Malawi - Recent economic developments

RESTRICTED Report No. AE- 17a FiLE COPY This report is for official use only by the Bank Group and speciricaily authorized organizations or persons. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report. INTERNATIONAL BANK FOR RECONSTRUCIION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION RECENT ECONOMIC DEVELOPMENTS MALAWI August 27, 1971 Eastern Africa Department  CURRENCY EQUIVALENTS Currency Unit: Malawi Kwacha (K) ; from February 15, 1971 Malawi Pound (Lm) ; prior to February 15, 1971 K = US $ 1.2 Lm = US $ 2.4 All currencies in this report are expressed in the new Malawian unit of K.  TABLE OF CONTENTS Paragraph BASIC DATA MAP RECENT ECONCMIC DEVELOPMENTS ........... 1 PUBLIC DEVELOPMENT EXPENDITURES .............. 7 PUBLIC FINANCIAL RESOURCES .................. 12 PUBLIC SAVINGS .............................. 15 POPULATION .............................. 20 EXTERJAL DEBT .............................. 21 ANNEX - POPULATICN PRESSURE STATISTICAL APPENDIX This report is based on the work of Mr. Joseph Hilmy who visited Malawi in February-March 1971.   BASIC DATA (K 1 = US $1.20) Area 119,000 square kilometers Population (estimate 1970) Total 4.h million Rate of growth Around 2.5 percent per year Density 37 per square kilometer Political Status Independent Republic (Independence on July 6, 196L) Gross National Product (1970) at market price K 266 million per capita K 60 $ 72 average annual growth rate (1964-1970) at current prices 10.2 percent at constant prices 5.3 percent Gross Domestic Investment (1970) K 51.6 Industrial Origin of GDP (1970) in Percent of Total AgricuLture, Forestry and Fishing 50.0 Mining & Quarrying .1 Manufacturing 12.5 Building & Construction .8 Water & Electricity 1.1  -2- Industrial Origin of GDP (1970) in Percent of Total (continued) Transport & Communication 5.0 Distribution 9.6 Banking, Finance & Insurance .2 Community Services 10.5 Other Services 5.2 Gross Domestic Product 100.0 (non-monetary sector) MM Financing of Public Development Expenditures (K million) 1964 1967 1970/71 Development Expenditures & Other Public Sector Investments 8.8 13.1 h2.9 Public Savings -12.3 -10.2 -3.4 Current Budget Support lb. 11.9 6.9 Development Domestic Loans .1 2.8 5.2 Development External Loans & Grants 3.6 6.o 33.5 Changes in Balances of Government Funds -3.0 -2.6 -.7 Balance of Payments (K million) 1964 1967 1970 Exports 24.4 40.4 47.5 Imports 28.6 50.1 68.h Trade Balance (-4.2) (-9-7) (-20.9) Services (net) -13.0 -18.9 -20.5 Transfers 18.1 17.7 13.1 Current Account Balance -0.9 -10.9 -28.3  - 3 - Balance of Payments (K million) (continued) l964 1967 1970 Private Long-term Capital 1.1 3.5 -3.5 Public Long-term Capital 1.0 9.1 29.1 Others including Errora & omissions .4 -2.3 7.9 Capital Account Balance 2.5 10.3 33.5 SDR . - - 1.6 Overall Balance +3.4 -.6 +6.8 Official Foreign Exchange Reserves, end of period ($ million) 22 22 30 IMF Position Quota $15.00 million Drawings as of December 31, 1970 $ 0.95 million Initial allocation of SDR's 1.89 million External Public Debt (1970) Total outstanding as of December 31, 1970: Disbursed $117.4 million Including undisbursed $152.1 million Debt Service Ratio (percentage) 9   - ._ __ n =~~~~~~~~~~~~~~~~~~~~EPUBLIC g I-ARONGA 7 flEsu NUAN PROJECT CONGO ,TA NA N I AREA ~ .C_ .tA,R EANGOLA F z A M B I A AL C,,t,po . . AM AKrJrongrJ 7RHODESIA / F: KOrOrIQO - ~~~~SOUTH ;WEST BOTSWA;A N -A / . - \ \ ;!1 QChi lumba (J SOUTH \ - AFILAND AFR ICA 7~- \ / rC\ hiweto LE,, - , , ( i b pi 4 - t \ > 3 t1 - As -. -.IECT M2UZUXNkhotr ' ' - *-,JOEC AREA AREA ay N *_S. / / * * MALzA W/I A'~~~~~~~~~~~OB . ....- . j XonkeG' * hc K r - ,_ , LILONGWE ;. O(( . zfa 5;-! H edzo R \ ioz ROA;N DROAADS JOKA51NDUINSONOROJE , tRAILWAYS b SHR . . _ - ! ,7 .., + -,I.V ACAILA RAIL LINK 0'N- I;rm *AIRFIELDS X^, < A . REG!ONAL BOUNDARY Ns.nje b , ,) . vOFr!i-O 20 60 80 too,~~~~~~~~~~~Book ' .