Malawi - The economy

RESTRICTED 1a UOPV jReport No. AF-51a This report was prepared tor use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION THE ECONOMY OF MALAWI September 14, 1966 Africa Department CURRENCY EQUIVALENTS 1 Kalai Pound- (-'E) ! ,, $ 5.8 1 T.S. $ 1 .357 or Uoh 3d. n. l l i n M a l w i -1 = . 1 million US $ = L 357,9003 rIWJjL'.LV. jII.L iIVI.xi This report was prepared by a mission consisting of John A. Edelman and Edward jaycox which visited Malawi in June, 1905. Discussions with Malawi Govern- ment officials visiting Washington in June 1966 helped to provide up-dated material. The report also draws on the work of a Bank Mission consisting of Arnold Rivkin, C.G. Paladini and John Shaw which visited Malawi in 1964. TABLE OF CONTENTS Pn atNo PAST. T)ATA .qTTMMAPV AND rfMATTTT4 4 AT T TKAfIPl07TTPr(T .1e sc n w w a ue * * * * * ** * * * * ** * * * * * **** L TT Qr'DTTnrr%TTDLW A Tk D AfrDM.TMU nV MTUV 'Pnn1\TAMV XUjJLL.LU.LVL1oo*e#**oo***** ********ee* * 0 &a** 0 *** C Resources and Production Trends............... 3 11ends LU1 1VaULU.11U- ZAPVU-iUfUe*******s********s* to - Trends in the Government Budget.....0......... 7 The Overall inancialtt 01 i10************** * Agricultural Prospects - General Considerations 11 Estate Crop Prospects.......................... 14 Summary or Export Prospects.................... .5 Mining and Quarrying........................... 16 Maniufacturing.................................. 2-6 Construction.....*********.***** .******** 18 Electric Power.,,.........*.*....e............ 18 Transpor............ .0. .................... 18 Summary of Output Prospects.................... 19 IV. INVESTMENT NEEDS AND FINANCING PROSPECTS............. 20 Public Sector Investment Plans................. 20 Public Finance. ........... ........... 21 Foreign Financing Requirements & Prospects..... 24 STATISTICAL APPENDIX - Tables 1A - 28 BASIC DATA Ara: b47)j7 sn- milA (innrlinp lakeq) 36,448 sq. miles (land area) Population: 4.0 million (estimated mid-1965) Total non-African population: 22,000 (1963) Gross national product: 196 196-6- 1961-67 1954-61 Total market price 58.3 9.0 1.6 4.5 Exchange eonuomy Pu-L Ue v-JL* Vo; aJod.;'6, Subsistence economy 22.2 3.0 3.0 3.0 Per Capita GNP (1965): $ 42 1965 1961-64 Av. 1954-57 Av. Commercial small-holder agriculture 9.8 7.7 6.4 Estate agriculture t. 7.8 9.8 Manufacturing, construction, utilities 10.0 L0. 9e All other exchange sectors 32.6 30.7 26.8 Subsistence economy 4U.> 43.> 47.5 Percent of GNP at market prices Gross investment 18.8 13.0 15.6 Gross domestic savings - 3.8 2.4 6.9 External balance on goods & services-15.0 -11.2 -8.7 Factor income & personal transfers 0.4 0.7 2.5 Government current revenues 15.0 13.0 12.0 Resource Gap as % of investment 80 83 55 Money and Credit (mill. L) December, 1965 Total money supply 10.01 Time & savings deposits Commercial Banks 3.13 Post Office Savings Bank 1.00 Lending to private sector 5.26 Claims on government net 0.62 Est. Actual 1958/59- 1965 Current receipts 9.9 9.0 8.5 Current expenditure 15.1 13.5 7.8 Current deficit 5.2 4.5 Development expenditure 6.0 4.7 8.0 Debt service and other charges 1.7 2.8 Financing External grants 6.9 10.0 External loans 3.9 1.8 Other 2.1 0.2 External Public Debt end 1964 (net of Sinking Funds) Mill. L1 a) Outside currency area of former Federation 12.9 b) Within "t "f 8.8 Total 21.7 External Debt service ratios (Total/external debt) 1965 1966 Percent of government revenues 25 17 Percent of exports 16 11 Balance of Payments 1965 Avera.e annual (Mill. L) rate of change 1958-65 Total exports I),-), 8.0 Total imports -20.7 7.0 Net current account (deficit) - 8.5 Gross foreign exchange reserves 8.5 Commodity Concentration of Exports 62% SUMMARY AND CONCLUSIONS 1. With per capita income at only $ 40 per head Halawi is one of the poorest countries in the world, its resources rconsis ess~ntialy of its comparatively good soils. However, the great part of these are farmed by smallholders using primitive methods. Population is growing at 3% a year, and pressure is heavy on most of the good land. The subsistence of Rhodesia and Nyasaland. While the Federation subsidized public services in Mhalawi to a significant dere aaw i o attac anJythn likethe productive investments that went into Zambia or Rhodesia. When the Fueratiov urue up in 19), tne U.K. tok over tne support u 'Im'a!wi.s budget and has continued to provide substantial budgetary and capital aid since independence in 1o4 at tne rate of about Zo m.lon annually, an amount corresponding to some 14% of GNP. 3. Yet Malawi is by no means a hopeless case. Real output of the monetary sectors expanded by over 5% annually from l954-1961. After a stagnant period in 1962-1964 associated with the transition to independence, total output went up by around 10% in l96. The main dynamic factor over the whole period has been smallholder production of tobacco, cotton, ground- nuts, and pulses. Real output growth of these crops has averaged over 8% annually during the past decade,and has been the main factor in the expansion of exports from around Z 8 million in 1954 to over i 14 million in 1965. Moreover, in 1965, a significant impetus to new manufacturing activity for import substitution was evident. Given an adequate increase in the public development effort and maintenance of a good climate for private investment, there are good grounds for expecting that a growth rate in real output of 7.0% or more in the monetary sectors can be achieved over the next decade. Assuming a continued (notional) growth in subsistence production at a little over 3%, a total growth rate of 5.5% should be attainable. 4. Given this sort of growth, Mplawi should be able to increase its public revenues sufficiently over the next five years to avoid any further increase in its budget deficit, and possibly to achieve at least a moderate reduction. For the next three years the U.K. has promised budget aid of E 5.3 million annually which should be sufficient to cover the deficit, and possibly even to leave a moderate surplus for investment. In addition, there is some scope for some borrowing from the banking system. However, at best, it seems likely that such domestic resources available for public investment will not exceed iQ million over the four years 1966-1969. This compares with an investment program of around Z 30 million for the period. U.K. aid of over b 8 million is likely to be forthcoming on an interest-free basis,. while some U.S. and German aid on similar terms should also be available. The Government is seeking IDA credits as well as soft financing from other sources to make up the differ- ence, I. INTRODUCTION 1. Malawi is one of the poorest and most densely populated countries in Africa, With 45,750 square miles (of which over 9,000 consist of lakes), its land area is comparable to that of Portugal. The country is over 560 miles long and less than 40 miles wide in places, lying north - south along the African Rift Valley. The estimated mid- 1965 total population is 4 million, of which 99.5% are African. Population is estimated to be growing at a rate of about 3% per year. The largest town of the country, BLantyre has somewhat less than 60,000 inhabitants; but rural population pressure on most good land areas is very great, particularly in the Southern region where density reaches 1,700 persons per square mile in some districts. Around 90% of the labor force is engaged in agricultural production and about 70% of agricultural product- ion is consumed in the subsistence sector. Per capita incomes in Malawi are among the lowest in the world at an estimated $40 equivalent. 2. Until its independence on July 6. 1964 Malawi was known as Nyasaland and had been a protectorate of the United Kingdom since 1891. From 1953 to 1964. Nyasaland was part of the Federation of Rhodesia. and Nyasaland with Southern Rhodesia and Northern Rhodesia (now Zambia). The nationalist movement in Malawi under the leadershin of Dr. H. Kamuzu Banda played a major role in the dissolution of the Federation, which was dominated by the white snttlpr sovrnmPnt mf Smithp.rn Rhnr3Pqn, Dr. Banda is now President of Malawi. 3. For the decade immediately prior to its independence, Nyasaland WaR in Affpnt A hAnL-~t.T+er proIn^e of a. IrgeCpolona eniy D1^ur+rTing vcy this period, efforts to develop its economy were geared mainly to the needsind pvrl?ioritie50 of th3-e federal enco.- whole 4- 1.4 w'c ta Nyasaland figures as a relatively undynamic factor without advantage of 11y signifC-nt poli.%_ iaLV-GSU leverage. Hoee, thereU Was, onI bLJCAce, a& significant transfer of funds from the rest of the Federation to Malawi .sup r%of its publi se"ries Disout- of t1-e Feder+,-WAti,-on and Malawi's accession to independence were virtually simultaneous. The budgetary- _ s1por proide by -he Aedral G-ermen was repla-ced byai from the United Kingdom averaging.ZS to 6 million annually for current ~~UI UUUIV-41101 &± J _4~ s-*UJ ILL.LLV.L U.L JILULt VU LkLP.UL VUA.U~LYb* In total this aid corresponds to around 14% of GDP. 4. Prior to 1964, government administration was a main target of nUinalist activity which organized widecpread cIVIL alsobealence. Since independence Malawi has been faced with the task of rebuilding the fabric of government at all levels or Jurisdiction, and or sorting out the roles of the Government and the Malawi Congress. The country experienced a political crisis in September 19b4, less than three months after independence when several ministers challenged the policies of the Prime Minister with respect to salary cuts for African Civil Servants and heavy reliance on expatriate civil servants. The Prime idnister ousted three ministers; three more resigned and in the tense and sometimes violent minths -hat followed, a number of African civil servants either B: This eoodu as re d +A inawnC)n nh expatri- ate civil sertants in the administration and on foreign teachers in the of the President's control over the Malawi Congress Party and to a. UI...C4. ~a . L L± .LL .U LAI.Ly J* ...JO _LAI VUL",1, Lia UJJW.LUUUAU LFU CL4 upsurge in local business confidence and has allowed attention to be U A.J LLLU UC.LOA V.L UUVUJVJ9iWUnLLI. .J -rIC.LCL.L J. a~ 1 i11i11iUU1, UL UJIV UI.,VLU JJt~LULJ, LPILU V.L6U"L %I. .LWAI W'. African Unity, the Economic Commission for Africa, the IMF, IBRD, IDA anu ±Vu. 1ne country now nas only Tnree dplomatic p)sts - _n WIV v.L. U.S. and West Germany. Until Rhodesia's unilateral declaration of inde- pendence, Malawd's relations with Rhodesia and the Portuguese autnorl- ties in Mozambique were generally cooperative, reflecting a pragmatic view of Malawi's geographic and economic dependence on these neighbors: Mozambique stands between Malawi and the sea, and borders on two sides, wnile Rhodesia employs over one-half of the regular wage earners or Malawi. Since U.D.I., however, Malawi has supported the moves to sanc- tion Rhodesia, encouraging its traders to find other sources of supply, and is providing assistance to Zambia's efforts to reduce its dependence on Rhodesia's transport facilities. II. STRUCTURE AND GROWTH OF THE ECONOMY Population 7. Malawi is just now in the process of taking its first popula- tion census, so there is no authoratative estimate of the total popula- tion or its growth rate. However, two comprehensive surveys made in 1962-63 indicate that the population was then about 3.75 million, and that the growth rate was nearly 3%. This rate seems plausible on the basis of better documented studies of population growth in neighboring countries and of the comparatively low incidence of malaria, usually the main factor in the African death rate. It is clear that Malawi is one of the most densely populated countries of Africa, with probably more than 110 inhabitants per square mile of land area. Of the three regions of the country, each representing roughly one-third of the total land area, the southern region supports over one-half of the total population and is seriously over-crowded in many places. The Central Region accounts for about one-third of the population, while the underdeveloped Northern Region supports less than one-sixth. (See Table 3). Little is known of the age structure of the population, but on the basis of the 196h Voter's list (21 years and over) the male population of working age (16 years and over) can be roughly calculated at 1.1 million, of whom about 200.000 are emnloved abroad. Total rAular wna earning AmnyMent inside the country, including women, is recorded as only 131,000. There arp an Asti-mat-wii i_nmO Aqinrns nrd 9-n00 Eirnoensn res-JIent in Mqlnw- - 3- Resources and Production Trends 8. Malawi's main natural resources consist of its generally good agricultural land and abundant quantities of fresh water. Some mineral deposits (bauxite and rare earths) have been identified but are not yet economic to exploit. Timber now covers only 25% of the land area, and most of the remainine forests are reouired for watershed protection, with little other present commercial value. 