sorghum, cattle and goats. Tobacco and sugar processing are notable secondary industries.

Traditionally Malawi has been self-sufficient in its staple food, maize (corn), and during the 1980s it exported substantial quantities to its drought-stricken neighbors. Nearly 90% of the population engages in subsistence farming. Smallholder farmers produce a variety of crops, including maize, beans, rice, cassava, tobacco, and groundnuts (peanuts). Financial wealth is generally concentrated in the hands of a small elite. Malawi's manufacturing industries are situated around the city of Blantyre.

Lake Malawi and Lake Chilwa provide most of the fish for the region. For many Malawians, fish is the most important source of proteins. Dried fish is not only consumed locally, but also exported to neighboring countries. Most fishing is done on small scale by hand. However, Maldeco Fisheries owns several commercial fishing boats and operates fish farms in the southern part of Lake Malawi.

Malawi has few exploitable mineral resources. A South-African Australian consortium exploits uranium at a mine near Karonga. Coal is being extracted in Mzimba District. Malawi's economic reliance on the export of agricultural commodities renders it particularly vulnerable to external shocks such as declining terms of trade and drought. High transport costs, which can comprise over 30% of its total import bill, constitute a serious impediment to economic development and trade. Malawi must import all its fuel products. Other challenges include a paucity of skilled labor, difficulty in obtaining expatriate employment permits, bureaucratic red tape, corruption, and inadequate and deteriorating road, electricity, water, and telecommunications infrastructure which hinder economic development in Malawi. However, recent government initiatives targeting improvements in the road infrastructure, together with private sector participation in railroad and telecommunications, have begun to render the investment environment more attractive.

Malawi remains one of the poorest countries in the world despite making significant economic and structural reforms to sustain economic growth. The economy is heavily dependent on agriculture, employing nearly 80% of the population, and it is vulnerable to external shocks, particularly climatic shocks.

The Malawi Growth and Development Strategy (MGDS), a series of five-year plans, guides the country’s development. The current MGDS III, building a Productive, Competitive and Resilient Nation, will run through 2022 and focuses on education, energy, agriculture, health and tourism. The process is underway to develop a successor plan of Vision 2020, the country’s long-term development plan.

Malawi’s economic freedom score is 52.8, making its economy the 152nd freest in the 2020 Index. Its overall score has increased by 1.4 points, helped by a higher property rights score. Malawi is ranked 34th among 47 countries in the Sub-Saharan Africa region, and its overall score is slightly below the regional average and well below the world average.

The economy of Malawi has been in the mostly unfree category since the inception of the Index in 1995. GDP growth in the past half-decade has been moderate as generally favorable weather conditions have increased crop yields.

Greater economic freedom in Malawi has long been held back by several factors. The ineffective rule of law, indicated clearly by weaknesses in property rights protection, judicial effectiveness, and

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