- ' . \ ' ' -,'p'' MILES .LTo aEIFRA LM J U N IE 1 OA K71 1 NORLD 2C7i3k3 R   RECENT ECONOMIC DEVELOPMENTS 1. Malawi became independent with the break-up of the Federation of Rhodesia and Nyasaland in 1964. At that time, Malawi, known as Nyasaland, was the poorest of the three countries forming the "Federation" and received budgetary support from the United Kingdom amounting to K13 million / or just about 40 percent of its current expenditures. 2. Since then, GDP at constant prices has risen by about 5.3 percent annually; gross investments increased by 28 percent annually and the British aid for the current budget declined to only 13 percent of current expend- itures in 1970/71.? ' The balance of payments showed a deficit during 1966, 1967 and 1969 (with a small surplus in 1968) reflecting the excess of heavy public investments over the available domestic and external resources. How- ever, with the doubling of exports between 1964 and 1970, and an increased capital inflow in the latter year, last year resulted in a surplus of K6.8 million ($8 million) and foreign exchange reserves reached $30 million at the end of 1970, i.e. equivalent to about 41. months imports. 3. The principal reasons for the rapid increase in GDP since independence are the growth of agricultural productivity, the successful introduction of import substitution industries and a substantial rise in investments. In addition certain external factors had played a part, partic- ularly in recent years, such as the boycott of Southern Rhodesia by a large number of countries which led to higher tobacco exports from Malawi. Further- more, the price index of Malawian exports rose by about 23 percent between 1967 and 1970, particularly because of price increases for tobacco, tea and groundnuts. 4. Since independence, agricultural yields and production have risen. With a rapid expansion of agricultural extension services, new techniques and improved inputs were introduced. There was a sharp rise in the application of fertilizers and insecticides, an increasing use of hybrid maize and an increase in early planting. Yields and quality therefore improved. 5. Industrial production rose by 22 percent a year on the average since independence and now accounts for 9 percent of GDP. The Government was successful in encouraging the establishment of a number of import substitution industries by providing industrial sites and services and by permitting drawbacks of custom duties paid on material used in the manu- facturing of exported articles. It also introduced a generous system of initial depreciation allowances and, in certain cases, where it was felt that the investment was large in relation to the size of domestic market, the new enterprise was granted an exclusive right of production in Malawi for a limited time. The scope for further import substitution industries now seems fairly limited. 6. Gross investment rose from 11 percent of GDP in 1964 and 1965 to 20 perceint for the last two years. Part of this increase was financed 1/ Amount includes K1.3 million grants for topping-up of British expatriate salaries under OSAS (Overseas Service Aid Scheme) and BACS (British Assisted Contract Scheme). 2/ Fiscal years: January 1 to December 31 (1964-1969) April 1 to March 31 (starting 1970/71)  - 2 - by a rise in net capital inflow from K4 million annually in 1964-1965 to K29 million annually in 1969-1970. Another part was met during 1966 and 1967 by drawing down foreign exchange reserves. However, a rising portion of gross investments was covered by an increase in domestic savings. While in 1964 domestic consumption almost equalled GDP and gross domestic saving in the following year was about K4 million, Malawi now saves about K16 million annually which represents about 30 percent of total investment. Public Development Ecpenditures 7. All the development