9. The country's very heavy dependence on primitive subsistence avriculturp acnounts for it.q ow nvrmap Ipvpl of npr nanita outnut: of a total domestic product estimated at 658 million (in 1965) the subsis- tepnceP sector accontsn.. for a-rouindl )iO-l/ M iz ±sby fnr t.he most import-_ ant subsistence crop with total output estimated roughly at 900,000 tons annaly11 Cmmorial aericul+ur a ntooun+.a fr n"nd 170 of DP an" nowr_ ly 100% of exports. The main commercial crops are tea, tobacco, ground- nnutsn an++ottn. WaZ+Mt+ proAuc+ion, VmMinlD1 pea") nasheW WvandAeA sM11 slowly over the past decade, with a fairly steady growth in tea output par Pea+ o Nf o+.n,-ys -+ an+n ,P a knnn Dc nh + e+ +h % ,+nn+ ^P 11~ _'iJ - ' . ~~I1. J"vp4 %J.L UWVL%~.%aV J4Y WLAIUl. U U "VI-V African smallholders has more than doubled in the period (see Appendix Table nN an n ac, tioJA _L. L=". 4 . VID U. U-Ur CZ0.~ C% %31LL %gain ". 1954. Manufacturing, construction and public utilities together account .u o" a r ounu up "J.V ur, ruLLc.Le services account ur anohUer LVpa, WJuLI transport, commerce and other private services making up the remaining . From 19>u througn ±9yo1, tne real output or me monetary sectors of the economy grew at an average rate of about 5.5% while output growth subsistence sector was notionally estimated at around 30. In the next three years, administrative and political difficulties associated with the breakup of the Federation and agitation for independence comoined with poor growing weather (in 1963 and 1964) to produce virtual stagnation in the monetary sectors of the economy. The year 1965, however, witnessed a major recovery in activity, reflecting in part improved weather for most crops, but also improvements in public administration and business confi- dence resulting from the greater political stability achieved in the course of the year. The volume of commercial agricultural output in 1965 was over 20% higher than the 1961-64 average. * Indications are that activity also rose sharply in the other monetary sectors - probably by over 10%. Assuming a continued 3% growth in subsistence output, overall real growth was probably up at least 10% in 1965, making the average from 1961 through 1/ This implies an average annual per capita income of about 15.6 from subsistence activities. This may well be something of an under- estimate relative to subsistence income in other countries. Per capita values for East Africa, for example, average about ,7.5 annually. However, even if this higher figure were used for Malawi, it would bring total per capita income up to only $46. 1965 around 3.5% annually. In 1966, preliminary indications are that ov overall agricultural output remained at the record 1965 level, and that the other main sectors continued to expand at a healthy rate. TAhlA 1 ESTIMATED VALUE OF OUTPUT 119o3 pr*ces;j (196 pri(e million) Commercial Agriculture 5.40 7.00 7.00 9.2 African ag,.c,V (2.50 (320 (3.0) . Estate ag. (2.90) (3.80) (3.30) 3.7 tion, Public Utilities 3.48 5.52 4.72 5.5 Iranort aLu Communication 1.83 2.78 2.76 3.1 Commerce and non-public services 5.98 8.76 8.65 9.6 Public services 2.58 4.11 485 ).2 Total Monetary GDP 19.7. 28.17 28.10 32.6 Subsistence sectors 15.92 19.67 21.58 22.2 Total GDP (factor cost) 35.19 47.84 49.68 54-.3 11. Pricn changes have been very moderate in Malawi over the nast decade. The rate of price increase between 1954 and 1965 in the money .pctor of thp Pnnnnmy was under 9 annnully The main element. nf stabi- lity has been in average export prices which were, if anything, moderately lowary in 1Q96-6 than they weroe in +.ho mid-19Q5t All other nricn have gone up on the average by around 2.5% annually, reflecting in - Jnifican+ manncznv" c h c, n nP**J jJ. Phno 4+ c mm + likely that Malawi's terms of trade deteriorated somewhat over the period. soA Ur.ce L averag LJut VVJ IJCLLQJ"LOY/ L ofilc GDPW.L GPua iVn 113soa wiL. 1 5. source averaged about 4% of GDP in 1961-63 as compared with 1954-57. Trends in National Expenditure 12. Malawi's national expenditure has been maintained at a level significantly higher than its national product ever since the early 1950's by external transfers, first from the Federal Government, and more recently from the United Kingdom. On the basis of rough estimates, these grew from around 6% of GDP in 1954 to around 1% (L9 million) in 1965. These transfers have helped to support a level of imports some 60% higher than the level of exports in recent years. Imports of goods and net services are estimated to have risen from around 30% of GDP in 1954-55 to 35% in 1961-63. Export growth was slower than GDP growth in this period, with the ratio falling from 24% to 22%. In 1965, exports increased by 20%, but imports went up by over 40%, as the result of the resurgance of business confidence and general economic activity which took place in that year. In 1966. both exoorts and imports were running about 10% over the 1965 rate. In 1964, the deficit on current account (before oublic transfers) was less than the total capital inflow. so that net external assets apparently increased by around L3 million in the year. In 1965. canital inflows roughlv balanced the deficit. (See Tables 23-28) 13. Fixed domestic investment averaged about 15% of GDP in both 19Qh-7 and in l9r-1 hiit fill to 12O in 1QA9-6h. However, indications are that in 1965, the investment rate recovered sharply to 15% again. Public seorr aital forma+tn (indini n-ovrnment enternrise and corporations) has typically accounted for around two-thirds of total fixed inVnQ+Mn1+ +W"nnl"11 I+ +V, T P-ii Pam '.d a zkA *, yniliin in 1961 to L.0 million in 1964 as the result of the cautious attitude of ~~ ~JJGoirej uen J.II1 U ±LIV IIVW UuLvt. ; IIL U AIV ..L 1 J II difficulties in gearing up for an expanded effbrt but managed to increase VJIV -LVC .' V aJlUUU f). _I±LL L I I -L7U_?o 11Me UUIL.L J LT"A IiIL, 0 'q jL tal expenditures (which account on average for about 80% of total public vuays), have Uown a prouounceu iCreaSle during r UcU-b y _LIL UUULCLy on agricultural development and transport facilities (both of which have J~~LL J4II ILU .LAI J.06k.L..L.UC.L_ ~LI sm J__IU.Ut.L j±.J.L L4I.J VVVjJ~V.L C.IU. %A",.- tion, and a comparative decline in housing, urban development and admin- . ative Uv U .L 1 uk. ILLJ.Lt:O I CLIU ;LUI .L1VU WiIZLU vy VUVMiJIIILU aUV- prises and public corporations have been important in transport (Central B.Lric an R--ZiVj EUIU _Ui UJrULd.L (CPowe1". .4 Most privaue investment nas oeen carrie out oy expatriaue firms or individuals, although recently a few African enterprises have emerged. The main elements consist of planing by the European estates, tea and tobacco processing, small-scale manufacturing, road transport - o - t a aand commerce. Total private fixed invest- in ly5y, when it reached L.5 miUllon, alter which it fell to a lar of 1.5 million in 1962. By 1965, however, two or three private Tr)jects of comparative importance were under construction in sugar devel rinent, textiles and distilling, with the result that total private outlays probably recovered to over 13 million in that year. 15. Inventory changes have been of some importance in the overall level of investment during the past decade. The most important result from changes in agricultural stocks reflecting the relationship between production and marketing conditions in a given year, and from inventory changes in finished goods which tend to reflect changing estimates by private traders about the short-term economic (and political) outlook. The latter was apparently of particular importance in 1964 and 1965; stocks were evidently run down in the former year in view of the uncer- tainties surrounding the transition to independence; but in 1965 they appear to have been built up both because of the recovery of business confidence and because of expected trading difficulties resulting from Rhodesia's unilateral declaration of indepen,dence. 16. The national income accounts!/indicate that domestic investment has moderately exceeded the current deficit on goods and services in most years since 195h, so that domestic savings have apparently been generally positive. The average domestic savings rate declined from around 8% of GDP in 195h-57 to 3.5E' in 1958-61 and nil in 1962. Since then, however, there has been a moderate recovery to around 3.5% in 1963-65. Table 2 TNVESTMENT, SATTATrQ AT ) tED [PTMPPATT MAPV P PP9TrVq (5 million) estimates) 1954-57 1958-61 1962 1963 1961 1965 Fixed Investment 5.4 6.9 5.5 6.9 6.6 9.0 Inventory change U.4 U.6 0.6U . 1. . Total investmrent 5.L.5 61 7. . 1.0 Balance on G & -2.9 -&.9 -6.3 -.5 -h.5 -8.8 Domestic Savines 2.9 1.6 -0.2 2.0 -1.1 2.2 GDP 36.0 46.2 51.6 51.8 52.2 58.0 Savings rates 7.9% 3.5% -0.1% 3.9% 2.1% 3.8% 1/ Estimates up to 1963 were prepared by the Central Statistical Office in Salisbury; estimates for lYb4 and 1905 have been prepared by the Mission. See "National Accountsand Balance of Payment of Northern Rhodesia, Nyasaland and Southern Rhodesia 1954-63, Salisbury, july 19L. See appendix Tables 6 and 7 for further detail. -7- 17. Central government savings have been increasingly negative throughout the past decade, with the current deficit averaging over + 5.0 million or nearly 1l GDP in the past several years, There have been moderate surpluses in some of the public enterprises, (averaging about B 0.8 million) but it appears that the main part of domestic savings has originated in the private sector. Much of, these probably consist of reinvested earnings of private enterprises!/ in agriculture, manufacturing and commerce. But there has also probably been a fair amount of small personal savings. This is indicated by the currency hoardings, which were discovered to be quite large at the time of the currency conversion in 1965. 18. The declining trend in domestic savings between 1954-57 and 1962-63 was a reflection of the rise in the Government's current deficit. This, in turn, resulted mainly from a large rise in current expenditures. However, this rise was from a very low level, and even in 1963, per capita expenditures on rovernment ronsimntion in MalaTxi (then still Nvasaland) were only one-third of the level they were in Northern Rhodesia (now Zambia), onp-fi fth nf thk Sout.'nrn Rhodeqian level_ and two-thirds that of East Africa (Kenya, Tanzania and Uganda). PER CAPITPA G0VFOT7JTR11 C.OT\TCZTPTO\ ConsuInp2,on Population Expenditure k J L LL .Y) k __LL.l__ iI Nyasaland 2.9 10.3 3.7 2.u Northern Rhodesia 9.5 28.9 3.5 8.3 Southern Rhodesia 10.0 43.0 .0 10.Q East Africa 69.6 96.3 25.6 4.3 Trends in the Government Budget 19. From l9>-55 to 1962-63, current government expenditure went up 150% while current revenue rose by only 75%, with the result that the current deficit rose from B 1.3 million to about B 5.5 million or over lCrO of GDP. In 1964, the first year of independence, total current expendi- tures were reduced moderately in an effort to bring the budget closer to balance, but the austerity measures helped to produce a political crisis 1/ The bulk of private enterprise savings probably should be attributed to non-nationals (mainly Rhodesian). However, no estimates are available of transfer of investment income within the former Federation, and consequently the estimates of factor income payments (to abroad shown in appendix Table 6) are almost certainly substantially understated. in September of that year, and also began to affect the Government's ability to retain expatriate civil servants. Most of the cuts were, therefore, restored in 1965, and total expenditures were permitted to rise by 11% in that year. A further 11% rise is estimated for 1966. The major part of the increase in these two years has taken place in interest and pension payments, education, agricultural services, health, and general administration. In 1965, total current expenditures cor- responded to 23% of GDP at market prices. Of the 1965 total, the main economic services (agriculture extension, road maintenance, posts and telecoms) accounted for 27%; education for 151; health for 8%; police and defense for 15%; ordinary pension and interest on debt 12%; and general administration 18%. 