WEF_GrowAfrica_AnnualReport2014

2013 in Review 2013 in Review
THE LONG VIEW
Getting a largely agricultural economy
back on track
Agricultural GDP Growth Rates
Ag GDP Growth
CAADP Target
40
The Malawi economy is largely agro-based, with
agriculture contributing around 38% of GDP. Roughly
a third of the rural population is directly engaged in
agriculture as an economic activity with a large majority
of that agricultural labour force composed of women
(60 percent). Malawi’s agricultural sector currently
produces Cassava, Maize, Potatoes, and Sugarcane in
significant quantities. It produces 12 percent of Africa’s
annual Potato production.
During the period 2006-10, Malawi experienced strong
economic growth averaging 7.1%. This provided the
GoM with sufficient fiscal breathing space to redirect
spending to growth-enhancing programmes, such as the
Farm Input Subsidy Programme (FISP), with up to 28.9
percent of annual public expenditure into agriculture –
far exceeding the CAADP target. This public investment
further advanced agricultural growth and contributed to
a decline in poverty for Malawi’s 16.8 million persons,
from the extreme of 73% in 2005 to 61% in 2010.
Malnutrition is relatively low compared to other sub-
Saharan countries at 13.8% of the population.
However, owing to ill-advised macroeconomic policies,
such as rising budget deficits in an overvalued exchange
rate regime, the economic situation worsened, with
real GDP growth declining from 6.5% in 2010 to 1.9%
in 2012. During this same period, the International
Monetary Fund’s Extended Credit Facility (ECF)
programme with Malawi was also declared off-track,
leading to a decline in donor support for the country.
Since April 2012, President Joyce Banda’s government
has embarked on economic and governance reforms
to address Malawi’s macroeconomic imbalances
and encourage resumption of donor support. Recent
indications suggest an improving macroeconomic
environment with slowing year-to-year headline
inflation and the stabilisation of the Kwacha. Malawi’s
economy is projected to grow at 5% in 2013 up from
1.9% in 2012, in addition to a 5.7% rise in agricultural
output. With 84% of Malawians living in rural areas,
rural growth through agricultural transformation is
clearly critical as Malawi strives to reduce the number
of its people living in absolute poverty.
20
0
-20
-40
-60
-80
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007
Source: ReSAKKS 2014 - www.resakss.org
SNAPSHOT OF AGRICULTURAL ECONOMY
Rural Population
Total population:
16,829,000
2009 2011
Population Economically Active in Agriculture
Total:
5,527,000
CAADP TARGETS
13.8% 61.6%
Child malnutrition:
% of children under 5 underweight
(World Development Indicators, 2010)
Poverty:
% living below $1.25/day
(World Development Indicators, 2010)
Rural population:
14,115,000
59.7% 40.3%
Source:
FAO-STAT 2014 - http://faostat.fao.org/
Source:
FAO-STAT 2014 - http://faostat.fao.org/
Public agriculture expenditure share in total public expenditure 1990 - 2010
Ease of Doing Business - Rank of 189 Countries
Top 10 Crops by Production (tonnes)
35
30
25
20
15
10
5
Malawi
CAADP Target
Overall 171
Starting a Business 149
Getting Credit 130
Protecting Investors 80
Trading Across Borders 176
Enforcing Contracts 145
EASY 50 100
150
HARD
4,692,202 Cassava
3,618,699 Maize
3,255,780 Potatoes
2,800,000 Sugar Cane
539,524 Pulses
384,869 Groundnuts
380,000 Bananas
110,964 Rice
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Source: www.resakss.org
2010
Source:
World Bank 2014 - http://www.doingbusiness.org/
106,592 Soybeans
66,497 Sorghum
Source:
FAO-STAT 2014 -
http://faostat.fao.org/
102
Malawi
Malawi
103