expenditures of the Central Government and most of the investments by public entities (such as Malawi Railways, Electricity Supply Commission, Farmers Marketing Board etc.) are contained in the Central Government "Development Account Budgets". Some additional outlays on public capital formation are included in public enterprises' accounts. The share of publ-c entities investments which are not included in the Central Government's budgets declined from 31 percent of the total in 19614 to about 8 percent last year reflecting more central control over investments of public entities and also a shift in some lenders' attitude opting to lend through the Government rather than directly to public entities. The Government has no investment plan for the economy as a whole, but maintains a three year revolving public sector development program which includes proposed expenditures on projects, and possible sources of financing. It is currentLy considering setting out some general economic targets for the next 10 years. 8. The main characteristics of public investments and Central Government development expenditures since independence are, firstly, a sharp rise in their overall level by about 30 percent a year to reach K43 million in 1970/71, and secondly, a change in their character with more emphasis in recent years on agriculture and transport. A number of agricultural schemes., incorporating provision of inputs, credit, extension services, marketing and some infrastructure were introduced at Salima (financed by German aid) zmd at Lilongwe and Chikwawa (financed by IDA) during 1968 and 1969. Investments on roads were increased since 1968 with particular emphasis on the opening of regions towards the northern part of the country. The most important projects were the construction of the Zomba/Lilongwe road in 1968, a comparable route on the coastline of Lake Malawi from Senga to Nhkota Kota in 1969, a lakeshore road from Balaka to Salima with a fork to Monkey Bay, financed by US/AID in 1970/71. While investments in railways were almost negligible until 1968, outlays on the construction of the Nacala link and the purchase of additional rolling stock took about 26 percent of total Central Government development expen- ditures last year. However, some of the investments during this period, e.g., the Nacala railway link and some roads, were undertaken earlier than justified by the growth of demand. 9. The current development program for the years 1971/72-1973/7h envisages public development expenditures for the Central Government averaging about K31 million a year (compared with K39 million in 1970/71, an amount which is except-ionally high due to the completion of the Nacala railway link, which alone accounted fo:' about Kll million). This overall  -3- level, nevertheless, is probably feasible provided that an adequate supply of experienced manpower is available. 10. This may be especially important in agriculture where the recent rapid increase in investments from K2 million to K12 million, i.e. from 6 percent to 17 percent of total Central Government development expenditures, for the triennial periods 1965-1967 and 1968-1970/71 was not matched by a comparable expansion of the supply of skilled manpower for extension services. Already there are an increasing number of unfilled vacancies, particularly at the lower field assistants' level. With a further budgeted increase in agricultural investments to K23 million for the follow- ing three years (thus reaching about 25 percent of total Central Government development expenditures), the demand for skilled manpower will increase. To meet this need will require an expansion of agricultural education or a further increase in the use of foreign experts. 11. Expenditures on the new capital at Lilongwe which amounted to over K2 million last year are expected to increase to K7 million in 1973/74.