20. Since 1962-63, revenues have increased faster than both national income and current expenditures. The ratio of revenue to GDP went up from 13% in 1963 to 15% in 1965, and the deficit declined in the latter year to 11.6 million. With revenue estimated to grow at just about the same rate as expenditures in 1966, the deficit is likely to rise to around Lq_2 million this vpar- The most dvnImiic element in revenue growth during the past two years has been customs and excise duti-ps- whinh nrnniintPH fnr nP_hirrI nf tntnl rovpnnie in 19(Iq_ This category increased by h5% between 1964 and 1965, or just about in line with the imnca in thei valueii of imrtsr+c W. wv i1QAA sonme in- creases in import duty rates were introduced, and the flat payment of Vin n rv-v - ^ svnny 'kr D1,Ac- In n.,l n o I n - siP- A i +4 ' o Ta a 's -".m In^A 'k-ir standard duty charges, with the result that a further 20% rise in duties i a a,,nn4-A ., f 1 fCw 4 ------ - - 4-A 4 v_ ,vrf v'+ " Ima?l l Direct taxes collections fell in 1964 as the result of the poor crop kIIICL.L.LA4,~Y W::CL/ _UI VJLI U ".L JUUV J.7 W;; . L I~ U Llc L' V-L' 1962-63 level. Receipts from this source are conservatively estimated in 1U96 au just abouu te 1u5 level (when they were about 3O0S of total revenue), but may well turn out to be significantly higher as the result of improved incomes in 196>. Certainly by 1967 a substantial increase should take place. The other main revenue item is receipts from govern- meat services k)U/0 V e total), wXIch nave risen by arounu 7/ annually in the past few years. 21. Between 1962-63 and 1964, the capital expenditures of the Government rose from an estimated L3.2 million to 160.2 million, with the entire increase consisting of debt repayment and compensation pay- ments to retired expatriate officers. Development outlays actually dropped slightly -- from ;2.8 to 2.7 million. In 1965, financial charges (including a LO.5 million subscription to the IF), remained high, while development outlays went up sharply to J-.6 million. A further increase in development expenditure to T7.6 million is budgeted for 1966, while financial charges are estimated at 1.7 million. Thus, the overall budget deficit has risen from around 19.0 million in 1962-63 to 112.0 million in 1965, and an estimated T14.5 million in 1966. The bulk of these deficits through 1965 has been financed by grants from the U.K. These reached a peak of L10.0 million in 1965, and are estimated at L7.0 million in 1966. External borrowings (also mainly from the U.K.) - 9 - averaed L1.5 million in 196h and 1965. and are estimated at nearly 1,4.0 million in 1966. Domestic borrowings, which have been small in the past. are projected at L1.0 million in 1966. A L2.0 million draw down in the Government's external cash balances is also estimated to be neces- sary in 1966. if d&vPlonmPnt Pwnpnditures rach the budat-ted amounts. However, a shortfall of around U1.0 million seems likely in the latter. Table 4 SUMMARY OF GOVERNMENT ACCOUNTS fET s .L7-?V-;7 .L7WC_-W_' .7WL4. .L/'-j) . '' Current Expenditurea/ 8.0 12.5 12.3 13.6 15.1 Revenue >.3 6.9 7. 9. 9.9 Deficit 2.7 5.7 T4 5.2 Capital Development expenditures 2.3 2.8 2.7 4.7 7.6 Financial chargesZ/ 0.2 0.4 3.4 2.0 1.7 Overall deficit 2 . 10.9 12.0 Financed by: Grants 2.8 7.3 8.3 10.0 7.0 External loans 1.3 - 1.2 1.8 3.9 Domestic loans - 0.5 0.1 0.2 1.0 Non-recurring revenue 0.1 0.2 1.4 0.1 0.6 Other 1.0 0.8 -0.1 -0.1 2.0 a/ Repayment of debt and compensation payments are included in financial charges. Note: For details see Appendix tables 16-19. The Overall Financial Situation 22. Comprehensive financial accounts for Malawi have been available only since the currency conversion (from Federation to Malawi currency was completed in mid-1965. As of that date, the total money supply amounted to L 10 billion or about 17% of 1965 GNP. and foreien assets of the banking system to E 7.1 million. In addition, the Government and various nublic entities still had about i 2-n million of foreicn aets (net of sinking funds) at that time, making total external assets equal tonn rnnnth.q Imprurts_ at. the 196 -rat. Act.wYnn Mjed...1' Anti miri-IQ66 - 10 - there are indications that these assets were drawn down by between L 1.0 and t 2.0 million. 23. Some longer-term financial indicators are available from the statistics of the two commercial banks in Malawi (Standards and Barclays, both branches of U.K. banks). and from data on the Post Office Savings Bank- Demand deposits in these banks hardly increased at all between 1961 and 1964. while the economic recovery in 1965 is evidenced by a 20% increase in that year. At the same time, fixed and savings deposits in the commercial banks grew from around L 2.h million in PArly 1962 to around E 3.8 million in early 1966, while deposits in the Post Office Savings Bank grew from E o-6 million at the enrr nf 1Q0 (nrlipmt antp available) to L 1.1 million in early 1966. Advances of the commercial banks have exnandpd sharply or +.he ned from . 1 million in 1oA to L 4.1 million in early 1966, This probably reflects in part a shift away from direcr-t. 'hA?'rTn& fyrm thea HeA Offic-,e efP +hpam P +.xn more important customers as well as the expansion elf activity in 1965-66. Tn the- latte pei+Ihe,dctono-netoyicese h expansion of private investment in manufacturing tend to be confirmed by the inc that m-t of the credit expannsiton wans t mansuac.tng and d- bution enterprises. - 11 - III. DEVELOPMENT PROSPECTS 24. Starting as it'does with a current account budget deficit cor- responding to nearly 10% of GDP, and a current balance of payments defi- cit of nearly 15%, Malawi clearly faces a long, difficult path to full economic viability. However, the country does have the potential to ap- proach viability within the next 15 to 20 years, provided it manages its affairs with imagination and prudence, and provided that continued ex- ternal assistance is forthcoming on soft terms for an extended period. Agricultural Prospects - General Considerations 25. The main notential lies in ariculture. Although much of the good land in Malawi is already heavily populated, there are important possibilities for further expansion of cultivation. Of the total land area. of 23 million acres, it is estimated that 13.0 million are possible for cultivation. but that to date only L.3 have been cleared for agri- culture. 1/ No comprehensive evaluation has been made of the quality of the remniTinc 87 million inclvad but 1n..ih1e" icares. A aood part of this is undoubtedly marginal land by comparison with that presently iirdimr ci-IultAion. Howevr, it is lenotrm that+ a significant. porticn does have good potential, including parts of the Shire valley in the extreme - gion. To develop most of these areas will, however, require significant -nil tVulld rI-ZCUt:1 dV,1-.UU_LUUV.i_ PJutwiiii-al P.AULJC&.LJ.Ly .L_L Q JLA AA land already under cultivation. Most of this is quite fertile and has rel-ible rainI-fall, ut produs ve ry low y.:Ids atU prsnVecueo the extremely primitive farming methods used. There are excellent pos= siuilities for achieving substantial Increases in yields, with compara- tively small investments. The growing responsiveness of the Malawi farmer to cash incentives is another very encouraging element. Tins respons-iLve- ness is indicated by the rapid growth of output in small-holder production of tobacco, cotton and groundnuts in recent years, anm by shifo amung these crops when relative prices change. (For example, good prices for tObacco and -Less satisfactory prices for grounanuts were an importanu factor in the record output of tobacco and in the comparatively modest crop of groundnuts in l905. In 1966, when price relationships of these crops were changed, groundnut production recovered sharply, while tobacco was held down.) 27. The Government's efforts to improve marketing facilities kmain- ly through the Farmers' Marketing Board) and to improve agricultural ex- tension have made a significant contribution to the recent growth in agricultural output. Use of ox plowing, fertilizers, insecticides, and improved seeds, though still on a small scale, has.. undoubtedly helped 1/ Estimates by Wilmat and Lovatt, Malawi, Ministry of Natural Resources, February 1966. - 12 - to imDrove vields in tobacco. cotton. and Proundnuts. However- the no- tential for these techniques will remain limited in most areas until changes are made in traditional forms of land tenure and land organiza- tion. Virtually all small-holder crops are grown on communal lands, so there is little numer.hip incentive tn im-rove iriviaml holdingsC The bulk of each holding, averaging 4-5 acres, is devoted to maize, and only a small part t^ nch ops% Most pnoing 4 Aon by hand and h) type of planting often favors erosion. The most effective approach to these problePrm- found to Ate. -in Mnanla4 hasp been aperaiaino existing holdings and planting patterns in a way which limits erosion andi facl-tte~s ^Mr -3loT.Ting nd oth" --oved -orms 0of culivatio;n. Several schemes of this sort were tried in the late 1950 s and produced "colonial" administration, they created resentments which led to their IaIa..Ja ~J -IA .LJ.7~J_J-.7UV, a nmbe WItUI 04 . L.LUKtge LUrJiUIK -L4,UUV atk.L_Ub L quested a reorganization of holdings, after studying Government-spon- ored demuuonsratio plots. 1h bucCU5. 01 thee InitIal efforts ha led to the development of a large scheme designed to cover 500,000 acres til %n vIEU negion, under which land would be reorganized on an op- timum basis and permanent titles given to the farmers. A UN Special Funu grant nas been approved for the detailed studies, which will be supervised by the Bank's Agricultural Development Service and the FAO. rresent tentative hopes are that the project can be carried out at a rate of 50,000 acres or more a year. 28. Opening up new areas for organized land development, both by estates and small-holder, also offers promising prospects. A new sugar estate development is already under way in the lower Shire valley. A tobacco grower scheme consisting of medium-sized farms for Africans has also been started at Ka.sungu, but at a comparatively high cost per farmer. Other more economic possibilities appear to exist for expanded cotton development on presently undeveloped lands in several areas. Given im- proved roads and water supplies, a. fair amount of spontaneous land settle- ment on traditional lines will also be feasible over the next decade. Prospects for the Main Smallholder Crops 29. Given reasonable progress along the lines indicated above, there is good reason to expect that a rapid growth rate can be main- tained in small-holder production over the next decade or more. The most important of the small-holder crops is maize, the chief subsistence crop. -Unless increased maize yields are increased.most of the other small-holder crops will tend to suffer, since there will be an expansion of acreage of this crop at the expense of others. Of the 3.2 million acres presently under cultivation, 1/ about 2.5 million are used for maize. Averaze maize vields are very low - arnrn 70n lbs. pier nre per year. If present yields and per capita consumption standards were to remain unchanPed_ the area under mai,e production nuld hav to +bn 1/ Of the 4.3 million acres cleared for cultivation, approximately 1.0 Tnillirm ny-.m -;v - 13 - increased to 4.5 million acres by 1985, at present population growth rates. This would almost certainly slow down the growth rate of ex- port crops. However, with improved techniques (early sowing, weeding, improved seed and fertilizer use) maize yields on most land can be in- creased to between 2,000 and 4,000 pounds per acre. Given a major ef- fort to educate the farmers in these techniques (especially in areas where the farmers already are feeling the pinch of the land shortage), it should be possible to achieve a significant increase in average maize yields over the next five to ten years. Indeed, there is no reason why maize exports should not become of some importance in this period. There have been small net exports in recent years (16,000 tons in 1965). Ten- tative projections by officials in Malawis Ministry of Natural Resources indicate that an export surplus of between 100,000 and 200,000 tons might well be possible in the 1970's. At 1965 unit values for exports, this would yield between E1.5 and 13.0 million, as against f250,000 in 1965. 