A new World Bank poverty assessment report has found that Malawians are as poor today as they were a decade ago. Specifically, the report found that just over half the Malawian population (50.7%) are poor, almost no different from a decade ago.
High population growth, low levels of average per capita GDP growth (1.5%) and reliance on low-productivity, rain-fed small-holder agriculture are the core drivers of stagnant poverty levels.
Nevertheless, poverty levels have decreased significantly in rural areas in the northern and southern regions of the country. People who escaped poverty included those who moved from agriculture into ganyu (short term labor), household businesses, and salaried employment, and those that improved their levels of education. At the same time, agriculture declined as the main source of household income from 70 percent to below 50 percent, while ganyu increased from 18 percent to 37 percent.
Climate shocks drove many people into poverty. For every three Malawians that moved out of poverty between 2010 and 2019, four fell back in due to the impact of weather shocks. In addition, women face disproportionate constraints in accessing inputs and resources. Women’s agricultural productivity is lower than men’s, mainly due to differences in access to inputs, land, and finance.
“This report is a call to action: Malawi’s poverty remains stubbornly high. Climate shocks, high fertility, and low growth are key factors. While we see a significant shift out of agriculture over the last decade, constraints to starting household business are high, and the informal sector has not delivered on income generation,” says Hugh Riddell, World Bank Country Manager for Malawi.
In order to overcome these challenges, the report recommends a stronger focus on enhancing agricultural productivity and improving non-farm employment options. The latter requires redoubling efforts to support private sector-led investment and job creation, including in growing urban areas. The report also stresses the importance of improving school completion rates, particularly for girls, and redirecting existing social programs to target households that are exposed to climate shocks.