- The current plans are to move the Ministries of Agriculture, Works and Education by the summer of 1972. Arrangements are being made for financing the second stage but there will be a period of at least two years during which Government departments will be divided between Blantyre, Zomba and Lilongwe. UAIAWI - FWNiCM OF PUBLIC DLVE..OPNT InEl'RES (K million) i964 1965 1966 1967 1968 1969 1970/71 (Revised estimate) Development E.penditures & othor Public Sector Capital Formation 8.8 16.8 13.1 18.4 25.0 _2.9 Financed by: Public Savingss Central Oovornment (-14.5) (A14.0) (-13.3) (-12.2) (-10.-) (-8.8) (-7-0) Public Entities (1.8) (2.5) (1.7) (1.5) (2.7) (7-1) (3.3) Local Authorities (.4) (.3) (.4) (.5) (.6) (1.0) (.3) Total -12.3 -11.2 -11.2 -10.2 -7.1 -.7 -3.4 Current Budget Support 14.4 15.2 12.2 11.9 10.2 8.5 6.9 Davelopment Domestic Loans .1 2.6 2.6 2.8 6.1 3.5 5.2 Development External Loans & Orants 3.6 7.2 6.o 6.o 7.6 14.6 33.5 Total Sources 58 13.8 2.6 10.5 16.8 25_9 42.2 Balance / -3.0 0 -7.2 -2.8 -1.9 +1.5 -1.8 lj Ropresenting mainly changes in balances of Government funds. Fiscal years: January 1 to December 31 (1964-1969) April 1 to March 31 (1970/71) Based on Tables 5.1 & 5.2 to 5.9 in the appendix.  Public Financial Resources 12. The main trends in the financing of public development expenditures have been, firstly, a reduction in the consolidated public deficit of the Central Government, public entities and local authorities from K12.3 million in 1964 to K3.4 in 1970/71. Most of the improvement was due to the operations of the Central Government but there was also some improvement in the position of the public entities (see paragraphs 15-19). 13. Secondly, the Government was able to increase its domestic borrowing from a negligible amount in 1964 to about K2.7 million annually between 1965 and 1967 and an average of about K5.0 million annually in the following three years. The stagnation of the growth of domestic loans between 1965 and 1967 followed the rather modest increase in the monetary GNP sector, while the higher level of domestic loans raised in the last three years reflects the increase in the rate of growth of monetary GNP (which reached 17 percent in 1969). The budget for 1971/72 aims at raising K5.0 million and this seems quite possible. However, the recent increase has created some difficulties for public entities in raising domestic loans. The Government last March did not permit the Malawi Development Corporation to float a specific loan as it was itself seeking one. 14. Thirdly, there has been a very large increase in public external loans and grants for development purposes. They averaged about K6.7 million between 1965 and 1968 but then rose to KlI..6 million in 1969 and K33.5 million in 1970/71. External finance covered roughly 40 percent of total development expenditures and other public sector capital formation between 1961 and 1968, and then rose to over 78 percent in 1970/71. After independence, UK external development aid to Malawi increased slowly with a larger share in the form of loans rather than grants. South Africa, which began lending to Malawi in 1969 has now become the largest single source of external aid. It provided 37 percent of the total last year and is expected to make a substantial contribution in the future. Public Savings 15. Between 1964 and 1970/71, the Central Government current deficit was halved and British budgetary support was steadily reduced until, in the current year, 1971/72, it is expected to finance only 10 percent of recurrent expenditures as compared with 10 percent in 1964. 16. Revenue increased by over 15 percent per year between 196h and 1970/71 against a 7 percent expansion of recurrent expenditure. While the largest part of the rise in current revenue was a result of an increase in the rates of indirect taxation, part of it was due to the process of monetization of the economy. The progressive income tax also played some role as did the gradual using up of the initial capital and special deprec- iation allowances for new industries, some of which were introduced shortly after independence. 