30. Tobacco, now predominately a small-holder crop, is Malawiss main export nommodity Production reached a record level in 1965 of 50 million pounds (of which 41 million were produced by small-holders) as compared with an average of 36 million pounds in 1958-6h. Exports amounted to 38 million pounds in 1965, and export values reached a record level of L 5.1 -4iion or 40% of total exports in that year. Technically it would easily be possible to maintain or exceed the 1965 output level, but the world rmarrket will absorb larger supplies only at sharply reduced prices. The major part of Malawi's tobacco output consists of a dark fire cured varity. Malawi is the world's second largest producer of this type (after the U.S.) and the largest exporter. It is used in pipe IreLsLU chmewing tobaccos, SA-ff and roll-your-own cigarettes, primarily in West Africa, the U.K. and Ireland. There is little prospect for any increase in demand. A moderate increase in sales of other types of tobacco may be possible, but it is unlikely that the 1965 export sales for total tobacco will be reached again before 1970. After that, a very slow unward trend might be possible, especially if efforts to improve quality are sustained. 31. Groundnut exports more than tripled between 199J-37 and 1962-65. In the year 1965, they were third in export value at E 1.6 million. At '2 million pounds, the 196crop was the second largest on record (1962 was 72 million), but lower than expected. One reason for the shortfall in 1965 apparently was that much acreage originally planned for groundnuts was used for tobacco in the former year, because of good prices for tobacco in 1964 and because of marketing difficulties for -groundnt ts which arose when the purchasing was turned over to government-sponsored cooperative societies which often did not pay the full amount of the guaranteed price to the farmers. On the basis of this experience, the role of the cooperatives was severely curtailed in 1966, and substantially larger acreages were planted to groundnuts. The 1966 crop is now estimated at 68 million pounds, with an estimated export value of E 2.3 million. It would not seem at all implausible that groundnut output could reach 100 million pounds by 1970 and 150,000 pounds in 1975. Practically all Malawi's groundnuts are handshelled for export and claim a substantial premium as confectionary nuts. A continued rapid expansion of output may - 14 - reniire thp intnr-iAntin of machine shelling for nrt of the crnp, With a consequent reduction in the premium. However, even allowing for this runm -i' +nr tvr P-mw +_'60 elr1 Z f^." aa=71 4-n 'h em"a "nx-1 -r.r%V1A vina,- Ii0u'rA1 for oilseeds, the value of exports might well reach E 4 million by 1975. 32. Cotton has probably an even greater longer-run potential for ~ ~.Lo Y~.~ J.U' .L%A LAL 11V0 U L. V11K-, %,oL4.11W L.L, O V~~alJ.L." l"±... 0J.JL4\JWJ pounds per acre, but with the use of insecticides which have recently been M&U-L-dUCd, Y-LA-1GI inL SUMe altabs Ore; up AO Ub 111UL;11 tj -L,CVV JUUIUO*. ±U LCL.L output has more than tripled since 1954-57. A similar rate of increase seems quite possible over the next decade. A moderate Lail In price 16 expected, but export values could easily reach L 2.0 by 1970, and L 4.0 million in 1975 (as against E 1.5 million in 1966), even azter allowing for a significant increase in local consumption by a textile plant now under construction. 33. Pulses became a significant export item three years ago, after the FMB started to buy this crop, and have risen in value from less than L 200,000 in 1962 to L 800,000 in 1965. The main markets are South Africa, Rhodesia and Ceylon. On the basis of the recent trend, it would not -seem unreasonable to project exports of around t 1.2 million or even more by 1970. 34. Other small-holder crops with export prospects include rice, coffee and cassava. There are excellent rice growing areas in the extensive swamps around lake Chilwa, where about )4,000 tons annually are now produced, of which about 2,000 are exported to neighboring countries. With minor irrigation works and improved agricultural extension, output could be increased quite substantially. Malawi government agricultural technicians project an export surplus of 18,000 tons by 1975, which seems quite plausible. Cassava has a market in Europe, for use in animal feed, and some expansion over the present low level (4,500 tons in 1964) should be feasible. Coffee production and exports have averaged about 190 tons in recent years. A planting program now underway mainly in the Northern Region should lead to an export surplus of around 2,500 tons by 1975 and 4,000 by 1980. There are also important possibilities for increasing fish production and livestock products. Most of this will be geared to the local market, but with the improvement in transport facilities. sianificant exports might eventually be envisaged. Estate Crop Prospects 35. Tea is Malawi's major estate crop. Acreage under tea has expanded from 2q-000 in lqoC, to A),_nnn in 1Q6q and hpPrina anrease went from 22-000 to 28,000 in the same period. With rising yields, output rose from 17 mnil nin -nmlo 4n 10CO +n T m411nn in 10 T Thi -nq fnllnrpr hv fniur years of stagnant production at around 27.6 million pounds but in 1966, of past and present planting rates, Malawi should have 34,000 acres of o rise, ou s-houl be an 37A million pounds in 197 and mirmio 5'~ WLE -~J .L7 fW CUO.MALJI,d. -'J _LZJf -o J/ - ''~~. - - - - to rise, output should be around 37 million pounds in 1970 and 44i million i195 " oevr to aciv - ~ ~ '"~ --ahaet= Ln _71_* "WVV.L_ W cA" VIZ 111UDU PdLCUVL11 ACLUV0, UJL1L ~.1L1 I~V LJL U . - 15 - lands by subsistence farmers will have to be stopped. Legislation was enacted in 1965 to permit the government to take firmer action on this delicate point. World prices for tea are expected to drift downward in the next several years. However, Malawi growers can to some extent offset the effects of this by continuing their effort to improve quality. Assuming a. price of 30 pence a. pound, the value of exports by 1975 might be around E 5.5 million, as against E 3.8 million in 1965 and around E 4.1 million in 1966. 36. Tung oil has been produced in small quantities in Malawi for some years with an export value of around Z 300,000 in 1964. Little increase is expected in volume or value of this crop. A more important prospect is sugar development. A 5,000 acre estate is presently being developed in the Sire Valley with a target of 25.000 tons by 1970. This would meet local requirements, leading to import savings, of around E 1.0 million (assuming a C.I.F. price of L ho per ton). If Malawi could get a sugar quota (e.g. under the Commonwealth Sugar Scheme) expansion of out- put for exnort would be nossible- but in view of the nresent world surplus situation, this is an uncertain prospect. 37. For the somewhat longer run, forestry development offers the possibility of substantial expansion both for domestic use and exnort. About 5o,000 acres of pine and cypress have been planted over the past fi ftp.pm yeanrs, andr n w beg -ufi-nni-ng tontrbt to local bildeing, supplies as the result of thinning operations. However, with a 30 year roaton i- take another 20 yasto reach pouto na utie yield basis for timber purposes. A somewhat nearer term possibility is have have now been planted, and a planting rate of 10,000 annually is wj AE Al J V VI YKG" . -4 pyL-6 r,.-uUU" UUL. L>I- wile production could commence. The total projected acreage of 88,000 would ~~~~~ t~..± ± i c) Sus ClLi CL Juki± L' U I.11 PCJ.L- UCL .yLU-,. 1' PUULj) piJ.CuLue Curos exportj'~± value would be around E 5 million annually at full production. Detailed fibiit studies± of' thi project are no±w bJ7JUI, Le±ig un-d'eruak--ii~ VJ.LU11 11V-LSP from Canadian technicians. Summary of Export Prospects 38. In sum, the value of Malawi's exports could well rise to around Ci .0 milion by 17U, as compared wIn the U 12.7 millon average of 1962-1965 and an estimated E 15.8 million for 1966. By 1980, the total could reach E 0. million, assuming that tLe pulpwood project were in production by then. The annual average rate of increase would be just about 7% over the 1962-1965 average, a.s compared with -an o7 average growth rate recorded in the preceding four year period (1958-61 to 1962-65). Table: 6 Summary of Export Projections 1958 61 19 2t, 8 1970 -975 1980 Tea & Tung Oil 3.7 367 .4 5.1 5.8 6.8 Groundnuts 0.5 1.5 2 3 .8 4.1 5.5 CnitAn A. 1. a*1 a*9 3*9 6.7 Pulses 0.2 0.6 1.0 12 1.5 1.8 -az Csaa010.3 0.14 a.* 2. _10 Rice & Coffee 0.1 0.1 0.1 0.4 1.1 2.0 Total f aeove 8o n 11.7 1si3 in 25lawi..9 fr m d s i now u nderw'. noi a .L vaLLr_ I -L_) ki . 2- ,IC U 4Ve.U See Appendix Table: 25A and 25B for more details H~ining and Quarrying 39. There is no mining production of significance in Malawi. A systematic geo-chemical survey, the first intensive survey of the country for mineral desposits, is now underway. The largest known deposits are: bauxite and phosphate in the Miange mountains, "rare earths" near Zomba (the second largest known deposits in the world),and sulphur in the Central Region. While substantial reserves have been proven in these cases, commercial exploitation has not yet been found to be economic. If and when a wood pulp manufacturing industry is developed, its demand for sulphuric acid could lead to the development of sulphur deposits and make local phosphate production for fertilizers feasible. Quarrying is limited to stone, limestone for local cement production, and clay for brick production. Manufacturing 40. Agricultural processing industries dominate the small manufactur- ing sector, which accounts for around 5.5% of GDP. Processing industries at present include 32 tea factories, 2 tung oil factories, and many tobacco curing and grading establishments. The tea. industry is the most capital intensive, its fixed investment (plant, machinery and equipment at current prices) is estimated at about E 6.7 million which represents well over - 17 - one-half the total fixed asets in mnnufqrturinr. qeveril ornin mills- saw mills, abbatoirs, and oil processing plants produce supplies mainly for local cor)nsmption; rnmt. or t.hese arei inefficient salihet characterized by uneconomically small scales of operation, undercapital- i .n+ - nA H-;r cyk 1 M +k^vov net output at constant prices increased at an average rate of 5.8% per annu "fro '100. to '1962 butl V^e1 by- about, 10ne - " _ -K -4A 196). because of a reduction in processing associated with the low tea crops of +1 - -__ 3 - - fb.',C. 0 CLAA Ur,%,CUOU~ L ILhUe gGnlra reU-Ue0n Ca4uO-d 10,y 1-4he uncertLua-intm surrounding the dissolution of the Federation and the transition to I - -r- n r%! Z. . r' 4. _ __ - ~ .. -..4 ±iuependenZI±e. £-11 _LU,) ±indicatin are tl.a.t' I[RdX1ULd,UU'U.L1gW a(.UJ_V±UY recovered sharply - perhaps by around 15% or more,judging from increased sales Of electric power to manu-acturing consumers (20o) and tue large increases in commercial bank credit to this sector. 