17. The modest rise in Government recurrent expenditures reflected a more efficient operation of Government services. In recent years, some  - 5 - customs and excise duties were replaced by a "sales tax" which increased reivenue with comparatively little addition to administrative expenditures. Improved budgetary techniques were also introduced such as the adoption of the "appropriation in aid" approach which links the level of expenditures for specific Government departments to targets of revenue collected by them. 18. Last year the Cabinet approved certain rates of increase for the different types of recurrent expenditure for the next 3 years in order tc) contain the overall rise in recurrent expenditures to 6 percent a year. FuLrthermore, the Government's objective is to eliminate British budgetary support by 1974, except for the "topping up" of salaries of British exDatriate civil servants in Malawi. The chance that the Government will succeed in this objective seems reasonably good. 19. Public entities contributed a surplus of K1.8 million in 196L which increased to K3.3 million last year, 1970/71. The main element of the improvement was a steady increase in savings by the Electricity Commission of Malawi (ESCOM) which now provides about one third of total savings by public entities. ESCCM's better results are due partly to more efficient operations and partly to a rise in rates. Savings by the Farmers Marketing Board (FMB), the public entity responsible for marketing most of Malawi's crops, have varied considerably. In 1967, beset my management problems and unable, for non-economic reasons, to reduce the price paid for purchasing certain commodities from farmers, FMB operations resulted in a deficit of K3.2 million. There has been a modest improvement since then, but the record financial surplus of K4.2 million in 1969 largely reflects sales by FMB, at high prices, of large tobacco stocks. The Malawi Railways' surplus declined since 1967 from Kl.4 to KO.6 million last year. This was due, to a great extent, to the loss of Zambian transit traffic when the Tan-Zam pipeline was opened in 1968. Future prospects are not encouraging as the traffic on the Nacala line, of which the major part will come from diverting traffic already using the rail- way link to Beira, is expected to take some time to builh up. This is partly because plars for developing Nacala have not yet started. Meanwhile, the Railways will have to service the South African Loan borrowed for the construction of the link which, for the next six years, will require between K1.2 to 1.6 million (i.e. $1.5 to 1.8 million) annually. Altogether, therefore, public entities as a whole may not contribute a substantial amount to public savings in the short Population O. Population was thought to be increasing at 3 percent a year, b3ut as a result of a new survey the rate is now believed to be between 2.1 to 2.6 percent. The structure of population and the high fertility ratios, in addition to the pressure of population on land, could create a serious iemographic problem, particularly if there is some improvement in health services on which expenditure is at present very low. (See Annex on "Populat- ion Pressuree"). &cternal Debt 21. In the next few years, the improvements in the fiscal situation of the Central Government would go to eliminate the need for external  - 6 - budget support while public entities are unlikely to contribute significantly to finance investments and Malawi will have to rely to a large extent on external aid for some considerable time. The service on Malawi's external public debt as of December 1970 amounted to $5.7 million or about 9 