42. Although Malawi's market for manufactured goods is clearly quite limited, the fact that virtually no manufacturing actually exists at present outside of agricultural processing, means that there is undoubtedly some scope for reasonably efficient development of light manufacturing for import substitution. Moreover, if agricultural exports - and incomes - can be expanded at the rate which seems feasible, there will eventually be at least moderate scope for the development of somewhat more sophisticated types of manufacturing. The Malawi government's policy of encouraging private enterprise in manufacturing should help to facilitate this develop- ment. While comprehensive legislation has not yet been worked out, the Government is prepared to provide on an ad hoc basis, tariff protection and exclusive industrial licenses for reasonable periods of time. In addition, accelerated depreciation, and reduced or rebated duties on approved capital goods and perhaps locally unavailable raw materials are negotiable. Profits are taxed at the rate of 37.5% plus an additional 22.5% on undistri- buted profits not reinvested within three years. 43. The Malawi Development Corporation (MDC) was established January 1964, as a statutory corporation with a non-official board appointed by the Government to be the principle instrument for public stimulation of the manufacturing sector of the econony. Its initial capital is E500,000 and it is empowered to operate through loans, grants, equity participation, advisory assistance, or wholly owned and directly managed enterprises. The first important project sponsored by the MDC is a f 1.2 million textile plant now nearing completion near Blantyre to suiply domestic needs. This is a joint venture with the Commonwealth Development Corporation (CDC) and David Whitehead Ltd. participating equally with the NDC in the equity. The plant is scheduled to come into operation on a one-shift basis in this year. and reach two-shift oneration in 1967- MDC also has a variety of smaller industrial ventures underway, including a gin distillery, meat and fish marketing, storaen and nrorPqinP comanies. grain mills. a brewery and a hotel project. All in all, a fairly rapid growth of secondary manu- fAPt1rinrr ntivi+.y frm its. peent very Io 'an em nrobable over the next decade. - 18 - Construction 44. After growing in real terms at the rate of 10L% per annum between 1954 and 1959, the output of building and construction sector fell to a. 1964 level around that obtained in 19 5, while employment was down to 10,000 from a peak of 26,000 in 1958. This reflected both the general recession of 1962-64 and the tentative decision of the government to move the offices of Government administration from Zomba and Blantyre and c consolidate the capital of the country in Lilongwe. This led to a virtual moratorium on badly needed public building in 1964, pending economic investigation of the new capital project. This study is now completed and the Prime Minister has announced his decision to proceed with it, but no date has been specified. In the meantime. construction activity has picked up very substantially with the recovery of public and private investment in 1965. Capacity of the construction industry apnears to be ample at present to meet the needs, although occasional bottlenecks have arisen. However, it will have to be expanded substantially further if the govern- ment's investment targets (doubling the 1965 level by 1970) are to be achieved. EloEtrrn ner Federation. In the two main load centers (Blantyre-Zomba. and Lilongwe) demand - AA Al & 4.VVLI .LI ,'jL U%.J .)C- LIL-.L...LVJIL L WU _L11 -L;?V o Di ng4 te next I three years demand growth slowed down to less than 7% annually, but in 195, it went VUp b.y rV0 andL Li theU fvot quoatemr of. 166 wasi Up bY r25%1 over the first quarter of 1965. Total generating capacity consisting of hi1 os diouesl L"U remtairueu UU r1W ro 1Um Lyo tnrougn mid-1yoo when a 16 MW hydro project was completed at Nkula RLs. This station wil -Lead to a subsvantial reducoon in operating costs and permit tne Electricity Supply Commission (ESCOM) to generate significant savings where previousy 1 just about covered its operating costs. A third d 11 stage of Nkula. Falls should probably be started quite soon. Estimated cost s u 300,000 as compared with E 1.9 million for the first two units. 4U. ransport activity also picked up significantly in 165 and 196o with the general recovery in economic activity. Net ton miles handled by the Malawi failway went up by 156 in 1905 over a. very depressed 1964 level, and in the first quarter of 1966 wereup by 35% over the average of the first quarters of 1963-1965. New registrations of motor vehicle did not rise much in 1965, but in 1966 (first quarter) were -up to 750, as against an average of 550 in the first quarters of 1964 and mid-1965, with the major increase being in commercial vehicles. It is clear that a further substantial expansion of transport activity will be required over the next decade to handle the large prospective increases in export volumes as well as more moderate increases1n the other sectors. (The export tonnages under- lying the projections discussed earlier rise from an average of 100,000 in 1962-65 and an estimated 130,000 in 1966 to 250,000 by 1970 and 400,000 by 1975). - 19 - 47. The main roads presently under construction are the Karonga- Chitimba road along the upper edge of Lake Malawi and the Fort johnson- Monkey Bay road along the Southern shore of the lake. Both of these should help to open up comparatively isolated partsof the country for more rapid development. -Plans are at an advanced stage to reconstruct the main road from Blantyre-Limbe to Lilongwe, which is the most important single road connection in Malawi. An IDA credit for $0.5 million is at present being sought for the final engineering of this road. Plans are also being drawn up, with help from AID, to expand the feeder road system, which is a high priority requirement if the agricultural production targets are to be achieved. A number of other improvements in the trunk road system would also probably yield relatively high returns. 48. The Government is presently facing a major policy choice with respect to railroad development. It has just decided to buy out the shares of the private company which had control of Malawi Railroads and part of the trucking fleet at an estimated cost of around E 200,000. This was a sound move, as it will give the Government more freedom of action in making more efficient use of both services. At the same time, however, the Government is considering a proposal of the Mozambique authorities for extending the rail line which now goes from the port of Ncala to Nova Freixo near the Malawi border to Idwonde and perhaps beyond. The impact of such a move on traffic of the existing line could be severe, and careful study of the financial arrangements proposed by the Portuguese would be essential to determine whether it would be a worthwhile proposition for Malawi from an economic standpoint. It is conceivable that the new line miaht pay. if an imoortant part of the capital cost were borne by Mozambique or if it were to tie in with substantial Zambian traffic which mi-ht be re-routed away from Rhodesia. Summarv of nutnut Pronnets JcThip nhn-ap qAnn-r=1 nrviR AnaaPqt,. tint 'NhIwxi Cthoiild be able to achieve a growth rate in the monetary sectors of the economy of around 7! qnnuallv over the next five to ten years as comnared with one of around 5% in the previous decade. Realization of such arate will require continued onund mannngment of the Pronomy continued reliance on expatriate technical skills for some time, and an expanding rate of investment, su"nny.CIA ~ - ~M~ ~~' -n~-m~~ Avl ttrs Public Sector Investment Plans 50. In 1964, just after independence, the Government issued a. five year Development Plan for Central Government investments, relying to a considerable degree on advice of a UN mission which visited the country in 1963. Total expenditures were forecast at E h5 million for the period 1965-69, or an annual rate of L 9 million. This compares with an actual average for the Central Government development outlay of about E 3.0 million in the period 1960-64. As noted, actual development expenditures in 1965 did reach I 4.7 million and will probably reach about E 6.0 or E 6.5 million in 1966 (as against L 7.6 budgeted). Still, it is now quite clear that the original targets were unrealistically high. No formal revision of the program has yet been prepared, but a.number of the modified ideas of the Malawi development officials are reflected in the proposals of a U.K. mission which visited the country in 1965. This mission proposed an expenditure level of around E 30 million for the four years 1966-69 or an average of 1 7.5 million a year, which should be attainable providing finance is available. 51. The main elements of these proposals are - Table: 7 - Development Plan Proposal of the U.K. -Mission (1966-69) Agriculture (Mil E) Land reoreanization & settlement 1.0 Farm development 0.4 Dam construction 0.h Fertilizer subsidy 1.4 Other arnn develonment 0.2 Livestock and fish development 0.4 Trainin g 0.6 Forestry (including pulpwood) 1.4 All other o-6 Riih Tntona 3. Feeder roads 1.2 anerays -rvn nwh n 9. 0 '.S,a A.k .LI QJ.% "k 'I*tfl Ct 7.l Waterways 0.3 tAirways0. 10 Ua-L u-. I - 2).l) Education Primary 0.3 Secondary 2.3 Teacher training 0.8 Polytechnic and University 1.5 All other 0.7 Total 5.6 Industry and Commerce Malawi Development Corp. 5.0 Other 0.3 Total 5.3 All other 6.0 Total 30.0 52. One significant item excluded from the U.K. mission recommend- ations is allowance for exenditures on moving the canital from Zomba. to Lilongwe. Such a move has been proposed by the Malawi Government in order to Innent the ranital more centrAllv_ Tn the longer run. this might have useful social and political benefits. However, it would not apnear to be of piffininntv high nrinrity to mIdertake in the next five years. This seems to have been recognized by the Government, which 1n h Ia +Jmc4Pir+ PNria!lI -rvrl v4h wrvie +.na vhi'lm-n^n In 1 4 A nn+.4n in in a anmr significant allowance for it in its 1966 budget. 53. The World Bank mission is not in a. position to make any detailed . Cvl40..LVfI LJ U 1J Vil ji 9ai P ujioVu Ljy Vi Vol%.* ILLQQ.LUIi, VJUU .L Q U im-,LCX emphasis seems quite sound and consistent with the main sectoral require- rrants discu.,sed "n-+e 1joevr ee~ mpoe et 4-, +1 n O,,,va,,m,+ Ic 4 AVJ %lj &-%.IWLL V m &JWQ J.S 4 & '- ' -_ v. - MfA- A own development planning efforts give good grounds for believing that a. The main improvement consisted of the establishment in late 1964 of a MU"SuL-y u LeVUUPmn tlU XnLUUIVj ZUIU a I11n UVLILUo o a UdULn.LId± Development Committee chaired by the Mnistry of Development and including representatives of ouner key mnlules. ina committee is rUbponlve for reviewing all proposals by the operating ministries, developing new - proposals and ensuring effective coordination. mle staff of the Develop- ment Ministry services the committee and has recently been strengthened by recruitment of economists and sector specialists. Public Finance SQ. Malawi clearly will face a difficult financial position for some years to come, starting as it does with a current budget deficit in the order of a 5.2 million, and a consequent need for external finance to cover not only the current deficit but the greatest part of its capital expenditures as well. However, if total incomes can in fact be expanded - 22 - at the rates indicated earlier, it should be possible to expand revenues by somewhat more than current exnenditures. and gradually to reduce the current deficit. But even under rather optimistic revenue assumptions, comnlete elimination of the deficit is likely to take mn thmn A inlalp if an adequate level of public services is to be maintained. The Govern- ment hns rPtntIv nrrqnope to h.mav i two fiqnal enrts from the IMF make a study of its budgetary prospects, with the main objective being to "aek a means whereby the ravenme gap may be nhosd as early as qnnqible but in such a. manner as to give maximum stimulus to productive development". 55. One of the main prospects for revenue increases would seem to lie collections of this category averaged about 16% of imports (f.o,b value), this percentage to about 17%. A further increase to 20% over the next .LJ~LL ~a.L 0 0 a.L.~d.U U~J1~IJ.PLUUIrU UJ I-XZLC.WJ..L . AA.CQLI. VL'..L%0L0 * U-W-'.V' it seems very probable that import growth will slow down considerably in ULItz ±±-,JU .Lt:w yu4-i "L , Ub btIII PIUU_L U Pt~ UIt1; Vt-.y I±L,14 .LUVUJ LLI L7-.O and 1966 was in part due to restocking of inventories. Export taxes vO.Le aiuer pOUSeDi±ly, QUt a moVe U.eicLJnI way of aWJ.LVIIg VIJU same result might be for the FMB to set its prices so as to achieve a financial surplus in years when world prices permit this to be done wiUhUt reducing price incentives to the grower to the point of discouraging prod- uction. Estate profits can continue to be taxed relatively efficiently with income tax, and in view of the marginal nature of most estate product- ion (especially tea), no increase in these rates seems desiraole on thoe basis of present indications. However, some increase should be possible in the collection of personal income taxes (including the head tax which reaches the subsistence farmer, and actually provides some incentive to increase cash farming). All in all, it might be feasible, to increase the ratio of current revenue (including possible surpluses of the FMB) to around 17% of GDP in the next several years, as compared with a 16% ratio expected in 1966. This would correspond to over E 13 million by 1970 on the assumption of the growth rate indicated above, or a.h5% increase over the 1965revenue level of L 9.0 million. 56. Other potential non tax sources of domestic revenue include profits of the Central Bank (totalling around 1-250,000 in 1965), and a, social security (Provident Fund) scheme now being worked out which might produce surplus funds in the order of Z 800,000 by 1970. In addition, there may be a modest potential for government borrowing from the banking system in the next few years, provided the priority demands of the private sector for commercial credit do not come up to the full potential of the banking system for non-inflationary credit expansion. In the case of Malawi, this potential is still quite an uncertain quantity since banking data for Malawi itself (as opposed to the Federation as a whole) are not available before mid-1965. However, with money in circulation of around L 10 million, and time and savings deposits equivalent to another L 5.0 million.1/ it would seem plausible, as a first aDroximation, that total domestic credit could expand by around E1.2 million annually (about T% I/ Including the Post Office Savings Bank - 23 - of base year deposits) in the next several years, without putting undue pressure onimport demand or prices. What part of this might be required for private credit expansion is very difficult to judge, but as a tentative guess, this might be put at around L 700,000 leaving L 500,000 for the Government to borrow on annual basis. As noted, a domestic bond issue of L 1.0 million is planned for 1966. However, part of this will probably involve (and may already have involved) some sale of external assets. With external assets now down to around 4 months imports, it would be unwise for the Government to count on any further significant use of these resources to finance development. Thus, gross government domestic financial resources might be projected to rise from L 9.3 million in 1965 and E 11.6 million in 1966 (counting the L 1.0 million bond issue) to around Z 15.0 million by 1970. 57. However, current expenditure will also have to rise somewhat in this period. Education outlays are expected to rise by around 30% between 1966 and 1970, and a similar rate of increase should probably be allowed for road maintenance outlays and for current expenditures by the Ministry of Natural Resources for its work in agricultural extension etc. For all other current services, taken together, it may be possible to hold the growth rate down to around 3% or 4% annually in the next several years, especially in view of the rather substantial increase (9%) permitted in 1966. Interest on external debt will remain stable for the next few years while repayments will fall from L 0.6 million in 1966 to L 0.4 million in 1970. Ordinary pension and compensation Dayments to expatriates will rise, but most of the latter will presumably be covered (as they are at present) by snecial grants from the U.K. 58. On balance, these trends would result in a moderate reduction in thi non current. et fia 1cial lesovel b 190 anvA to nPt the in non current domestic financial resources available to help cover the denficit or tor finwan developnment.- ') -. rrojeceu Gurrenu Budgeu rosulou inu 14on1 Development Capital Transactions Mlion L Actual Est Projection 1965 1966 1970 Education, and economic services 4.0 5.3 0.9 All other current services 7.1 7.7 8.8 Interest and ordinary pensions 1.7 2.1 2.3 Total current expenditures 13.5 15.1 18,0 Total current revenue 9.0 9.9- 13.3 Current balance -4.5 -5.2 -4.7 Capital charges (non development) 2.8 1.7 1.7 Dept Repayment 1.1 0.6 0. Compensation payments 1.2 1.1 1.3 Subscription to IKF 0.5 Capital receipts 1.2 2.7 2.8 Domestic resources 0.3 1.6 aL5 U.K. grants for compensation b/ 0.9 1.1 1.3 Net Capital Receipts - 1.6 +1.0 +1.1 Balance of above -6.1 -4.1 -3.6 a1 Probably includes some use of external assets bJ It is not certain that these will automatically cover all compensation payments. Foreign Financing Requirements and Prospects 59. In December 1965, the U.K. Government agreed to provide grant bndgetary assistance to Talav in the amount of ..qj Triillion annuallv for theyearel966 through 1968, in addition to its continuing its special grants for expatr.iate aoacsand copnato,une hp rkqa.q Qhiop. whic-h, as noted, have averaged about M 1.0 million annually in recent years. Th TT TV +Um+ -P+ nn +IOA -fo+K 1R 4 e lf nan-mr niA 411 hp- reduced, although no amounts are specified for subsequent years. However, .L. U AULIU rLoL4 -m l-undkL- UU n U U J+ g1, 4OYA UA --- nean,l1v might Vltill be avablom h U.lC nd other souw .g.; inreasd might still be available from the U.K. and other sources (e.g. increased Given these assumptions, there would thus be surplus resources before external capital aid of around E 1.0 mi..o an-al +to hlp f~yinanc development in the period 1966-1970. This compares with an average annual 1966-1969, leaving E 6.5 million a year or E 26 million for the four year period to be met from additional external aid. in its Dcemmr ag-ont, the U.K. committed itself to capital aid of L 8.0 million for 1966-1968. Assuming another Z 3.0 million might be available from the U.K. for 1969, this would leave L 15 million to be obtained from other sources, which does not seem to be completely implausible. Proposals for IDA credits totalling about $14 million (L 5 million) are now under consideration for roads and education, Both Germany and the U.S. have bilateral aid programs in &aMa0 while other sources of finance might also be found. 60. Although Malawils service on existing e%tarnal debt will decline gradually to around L 1.3 million by 19701/the country clearly will have no real scope for new borrowings on conventional terns until its dependence on external budget support is eliminated. On the basis of the comparatively optimistic forecasts made here about ex.ert growth after 1970, it is conceivable that something approaching a balance could be achieved by the end of the 1970's, given good luck and very careful budget management. But a measure of the difficulty may be given by the fact that starting with position projected here for 1970,it would require an annual growth of 8% in revenue combined with a limit on current expenditure growth of 4% annually in order to achieve complete balance within ten years. Nevertheless, the elements exist in the country's production potential, and in the policies now being implemented to achieve such a target. Certainly on the basis of its poverty and its performance to date,'Mhlawi would appear to be eligible for a comparatively generous amount of aid on soft terms to provide support for its own efforts. 11- ,.1 to 80 ofl rojected mrnise export receipts,. List of Tables iA Public Debt Outustancang at Jalmuary 1L, 1965' 3 ruLIc I)eoT uweC wIinin Tne GentraL Alrican Currency Area 2 Estimated Service Payments on External and Total Public Debt Outstanding at January 1, 195 3 Estimated Population Available Agricultural Land by Regions and Districts 4 Industrial Origin of Gross Domestic Product 5 GDP at Constant 1963 Prices 6 Resources and Expenditure (Current Prices) 1954-65 7 Estimated Gross Fixed Capital Formation by Industrial Origin and Type of Asset at Current and Constant 1963 Prices 8 Land-use in Malawi 9 Agricultural Production in the bnetary Section by Crops 10 Cash Paid to Growers by F.M.B. for Purchase of Crops 11 Estimated Livestock Population and Recorded Slaughters 12 Fish Productions and Exports 1954 to 1963 13 Manufacturing Industries 1955-1961 13A Supply and Demand for Electricity 14A Gross Value of Construction 14B Value of Building Plans approved in Blantyre-Limbe 15 Employment of African by Sectors 16 Malawi Government Current Revenue 17 Current Expenditure 18 Malawi Government Development Expenditures f,oc A/ o 0A .1.7O--- 4JjI4J ons.IJ± of. U-1 JJ - 0 IS ~ U~1LL IffnJ/ -2- Table No 20 Reserve Bank of Malawi, 1965-1966 21 Commercial Banks 1965, Main Assets and Liabilities 21A Advances by the Commercial Banks, 1961-65 21B Commercial Banks - Advances and Deposits 22 Monetary Survey, 1965 23 Balance of Trade 24 Principal Trading Partners 25 Production and Export Value of Main Crops 26 Imports by End-Use, 1964-1966 27 Value of Recorded Remittances sent to Malawi by migrant workers in Southern Rhodesia and South Africa 28 Estimated Balance of Payments Table 1A PUBLIC DEnTOUTSTANDING AT 1 JANUARY 1965 Total Redemption C ontribu tions Norail Value as Sinking Amount Contribution to Sinkirg of Total Original Fund (SF) Redewmed to Outitanding Redemption to Sinking Funds as of Sinking Fund Interest due Debt Service Amount Commenced 1 jan. 1965 1 Jan. 1965 1965 Fund 1965 1 Jan. 1965 1 Jan. 1965 in 1965 in 1965 5T (FIn=WanciaTr.) -(7 Y 0 ~T T~ (E0 ( 0 (E'0 (70 =170 (9 f 10 + 13) A. Loans Raised by Nyasaland orRis Governments HE Interest Free 1979 1,303 1953 600 740 50 - - - - 50 3 Guaranteed Nyasaland 1954/74 1,570 1937(SF) - 1,570 - 3.2 610.5 1,151.b 47.1 50.3 4-1/2% Nyasaland Developpent 1971/78 2,060 195V(SF) - 2,060 - 20.6 216.3 389.1 92.7 113.3 H Interest Free 1990 275 1965 - 275 2.4 - - - -2.) HIM Interest Fres 1991 247 1967 - 217 - - - - - - HME Interest Free 1991/92 70.3 1967 - 70.3 - - - - - - HMI Interest Free 1988 40D 1970 - 400 - - - - - HMI Camensatio Interest Free 1989 10 1971 - 100 - - - - - - H1I Compensation Interest Free 1989 30D 1971 - 300 - - - - - - HMi 7% Exchequer Lomn 1986 500 1962 25.b 474.6 9.7 - - - 33.2 42.9 HM 6-5/8% Exchequer Loan 1987 6w 1966 - 600 - - - - 39.8 39.8 HI 5-7/8% «Exchequer Loan 1988 100 1967 - 100 - - - - 5.9 5.9 H1I 5-7/8% Exchequer Loan 1988 200 1967 - 200 - - - - 11.8 11.8 HMI 5-5/8% Exchequer Loan 1988 300 1967 - 300 - - - - 16.9 16.9 Hfic 5-1/2% Exchequer Loan 1988 200 1967 - 200 - - - - 11.0 11.0 Hfi 5-3/ u Exchequer Loan 1989 650 1968 - 650 - - - - 37.1 37.1 H1I (4 Exchequer Loam 1989 450 196B - 450 - - - - 27.0 27.0 lt) 6% Com~utation Lon 1989 3) 1971 - 30 - - - - 1.8 1.8 1WI 5-7/8% Coeutation Loan 1989 70 1971 - 70 - - - - 1.:. HMI 6-1/8% Commutation Loan 1989 34,0 1971 - 340 - - - - 20.8 20.8 CDC 5-3/M5 Loan 1986 10 1967 - 00 - - - - 23.0 23.0 CDC 6-1/2% Loim 1986 350 1967 - 350 - - - - 22.8 22.8 CDC 6-3/8 Loan 1986 250 1967 - 250 - - - - 15.9 15.9 United Transport Overscas Ltd. 5% Loan 1980 88.8 1965 - 88.8 8.9 - - - h. 13.3 Total A 10,891.0 625.4 10,265.6 70.9 23.8 826.8 1,54o.5 415.5 513.3 B. Ioan Raised by the FIeral GovermmnT Nyasaland Governwent 1 Stock 1972/74 1,075.3 1956(SF) - 1,075.3 - 10.7 96.8 167.7 13.0 53.7 Nyasaland Government 5% Stock 1975/80 1,075.3 1957(SF) - 1,075.3 10.8 86.0 144.4 53.2 64.6 Nyasaland Government 6% Stock 1976/79 1,075.3 19å0(SF) - 1,075.3 10.7 53.8 83.6 66.5 75.2 Nyasaland Governmnt 6% Stock 1978/81 1,075.3 1961(SF) - 1,075.3 10.8 13.0 66.4 66.5 75.3 Ccumonvealth Assistaince Loan 1975 185.9 1965 - 185.9 30.7 - - - 9.4 40.1 External Loan Bonds 5-3/1K 1973 163.6 1961 16.3 191,.2 15.1 - - - 8.6 23.5 Total B 1&651.7 14.3 6,636.3 L.8 43.0 279.6 1662.1 243.6 132.4 GRAND TOTAL External Loans 15,561.7 639.7 16,901.9 116.8 66.9 1,106.1 2,002.6 659.1 862.8 of which: on Redemption Accounts 7,610.5 6,970.7 on Sinking Fund Account: 7,931.2 7,931.2 Table: 1 B Public Debt O_~d Within the Central African 3: -amrrncy Area original Rudptios as Rede d to Amt- ont- Redep- Contri- Total lacinal Interet Total Ant Sining pds lst Jan. '65 atsnding tion bution to contri- value of dm Deli Servie Caence lat Jn.'65 1965 S.F.1965 bution s.r. - lst 1%5 1965 to S.F.lst Jan.1965 Jan 1965 IErm m~nncalTr T- - E-7 M u TE-r TT55W Itj Mr- Nyasaland Development Bonds 169.9 194 .2 169.7 Nyasaand b 1/2% flagistered Bons 1980 1000.0 .136 86 - - Nyasaland 5 1/2% Local Rgistered Stock 1965 268.8 1965 268.88 88 - - Nyasaland 51 Local Registered Stöck 1965 430.1 1965 - 430.1 u30.1 - Nyasaland 5% Local Regigtered Stock 1966 322.6 1966 322.6 - Centrail African Atr.ay Corp. 6 I/M5 eA. Loan 1959/67 40.3 1966 10.1 30 ... Central African Airways Corp. 6 1/4% »P Loan 1962/66 32.3 196 10.8 21. 