percent of export earnings. According to an estimate prepared by the Malawi authorities, if new borrowing amounts to K24 million ($29 million) a year, which is not an unreasonable figure, the debt service will rise to 17 percent by 1978/79, even if only 10 percent of the borrowing is on hard terms and if exports grow by 7 percent a year. Hence, Malawi's need for aid on concessionary terms is clear. Because of the high proportion of investment which mast be financed by external assistance, it is necessary for aid to cover a substantial portion of total project costs, including some local expenditure.  ANNEX POPULATION PRESSURE 1. Until last year, the rate of population increase was estimated at 3 percent annually based on results obtained from the last two censuses of 1966 and 1945. In a Population Change Survey carried out in 1969, the results of which are presently being finalized, the rate of population increase is expected to fall within a range between 2.1 and 2.6 percent annually. 2. There is a high dependency ratio with those under 15 and over 60 years amounting to 47 percent of total population. In the absence of registration of births, other indications point to high birth and fertility rates. According to the 1966 Census, the number of women in the child bearing ages of 15-44 amounts to 43 percent of the total female population and the child/woman ratio (i.e. number of children under age 5 divided by the number of women aged 15-44 years x 100) is 79. The average number of children born to a mother by the age of 55 is 7.2, while the average number of children per family would probably be only between 3 and 4. Expectation of life at birth is about 30 years and the median age of the population is only 17.5 years (males 16.5 years and females 18.5 years). The recent Survey indicates a very high infant mortality, tentatively estimated at about 240 deaths per 1,000 live births which makes it probably one of the highest in Africa. 3. Per capita public current expenditure on health is fairly low amounting to about 85 cents annually and might amount to just over $1 when accounting for expenditures by the missionaries. Yearly per capita public investment on health during the last eight years was declining and currently averages only 3 cents; there is also investment by missions. Sooner or later, there is bound to be increased pressure for an improvement in public health, the direct effect of which would be a marked reduction in infant mortality. The dependency ratio would increase and, with a high percentage of women in the child bearing ages, the birth rate would rise also. Hence, it is quite possible that the rate of population gro-wth could increase substantially. 4. According to a recent survey, there are about 780,000 acres of fertile unused land and over one million acres needing some infrastructure to make it suitable for use. Most of the current and planned agricultural developments relate to land in the second category. The remaining unused high quality land is in small scattered areas which do not lend themselves to large development projects and are, therefore, left for use by the subsistence sector. On the assumption that the cultivated area in the subsistence sector increases by roughly 3 percent a year to accommodate the rise in population, the unused fertile land would all be utilized in about seventeen years. It is of course possible to increase agricultural output without increasing the area under cultivation and the Government is putting much emphasis on the education of farmers in new agricultural techniques and in the use of fertilizers and other inputs. These methods have already produced a considerable increase in agricultural productivity. Nevertheless, the normal experience of most developing countries is that agricultural productivity does not rise sufficiently rapidly to avoid the appearance of pressure on the available agricultural land. The degree of pressure which develops is the greater the more rapidly the population increases.  