5 ... - Zentral African AlruM's corp. 6 1/5 IC» Loan 1963/67 80.6 1965 - ao.6. - - Central African Airwa Corp. 6 1/" "D" imen 1963/67 26.9 1965 - 26. . Central African Pumer Corp. 6 1/4% Loan 53.8 1964 26.9 26.9 9 -26. Rhodesta RaIlwa~ Penston ~aS 6 1/% L~s 12.9 1967 - 12.9 - - British South Africa Co. Invetmnt Ltd. 5% Loa 1969 5.11 196M - 5.4 - RhodeSia Anglo American Ltd. 5 1/2% Lpå 1976 53.8 1976 - 53.8 - -... Nobenga Consolidatad Coppar Ninsa Ltd. 5 1/2% 1978 105.4 1976 - 105.4 - - - Rhokana Corpoation Ltd. 5 1/25 1an 1976/78 55.9 1976 - 55.9 - - - W~ank CoIery Co. Ltd. 5 1/2% Laa 1978 10.8 1977 - 10.8 - Power Surcharge De alo~net Funt 5% 1967/93 650 1967 - 650 - - Contracr Finace (Roberte CoantructLn) 1967 108.6 1964 511.3 54.3 - - - Contractor Finne (Johnson & Duc~orth) 1967 103.8 196 51.9 51.9 - - - - Nyasjland 4 1/2% bral Rgisterd Stock 1969/71 752.7 1957 5.P. - 752.7 - 7.5 60,2 77.4 lyaal.ad 4 1/2% Jcalj Regi~tered Stock 1970/73 jL30.1 1956 3.F. - 430.i - 4.3 36,7 50.4 Nyas.l~ 5% Local Regist~red Stack 1974/76 537.6 1958 s.P. - 537.6 - 5.4 37.6 49.0 Nyasaled 5 1/6 Local Registered Stock 1975/77 591. 1959 s.F. - 591.4 - 5.9 35.5 43.h Nyasaland 6% Local Registared Stock 1976/79 806.5 1961 s.. - 806.5 - 16.1 64,.5 73.0 Nyasaland 5 3/4% uacal Regstered Stock 1979/81 1698.9 1960 5.F. - 698.9 - 7.0 34.9 40.5 Nyasaland 6 1/A% Lomal Regitöred Stock 19%t/85 698.9 1962 S.F. - 698.9 - 1U.o l9 46.5 Ny»aaad 6 1/2% Lcal Reciatered Stock 1981/86 537.7 1963 s.F. - 537.7 - 10.8 2l11 23.5 Nyasalnd 6 1/2% Local Regitered Stock 1982/87 A 322.6 19M S.. - 322.6 - 6.5 6,5 6.6 Nyasalmnd 6 1/2% ~cal Regi tered Stock 1982/87 a 591.4 196L s.F. - 591.k - 11.8 11.8 13.2 TOTAL 91499.7 290.2 9209.6 869.2 89.2 353.1 423.6 450.14 1U08.8 of ubich: On Redmption Acount 3531.8 1241.7 On Sinkig lInde ccaunt 5967.9 5967.9 1/ Formerly The Pederation af Rhodesia and Nyaaalnd Table 2 ESTIMATED SERVICE PAYENTS ON EXTERNAL AND TOTAL PUBLIC DEBT CUTSTANDING AT lst JANUARY, 1965(2) E X T E R N A L CENTRAL AFRICA CURRENCY AREA (1) Redemptions Interest Sinking Total Redemptions Interest Sinking Total Grand Total 1965 116,096 656,893 66,862 839,851 869,179 450,L03 89,250 1,L08,832 2,248,683 1966 lho,60c 65h,752 66,862 862,214 b34,931 406,505 89,250 .930,686 1,792,900 1967 199,190 651,079 66,862 917,131 244,63 426,086 89,250 759,799 1,676,930 1968 231,831 643,651 66,862 942,3hh 94,374 h19,75h 89,250 603,378 1,565,722 1969 216,651 634,674 66,862 917,987 104,376 418,013 89,250 611,639 1,529,626 1970 245,209 626,110 66,862 938,181 61,659 409,106 89,250 560,015 1,498,196 1971 287,523 617,073 66,862 971,658 815,060 (3) 1o6,254 81,723 1,303,037 2,27h,h95 1972 300,569 606,701 66,862 974,132 67,077 345,380 81,723 h9h,180 1,h68,312 1973 286,81h 595,882 66,862 949,558 499,960 (h) 334,9h0 77,421 912,321 1,861,879 1974 2,9b1,299 (5) So,I&53 54,484 3,536,236 72,612 324,460 77,421 474,523 4,010,759 1975 290,065 484,445 52,859 827,369 77,h8h 323,617 77,421 h78,522 1,305,891 1 5,255,647 6,711,713 709,101 12,676,161 3,341,205 1,264,518 931,209 8,536,932 f 21,213,393 NoTES: (1) Debt Service Payments for loans raised within the former Central African Currency Area rill be made in Malavi currency, though the great majority of stockholders are resident outside Malai, and therefore,unless special restrictions are introduced, debt service in respect of these loans vill be a charge on foreign exchange. (2) Expenditures in respect of interest on Treasury Bills and Sinking Fumd Managernent charges are not included above. (3) Includes redemption of L752,710, |% Local Registered Stock 1969/71. Realisation of Sinking Fund assets has not been set off. (4) Includes redemption of th30,120, Lå! Local Registered Stock 1970/73. Realisation of Sinking Fund assets has not been set off. (5) Includes redemption of ,1,570,000, 315 Guaranteed Stock 1954/7h. Realisation of Sinking Fund assets has not been set off. Includes redeMption of £1,075,30C, hi London Registered Stock 1972/7h. Realisation of Sinking Fund assets has not bee seVI t f. Table: 3 ESTIM,ATE OF POPULATIC1 Al,D AVAILALLE illCULTUfAL LEiD BY I1O7S l' DIST 'ICTS 1 962 Dniyof Estim,ates of Population Ppuation on. Educational availa1le Land U! Estiniate Planning fSurvey Land Available hasnd oU Districts 1962 by Districts 1962 for Cultivation Estimate (1962) person per thousands thousands sq. miles sq. mile SOUJTVLPN REGION Fort Johnston 140 181.3 1,543 91 asupe 260 282.8 1.878 119 Zomba 180 32h.8 539 334 Blantyre(urban) no esimate 58. - - Blantyre (rural) 210 180.0 864 243 Cholo 190 2(9.- 182 Chiradzulu 190 136.0 120 1,500 Manje 390 304.2 796 i90 Chikwawa 120 138.0 899 133 isanje 100 99.1 118 239 Re,ional Total 1,800 2,054.7 7,239 249 CENTRAL RI' N,Ikij,ta Kota U2 1. 6 2 Kasungu 80 77.9 1 728 6 DosJa 25 9. ,1 6 Lilonqe 360 331.0 1,772 226 Dedza 230 177.7 AL{ 260 NCcheu 150 124.5 730 205 j L. M4chinji 90 ~ _2.__2__6 He,ional Total 1,300 1,177.1 8,221 158 NO~('THET?H REZGION NaronFa 170 173.2 1,753 97 V-. n P ni -1n q1 Rurnpi 4u ,u. 7 lk 1kata Boy 100 101.5 916 109 zimba 2u 2.2 Rerional Total 520 520.8 6,766 77 \ational Totals 3,620 1/ 3,752.6 22,226 162 and 1965 population ) assuming 2 / 3,898 4,041.1 176 increase ii) assuinng 3% increase 3,994 4,100.6 179 1/ Excluding the urban area of Blantyre-Limbe. Table h Industrial Origin of Gross Domeåtic Product Current prices (. miillion) 1954 :1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 Mis rn k estimate Subsistence Agriculture 12.80 13.20 13.60 11.00 1L.45 1h.90 15.35 15.81 16.35 16.85 17.35 17.8 African Comercial Agriculture 2.11 2.12 2.30 2.h8 2.83 3.31 3.13 3.11 4.46 3.90 3.52 5.3 Non-African Agriculture 3.30 3.39 3.hi 3.70 3.33 3.83 h.47 b.25 3.97 3.58 3.40 3.9 Agriculture Total il M. IT IF I ROT 7 2 "T7 n-." Manufacturing and Mining 1.45 1.61 1.80 2.07 2.42 2.57 2.59 2.81 2.99 2.52 2.39 n.a. Electricity and Water .08 .08 .14 .22 .27 .27 .38 .58 .h6 .55 .58 n.a. Building and Construction :1.15 1.28 1.69 2.02 2.08 2.18 1.96 1.82 1.78 1.86 1.77 n.a. Industry Total Iý I~7 6T 1 7 ____ .~1I 57E _ Transport and Coimmunications (Total) :1.38 :1.54 1.87 1.9h . 2.24 2.22 2.65 2.62 2.81 2.81 2.78 3.0 Banking and Insurance .05 .06 .07 .08 .05 .08 .06 .07 .08 .08 .08 C ome rc e 3.06 3.h8 3.5 4 h.23 4.44 L.2h 5.75 5.65 5.61 6.06 5.9h Real Estate .07 .06 .09 .13 .14 .19 .22 .2h .26 .29 .29 Dwellings .19 .24 .32 .37 .41 .43 .ho .46 .49 .50 .51 Damestic and other services 1.18 1.28 1.52 1.68 1.77 1.34 1.87 1.85 1.92 1.9h 1.87 Cormercial and other services- (Total) h.55 5.13 5.53 6.50 6-83 6.78 8.31 8.26 8.35 8.87 8.69 9.6 Public Admin. and Defence 1.19 1.37 1.48 1.64 1.74 1.89 2.00 2.22 2..65 2.69 3.05 Education .49 .51 .57 .61 .79 .83 .9h 1.02 1.09 1.15 1.21 Health .29 .37 .40 .hh .50 .61 .60 .63 .68 .58 .61 Public Services 3. 6 7 J. T ~5. ~7 T~ I. 1T~7 7 Subsistence Services 3.12 3.22 3.32 3..2 3.52 3.63 3.7h 3.86 3.98 .4 h.23 h.4 GDP at factor cost 31.90 33.33 36.11 39.05 i.01 1,3.00 45,92 h6.98 9.37 9 ..7 L8.58 Sh.8 Indirect taxes .80 1.00 1.20 1.50 1.50 1.70 1.90 2.00 2.20 2.30 2.60 3.2 GDP at Market PriceS Sources for Table h: 1. For 1954-1963 All items except subsistence agriculture and subsistence services "National Accounts and Balance of Payments of Northern Rhodesia. Nyasaland and Southern Rhodesia 1954-631 (CSO, Salisbury). Subsistence production has been revised by the Mission. using the same per capita estimates for 1954 as the CSO series, but increasing the level to reflect higher population esti- matp. ( _7q millinn for I6 against 1.0 million in thp CSO series) and a higher population growth rate (3% annually from 1954 to 1963 aR aninst 2.2 in the CrO qriP.)_ Moronver. no effort has hen made by the Mission to adjust for price changes on the subsistence r'f-nn nc iz rrnc -;r +.h n 'C r.q nr .( a basis designed to be consistent with the CSO series. They are +he.rfr- n+ ful-lly nse4e+n+ r,,J+Uh t1he M1\11ral.i- Gor,rmn+ ime +4m eS+tae of GDP by industrial origin for 1964 published in "Budget 1966, Back- U LIIu.L.v uuuy accuL, 1u iu u . 7--Uovernment r1esse, 410u11v Malawi. (However, the differences between the two series cancel out in the toUal woin UL UD for 11U4 etUImateu in the latter at (952.0 million). Table: 5 GDP at Constant 1963 Prices RoughEstimate 19 1. 9 19 1956 1957 19 58 1959 1.60 1961. 1962 1963 1964 196 Commercial Agriculture if 5.42 4.66 5.61 5.33 6.06 6.73 7.08 7.04 7.90 7.h8 7.00 9.22 Non African 2.88 2.64 3.02 2.79 3.19 3.52 3.86 3.80 3.84 3.58 3.29 3.65 African 2.54 2.03 2.58 2.54 2.87 3.22 3.22 3.24 4.06 3.90 3.72 5.57 Industry, construction and utilities 2/ 3.48 3.94 4.61 5.05 5.45 5.62 5.38 5.52 5.21 4.94 4.72 5.50 Transport and Communications 21 1.83 2.04 2.38 2.27 2.56 2.49 2.55 2.78 2.80 2.81 2.76 3.10 Commerce and non-public services 21 5.98 6.80 7.05 7.61 7.80 7.62 8.97 8.76 8.32 8.87 8.65 9.60 Public Services 2f 2.58 2.98 3.14 3.16 3.46 3.72 3.84 4.11 3.86 4.42 4.85 5.20 Subsistence 15.92 16.h2 16.92 17. L2 17.97 18.53 19.09 19.67 20.33 21.95 21.58 22.20 GDP at Factor Cost 35.21 36.84 39.71 40.84 43.30 44.71 46.91 47.88 >4.842 >4..y' >9.56 r».82 of which OrDP monetary sector 19.29 20.42 22.79 23.42 25.33 26.18 27.82 28.21 28.09 28.52 27.98 32.62 1/ Base on volune index of the corrnercial crops (shown in Table 9) weighted at 1963 export prices. The implied price index which presumably reflects a combination of marketing board prices and export prices is as follows: 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 100 "EI 101 ~71 ~~E-1 ~106 107 105 17 100 99 1 2/ For 1954-63 deflated with price index for national expenciture (consumption and investment) inplied in official CS0 estimates in constant and current prices. National iccounts and Balance of Payments of Northern Rhodesia. Nyasaland ans Southern Rhodesia, 1954-1963 (CSO Salisbury. July 196>4). For 1964, the high income consumer price index is used and for 1965, no price change is assumed over 1964. The implied index is as follows: 1954 125 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 76 76 78 85 87 89 92 94 100 ~10~0 1ö1 101 3/ Subsistence assumed to grow at 3% from 1954 base, as adjusted to take account of recent population estimates. Table: 6 Resources and Exndittre (Current Prices) (E million) Snurces 1954 155 1956 1957 1958 1959 1g60 1961 1962 1963 196 1965 oDP at current market prices 32.70 34.83 37.31 h0.55 h2.51 U4.70 47.82 48.98 51.57 51.77 52.2 58.0 Plu8: net personal income receipts 1.20 1.30 1.30 1.70 1.50 1.40 1.40 1.30 1.10 .70 2.0 2.3 ra: net investent irrsoe payments - .4o - .60 - .70 - .60 - .60 - .70 - .80 - 1.10 - .70 - .80 -1.2 -2.0 Equals: GNP at narkm t prices 33.50 35.53 37.91 41.65 43.41 45.40 48.42 49.18 51.97 51.67 53.0 58.3 Plus: Imports of goods & net services 9.70 10.30 12.50 1L.20 15.20 L.oo 14.80 17.40 17.90 17.80 17.0 23.2 løss: Erparte of goods & factor incamel/ 8.60 8.50 9.50 10.40 9.30 9.70 10.80 10.90 12.00 12.20 13.3 14.7 Equals: National Expenditure: 36.20 38.73 h2.11 47.65 51.11 51.10 53.62 56.08 58.67 57.10 58.3 65.1 ýrpendit,ure Total consumption 32.90 33.23 36.ol 39.35 42.81 47.30 h.92 47.18 52.57 79.57 52.7 54.1 Private Consmaption (30.00) (1R) (31.71) (1) (3.1) (lo.ko) (37.32) (T-3" ) (Z¯) (39.27) (42.7) (3T¯) Money Econamy i4.o8 13.71 LL.79 17.13 19.14 21.77 15.23 18.81 22.54 18.32 21.1 20.9 Subsiteme 15.92 16.42 16.92 17.42 17.97 18.53 19.09 19.69 20.33 20.95 21.6 22.2 Public Consuption (2.90) (3.10) (4.30) (4.80) (5.70) (6.90) (7.60) (8.70) (9.70) (10.30) (10.0) (11.0) Total Investrænt 3.30 5.50 6,10 8.30 8> 30 8 _7 80 6.0 70 .6 l. Fixed Capital (3.10) (4.60) (6.10) (7.80) (6.50) (5.30) (7.00) (8.30) (5.50) (6.90) (6.6) (9.0) Inventory Increases ( .20) (.90) ( - ) (.50) (1.8o) (-1.50) (1.70) (.60) ( .60) (.60) (-1.0) (2.0) l_/Incudig nt prsoalinccne re ceiptýs and re t investment payr~ts. Source for 1954-63: CSo, Salisbury, except for subsistence consumption which is estimated to increase by 3% annually from a revised 195b base, and for private consumotion in the monetary econorV whi ch is derived as a residual. Source ror 1964-65: Mission Estimates. Table 7 ESTIMATED GROSS FIXED CAPITAL FORMATION BY INDUSTRIAL ORIGIN AND TYFE OF ASSET AT CURRENT AND CONSTANT (1963) RICES (t million) Mission Estimate 1951 1955 1956 1957 1958 1959 1960 1961 1962 1963 15 19,5 Current Prices Private Sector 1.27 1.98 2.34 3.47 2.16 1.72 2.67 2.11 1.53 2.09 2.6 3.4 Public Sector 1.79 2.61 3.76 4.29 h.37 3.63 4.33 6.17 4.ol 4.82 h.o 5.6 Central Government-./ 1.45 2.24. 