I  STATISTICAL APPENDIX No. Contents Population 1.1 Population by age and sex: 1966 Census National Accounts 2.1 Gross National Product at Current Prices 2.2 Expenditures on Gross Domestic Product at Current Prices Balance of Payments, External Trade 3.1 Balance of Payments 3.2 Foreign Exchange Reserves: as of December 31 External Public Debt 4.1 External Public Debt Outstanding as of December 31, 1971 4.2 Estimated Future Service Payments on External Debt Outstanding, including Undisbursed as of December 31, 1970 4.3 Past Transactions on Public Debt 1966-1970 Fiscal Statistics 5.1 Financing of Public Sector Development Expenditures: Overall Picture 5.2 Central Government: Public Savings 5.3 Central Government Revenue Account: Receipts 5.4 Central Government Revenue Account: Current Expenditure per Economic Function  Fiscal Statistics (cont.) No. Contents 5.5 Central Government Development Account: Revenue 5.6 Central Government Development Account: Expenditure per type of Service 5.7 Public Enterprises: Savings (Current Profits plus Depreciation) 5.8 Public Enterprises: Gross Capital Formation 5.9 Local Authorities: Gross Capital Formation and Savings Agricultural Statistics 6.1 Marketed Production of Main Crops: 1968 to 1970 and Estimates for 1971 6.2 Statistics on the Use of Fertilizers, Cotton Spraying and Agricultural Extension Service Staffing.  Table 1.1 M1AWI - PCPtlATION BY AGE AND SEX: 1966 CENSUS NUMBE (in 1000) PERCENT TOTAL MALE 7(AEU TOTAL MALE FEtlLE Under 5 years 748 366 382 18.6 19.1 18.0 5 to 9 years 596 296 302 14.8 15.4 14.2 10 to 114 years 429 218 211 10.6 11.4 9.9 15 to 19 years 402 192 210 9.9 10.0 9.9 20 to 24 years 314 136 178 7.8 7.1 8.14 25 to 29 yatrs 302 128 174 7.5 6.7 8.2 30 to 34 years 233 101 132 5.8 5.3 6.2 35 to 39 years 240 106 1314 5.9 5.6 6.3 40 to 44 years 155 70 85 3.8 3.6 4.0 45 to 49 years 181 83 98 4.5 4.4 1.6 50 to 54 years 113 55 58 2.8 2.9 2.7 55 to 59 years 97 48 49 2.4 2.5 2.3 60 to 64 years 66 33 33 1.6 1.7 1.6 65 years and over 161 82 79 14.0 14.3 3.7 TOTAL 4,039 1,9114 2,125 100% 10% 100% Estimate of P-pulation.1 970: at annual increase of: 2.0% 14,371 2.5% 4,1459 3.0% 14,56 Source: Population Census 1966   Table 2.1: MALAWI - GROSS NATIONAL PRCDUCT AT CURRENT PRICES (K million) 1964 1965 1966 1967 1968 1969 1970 Agriculture, Forestry & Fishing 84.8 99.2 107.6 110.0 110.0 118.5 129.2 (non-monetary sector) (63.o) (71.1) (78.8) (78.4) (79-1) (81.40 (88.2) Mining & Quarrying 0.1 0.1 0.1 0.1 0.1 0.1 0.2 Manufacturing 12.1 15.3 18.9 21.7 23.8 27.6 31.9 (non-monetary sector) (4.4) (5.3) (5.5) (6.2) (6.3) (6.1) (6.1) Building & Construction 5.6 6.6 8.9 8.6 10.2 12.1 12.1 (non.-monetary sector) (2-3) (2-7) (2-8) (3-3) (3.-) (3-5) (3.6) Water & Electricity 1.1 1.3 1.7 2.0 2.3 2.5 2.9 Transport & Communication 1/ 5.6 7.0 8.9 10.6 10.4 10.4 12.6 (non--monetary sector) - (O.1) (0.5) (0.5) (0.7) (0.7) (0.7) (o.6) Distribution 11.9 14.8 15.7 15.5 19.3 22.6 24.3 Banking, Finance & Insurance -0.2 0.4 0.3 0.4 0.5 0.5 o.6 Community Services 2/ 17.8 18.4 21.2 23.1 24.4 25.3 26.7 Other Services 3/ 7.8 8.8 9.6 10.9 11.7 12.4 13.1 (non.-monetary sector) (2.2) (2.5) (2.5) (2.8) (2.8) (2.8) (3.0) Gross Domestic Product at factor cost 146.6 171.9 192.9 202.9 212.7 232.0 253.7 (non-monetary sector) (72.3) (82.1) (90.1) (91.1) (92.3) (94.5) (101.5) Add Net Indirect Taxes 14.9 6.9 9.9 11.0 11.1 13.6 17.2 Gross Domestic Product at market price 151.5 178.8 202.8 213.9 223.8 245.6 270.9 (non.-monetary sector) T72.) T)I) T(90) TIT-) T(2.3) TM-3) (101.) Add Net Income from Abroad -6.2 -4.3 -5.6 -7.8 -7.0 -5.7 -4.9 Gross National Product at market price 145.3 174.5 197.2 206.1 216.8 239.9 266.0 (non monetary sector) 7r") (o2-7) TwI) T1i) T!2) TKM) (I .) 1/ Includes storage. 2/ Includes expenditures on education, health, public administration and defence. V Includes rents, domestic services and subsistence services. Sources: National Statistical Office, National Accounts Report, 1964-1968.  Table 2.2: MALAWI - EXPENDITURE ON GROSS DOMESTIC PRCDUCT AT CURRENT PRICES (K million) 1964 1965 1966 1967 1968 1969 1970 CONSUMPTI CN EXPENDITURE: Public 23.8 26.8 31.6 34.5 36.7 38.6 41.9 Private Monetary 56.5 68.0 78.2 82.5 92.4 101.4 112.4 Non-monetary 70.2 80.2 86.9 88.2 89.5 91.9 98.5 Total 150.5 175.0 196.7 205.2 218.6 231.9 252.8 GROSS DOMESTIC INVESTMENT: Fixed Capital Formation: Public 7.9 13.4 16.2 13.6 18.1 24.0 25.6 Private 5.3 5.9 13.2 11.9 19.3 25.0 23.0 Total (13. 2) (19.3) (29-J) (2Cic) (37.4) (49.0) (48. 6) Changes in Stocks -1.2 5.8 6.0 4.0 -0.7 -1.0 6.0 Total 12.0 25.1 35.4 29.5 36.7 48.0 514.6 TOTAL D(I4ESTIC EXPM4DITURE: 162.5 200.1 232.1 234.7 255.3 279.9 307.1, DEDUCT IMPORT SJRPLUS 1/ -11.0 -21.3 -29.3 -20.8 -31.5 -34.3 -36.5 EXPENDITURES CN GROSS DOMESTIC PRODUCT 151.5 178.8 202.8 213.9 223.8 245.6 270.9 1/ i.e. input of goods and non-factor services minus exports of goods and non-factor services. Source: National Statistical Office.  Table 3.1: MALAWI - BALANCE OF PAYMENTS (K million) 1964 1965 1966 1967 1968 1969 1970 CURRET ACCOUNT: Exports 24.4 28.5 34.6 40.4 40.0 43.2 47.5 Imports -28.6 -40.9 -54.1 -50.1 -57.0 -61.0 -68.4 Balance of Visible Trade -4.2 -12.4 -19.5 -9.7 -17.0 -17.8 -20.9 Non-factor services -6.8 -9.0 -9.7 -11.1 -14.5 -16.5 -15.6 Factor income -6.2 -44.3 -5.6 -7.8 -7.0 -5.7 -4.9 Balance of Visible Trade & Services (-17.2) (-25.7) (-34.8) (-28.6) (-38.5) (-40.0) (-41.4) Transfers (18.1) (27.2) (16.9) (17.7) (16.5) (15.5) (13.1) Balance on Current Account 0.9 1.5 -17.9 -10.9 -22.0 -24.5 -28.3 CAPITAL ACCOUNT: Private long-term capital 1.1 2.1 3.2 3.5 7.6 8.5 -3.5 Public long-term capital 1.0 - 5.2 9.1 11.7 15.2 29.1 Others including errors and omissions =.4 4.0 h19 -2.3 4.3 .6 7.9 Balance on Capital Account 2.5 6.1 13.3 10.3 23.6 24.3 33.5 ALIOCATICN OF SPECIAL DRAWING RIGHTS - - - - - - 1.6 OVERALL BALANCE +3.4 +7.6 -4.6 -.6 +1.6 -0.2 +6.8 Source: National Statistical Office.  Table 3.2: MALAWI - FOREIGN EXCHANGE RESERVES: AS OF DECEMBER 31 (K million) 1965 1966 1967 1968 1969 1970 Reserve Bank of Malawi 15.2 13.6 15.0 14.4 14.1 21.1 1/ Other Official 2.9 1.7 3.7 4.3 3.3 3.2 Total Official Reserves (18.1) (15.3) (18.7) (18.7) (17.4) (25.3) Commercial Banks .1 -1.6 -5.1 -3.5 -2.5 -2.5 Total 18.2 13.7 13.6 15.2 14.9 21.8 1/ Consists of the gold tranch with IMF, Treasury, balances with the Crown Agents and the balance of the proceeds from the sale of the Zambezi Bridge. Source: Reserve Bank of Malawi Ministry of Finance  Table 4.1: MALAWI - EZTERNAL PUBLIC DEBT OUTSTA'DING AS OF DECDYBER 31, 1970/1 Debt Repayable in Foreign Currency (In thousands of U.S. dollars) Debt Outstanding DecoGber 31, 1970 Source Disbursed Including only undisbursed TOTAL EXTERNAL PUBLIC DEBT/2 117,398 152.107 Privately held debt/3 15 851 16j063 Publicly issued bonds/3 14,950 lb 950 Suppliers 1gB 15L United lKingdom 103 103 South Africa 55 55 Financial institutions 743 955 United Kingdom 3 United States 13 13 Others 542 582 Loans from international organizations - IDA 16891 3270 Loans from governments 84 ,65( 103,29h Denmark 2,7999 Germany (Fed. Rep. of) 5,587 8,430 South Africa 20,775 24,975 United Kingdom 54,830 58,022 United States 465 7,200 71 Debt with an original or extended naturity of over ore year. 75 Does not include locally issued externally held debts of $8,772,000 equivalent. /3 Net of accumulated sinking fund of $1,380,000. Statistical Services Div-ision Economics Department April 13, 1971  Table 1z.2: M<AU',.l - mcLt ,rU ,*^.Ir2S,,>-; : -'ti<'^.'lclC 1)ZB,T 0lST.D. IN;CLUD17,; U.:DIS-MM.r, 111 OF D,'-? 31, 1970 I)ebt Repayable i.n Foraign C))rrcnc:y (In thlousanlds of U.S. dollai-a) DE.BT OUTST (0EGItJ OF FER