3.27 3.63 3.44 2.70 2.71 4.35 :3.22 >4.11 3.0 >.7 Other ublic .3b .37 .49 .66 .93 .93 .62 1.82 .79 .71 1.0 0.5 Total 3.07 >.59 6.09 7375 -~5E ý3 G E-2 =-2 -1-¯ Land Improvement .05 .05 .07 .09 .08 .13 .08 .23 .15 .30 0.2 0.3 Buildings and Works 2.18 3.58 4.56 5.78 4.73 3.63 4.72 6.h9 3.95 4.30 3.5 L.5 Plant Machinery and Equipment .83 .96 1.46 1.89 1.73 1.59 2.20 1.57 1.43 2.31 2.9 L.2 Constant (1963) Prices Private Sector 1.67 2.62 2.98 4.06 2..7 1.93 2.89 2.24. l.53 2.09 Public Sector 2.36 3.h6 4.79 5.02 4.99 4.07 4.6B 6.55 4.00 4.82 Total L.04 6.08 7.76 9.08 7.h7 6.00 7.56 8.79 5.53 6.91 Land Improvement .08 .07 .09 .11 .09 .15 .09 .24 .15 .30 BuildLngs and Works 2.87 4.7L .5.81 6.76 5.hu 4.07 5.10 6.89 3.9L 4.30 Plant Machinery and Equipment 1.09 1.27 1.86 2.21 1.98 1.78 2.38 1.66 1.43 2.31 Implied Price Index 76.0 75.5 78.5 85.5 87.5 89.2 92.5 94.2 100.2 100.00 Source for 1954-63: Central Statistical Office (Salisbury), 1964t "Budget 1966, Background Information" (Zonba), adjusted on basis of supplementary data provided by letter. 1965: estimate by Mission on basis of trends in import of capital equipment and Government development expenditures. 1/ Through 1963 includes expenditures made by the Federal Government, which are excluded from Malavi (Nyasaland) Government developpent expenditures s hown in Table 18. Table: 8 Land-Use in Mlalaýyi (square miles) Provinces Total Southern Central Uorthern ýalawvi 1. Land Area 12,229 13,U019 10,400 36,4b6 2. Forest Reserves 922 722 hb8 2,092 3. Game Reserves 180 1,180 - 1,660 4. Com-unal Forest & Protected Hill Slopes 115 198 3 316 5.Äoer Land UnsuitabL for Cultivation 3,175 2,760 3,200 9,135 6. Total (2 - 5) 4,392 5,150 3,651 13,193 7. Private Estates (European) Y75 206 L, 765 8. Lpndi ilabln fnr Afrirn Cultivation 7,362 8,å53 6,867 22,470 Notes: All fi-ures are appro firations. Fiursfor Southern-- Prvneecue-.tr rbanaes Source: V.D. Bldwi Proposals for n Ecnomic velopent Plan fr~ Nyasaland, Volume Tio: Technical inex, .7riculture, Fisheries, forestry and Livstock (United Nations Decem-br 1 1963,p. -- . Table: 9 A ultural Production in the Moneta r Sector 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 Tea / 17.2 17.5 20.8 18.1 23.3 23.3 26.1 31.5 29.4 26.3 27.3 2S.5 Tobacco flue-cured /1 4.3 3.7 4.1 3.0 2.2 2.3 2.9 2.3 2.6 2.7 2.7 2.7 Tobacco fire-cured 23.6 1.8 25.4 25.6 30.9 33.0 21.5 15.6 25.3 27.5 22.4 31.5 (of which Estate grown) (5.1) (3.3) (4.0) (C.1) (5.8) (6.6) (5.1) (3.5) (5.6) (1.2) (1.0) (2.0) Tobacco air-cured 3.3 2.3 2.7 3.0 2.5 5.4 7.0 5.3 4.3 5.2 3.1 10.1 (of which Estate grown) (2.1) (1.5) (1.7) (1.7) (1.5) (3.5) (3.1) (1.6) (1.6) (1.7) (0.2) (1.0) Tobacco - Burley /1 1.9 2.0 2.3 2.2 3.2 2.8 2.9 3.6 3.9 4.5 4.7 5.8 Tobacco - Turkish - - - - - 0.1 0.1 0.1 0.1 0.2 Total Tobacco 33.1 22.8 3J4.5 33.7 38.8 43.5 3h.3 26.9 36.2 40.0 33.0 50.3 Seed Cotton 15.7 19.2 6.4 9.3 12.2 21.5 27.1 25.9 38.1 21.2 29.5 45.h (of which Estate grown) (1.3) (2.0) ( .4) ( .7) (1.2) (1.4) (2.1) (2.1) - - - - Groundnuts /2 14.6 20.6 19.5 27.7 25.6 25.6 41.3 52.2 72.5 55.2 39.0 50.4 Maize /2 108.7 39.5 67.4 11.6 25.6 11.7 40.0 36.5 .9 26.1 61.6 42.2 Cassava 2 4.3 .7 3.1 13.7 L.7 8.0 8.0 28.0/3 29.1/3 Ji.7 8.4 10.4 Beans 8t Pulses /2 4.9 12.7 15.9 14.7 12.7 7.6 12.0 1.3 114.0 36.0 37.0 60.0 Rice /2 6.4 1. L 8.3 7.1 8.1 12.5 14.3 19.7 10.1 10.1 8.0 11.0 Coffee /2 nil nil nil .1 .1 .2 .2 .2 .3 .3 .3 .3 TMg Oil /1 2.0 1.9 1.9 2.6 1.7 3.0 2.5 2.7 3.1 3.3 3.4 3.6 (est.) /1 Entirely Estate grown T2 Entirely African grown (Production figures for African grown crops represent sales through Farmers Marketing Board and Grower's Cooperatives) L3 In 1961 and 1962, a market was organized for their crop, but it was found to be too dirty to store with other produce, ard the narke t was left to informal buyers in 1963. Table 10 CASH PAID To GRCWEiRS BY F.M.B. F PURCHASE OF CROPS • (L million) 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 196h 1965 Cctton .25 .30 .0 .18 .24 .46 .57 .54 .92 .51 .76 (1.1) Groundnuts .21 .30 .33 ,46 .43 .h3 .86 1.05 1,5o 1.06 .77 (1.o) Tcbacc - Fire Cured .61 .43 .83 .95 1.22 <82 .47 2h6 ,98 1.25 .64 ) Sun/Air Cured .0 .03 .Oh .06 .06 .11 .2J .12 .17 .19 .13 Maize, beans & pulses .35 .45 ,29 .03 ,07 .05 .12 .13 - 52 .82 (0.9) TOTAL 1.48 1.51 1.59 1.69 2,02 1.87 2.22 2.30 3.57 3.53 3.12 5.0 Table: 11 ESTDIATED LIVESTOCK POPULATION AND RECORDED SLAUGHTERS 1954 - 1964 CATTLE SHEEP GOATS PICS Year European African Total European African Total European African Total European African Total Owned Cwned. Slaughters 195) 9680 282700 23146 2020 50622 2070 726 322012 11860 1913 80565 4844 1955 10038 296988 23140 2720 75989 1880 981 325132 13371 1953 75192 5484 1956 10408- 308041 26660 2692 63951 2926 890 353671 13795 1670 75488 5582 1957 10973 316656 287.4 3059 546(0 2078 1228 359580 15433 2557 86568 6128 1958 13807 329252 29149 2254 60095 3152 644 412042 15421 2613 79541 8234 1959 14780 341734 26240 2758 72538 2431 714 459889 15264 2607 117306 8582 1960 17043 339634 29440 3192 65006 3067 954 441668 15773 2310 70160 7390 1961 15425 359210 31766 2993 79107 3192 973 528485 18656 1782 98687 7941 1962 15000 365000 35853 3000 73000 2833 1000 L92000 18233 2000 '103000 8521 1963 13592 382553 40350 2405 79513 2452 793 437695 18103 2148 125749 8695 1964 10232 401187 39613 2321 71818 2355 .394 479901 22535 2174 133221 10557 Source; Malawi Government Table 12 Fish Production and Exports 19>u to lyo Total Catch in Fish Dcports (short tons) Year Short Tons Value in L Fresh Smoked Salted 1954 3,500 94,500 - - - No exports - - - 1955 4,000 108,000 a 1956 4,500 121,500 " 1957 7,705 208,035 1958 7,290 196,830 62 33 93 1959 6,150 166,050 134 110 105 1960 6,400 172,800 280 211 153 1961 8,654 233,658 173 108 133 1962 12,766 344,682 68 65 108 1963 12,539 338,553 29 40 133 1964 13,621 367,767 3 123 Noe 1964..70 figures are estimates based on an annual inres of some 10% starting in 1966. Source: Ministry of Agriculture and Fisheries. Table: 13 Manufacturing Industries, 1955 - 1961 Industries 1955 1956 1957 1958 1959 1960 96 Agricultural Processing Industries /I No. of units 37 36 42 46 bh 53 54 Gross outputs (L 1000) 2,953 3,129 3,556 3,497 3,826 4,51b 5,221 Net output (E 1000) 1,447 1,545 1,729 1,560 1,766 2,035 2,347 Net output per person emvloyed CE) 560 536 482 479 513 485 447 Total no. employed 2,586 2,881 3,587 3,260 3,440 4.,193 4,469 Net capital expend. (Voo) 618 807 818 hh2 286 440 337 Other Manufacturing Industries/. No. of units 38 b1 52 119 54 77 78 Gross output (E '000) 1,430 1,764 2,375 2,717 2,789 3,550 3,917 Net output (_f '0O) 7014 940 1,213 1,4:23 1,425 1,917 2,029 Net output per person ernploved (.) 169 158 178 1914 179 216 217 Total no. employed 4,169 5,949 6,805 7,334 7,961 8,882 9,365 Net capital expend._ ('innn) 29 187 517 256 369 558 291 o . i. 75 77 Qh 94 98 130 132 Gross output (r '000) 4,383 4,893 5,931 6,2l4 6,615 8,068 9,138 Net output (. '000) 2,151 2,1485 2,942 2,ARI 9191 3,952 h.376 Net output per person emnployed ( ) 318 281 283 282 280 305 298 Total no. employed 6,755 8,830 10,392 10,594 11,1401 13,075 13,834 Net capital expenditure 877 994 1,335 699 655 998 628 / Commercial grading and packing of tobacco, accounting in 1961 for about 3,000 people emrployed, is ±icluded in~ "Uthe MauatrnIdsre" Source: Central Statistical Office, The ensus of' Prodution in 1960 and 1961 (Salisbury, October 1963), p. 6I-62. Table: 13 A Supply of and Demand for Electricity Total Consumption of Electrical Energy by Industrial Groups, 1954-1965 (in millions of kilowatt hours exclusive of transmission losses) Year Manufacturing Domestic Others Total Industries Consumers 195l l.h 1.h 1.3 h.1 1955 2.3 2.0 1.3 5.7 1956 3.2 2.6 1.9 7.7 1957 6.0 4.6 2.6 13.2 198 8_ 6. h.3 19Ah 1959 10.2 7.7 .4 22.3 1q60 11-9 8o ; 2 2c;1 1961 17.1 8.9 6.0 31.9 1962 18.8 9ch A7 1963 18.3 10.1 6.9 35.3 190AL 2n in 1 7 38.1 1965 25,5 11.0 9.3 45.8 .LL .LZ-,. (in millions of kilowatt hours) ou U ar_erLvgs oqaUac preo Source: iQuarterly Digest o1 Statisics, April 190"0' Table lLA Gross Value of Construction (, mi-llion) Private ontractors' Work Total Departmental For For Construction "-orks Governm-ent Prvate Total ut put n i5I 1. o. 0. 1.1 23 1.3 0 . 1.1 2.L 195 2.0Q 1.'71.3. . l95 .9 0.7 2.6'0 3.4 5.3 ou -L.0 l.u 1960 1.9 1.3 1.0 2.3 h.7 1961 2.1 2.5 0.6 3.0 5.1 1962 2.0 1.0 0.7 1.7 3.7 1963 .. 0.9 0.h 1.3 1964 January-June .. 0.3 0.2 0.5 Source: Ministry ,f Finance, Quarterly Digest of Statistics, April 1900. Lctu-LLu ; .L4 Lj T- -.%..' - 3. -- rn --- 1% - - -3. Va.uu u± UL UL.LUIIr, r±tLuu-j ftPjjL-vuU. in Elantyre-Lmbe (18~ L "UUU} Year Industrial Commercial Residential Other Total 1961 55 90 166 160 471. 1962 103 49 122 340 614 1963 99 73 51 543 766 1964 38 49 23 50 160 1965 52 188 218 341 799 1st Quarter 1964 5 33 6 27 71 1965 32 12 - 13 57 1966 267 32 71 6 376 Source: Ministry of Finance. Quarterly Digest of Statistics. April 1966. Table 15 ENployment of Africans by sector (thousand) 195L 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 A * +J. LA n AA 0 A9 A Al A Al An R Co 0 7 n co A )o R i.P o turing 14.0 14.2 14.2 14.3 14.5 14.6 14.7 14.7 12.7 9.3 8.2 Construction 19.0 21.0 25.0 26.0 26.0 24.0 22.0 20.0 15.0 15.9 13.7 Electricity and Hater 1. . . . .4 1.4 1.4 1.4 1. 2 11 Commerce .U .0 11.1 11.9 12. Y13 . 1 3.0 13.6 13 .7 e. Transport and communications 3.3 3.6 4.2 4.8 5.2 5.5 5.9 6.3 6.0 5.5 5.3 Domestic Servants 11.5 11.6 11.9 11.4 10.7 10.1 9.4 8.8 8.7 8.7 8.6 Government Ad- ministration 8.0 8.3 8.8 9.3 9.4 9.3 9.4 10.6 10.9 12.3 25.9 Education 5.5 5.6 5.8 5.9 5.9 6.1 6.0 5.8 5.6 5.3 25.9 Health 2.5 2.7 2.8 2.8 2.8 2.8 2.6 2.7 2.6 2.4 25.9 Other services 5.8 6.1 6.5 6.5 6. 7.1 6.8 6.2 6.0 5.9 25.0 TOTAL 129.6 139.0 154.2 157.2 157.0 154.8 151.0 146.5 135.0 130.1 127.8 Source: Quarterly Digest of Statistics (April 1966) NSO Zom6ba Tables 16 MAAWI GOVERNMENT CURRENT REVENUE (in 1 00 Revised Estimates Estiates 1954/55, 1958/59 1962/63 1964 1965 1966 Federal Income Tax Collected in Malawi 825 945 1,395 - - Territorial Surcharge of FIT (20%) 165 189 279 - - - Territorial Personal Taxes 625 901 1,012 - - Malawi Income and Personal Tax -- - -2 2 2,477 2,559 Total Income and Personal Taxes Raised in Malawi 1,52 2 2 7 2,559 Federal Subsidy through redistribution of previous years FIT collection 1,070 11 225 - - Total Income and Personal Tax Rerenue 2685 3I 6961 2268 2,477 2,559 Motor fuel tax 43 101 280 382 397 1.0 Excise duties - - - 273 293 310 Fiscal Paywment by Rhodesia Govt. in lieu of custom duties 0- - 400 11 12 Import duties - - - 1,173 2,050 2,930 Miscellaneoous Revenue - - - - Total Customs ani Excise Duties 43 101 280 2,228- 3,155 3,666 Other taxes ani licensel 90 337 hol 393 h82 h9h Total Fiscal Revenues 2,818 9.5h 4 49 6 ll 6,719 Receipts in respect of Goverinment services and other revenuesa 664 953 1,493 2,598 2,765 2,859 Reimbursement and payments from the Federal Governmant 534 793 767 - - - Total Recurrent Revenue 4,016 5ig 6854 7,87 8,879 -78 (% of GDP) (11-5%) (11.9%) (13.2%) (14.3X (15.3%) (15.6%) Non-recurrent: Arrears of FIT payments and other dinsolved pools of revenue 1,128 56 Total current revenue 4,016 513_40 6,854 8 615 8. 935 _,58 Source j Malawi Government, Est:inates Table- , Current Expeniture 19!y55 1958/59 1962/63 1964 1965 1966 Act i Xcriili XGEililis iehaEaI (WDi&sed ) ( tii.T&eiieT, First & Secondary Supplesnts.) RECURFNT EXPENMTlURIC A 1. Education (higher education, non African education) 304 652, 1,420 1,823 2,051 2,397 2. Works and Housing (trunk road maintename) 1,231 -- 929 1,633 1,518 1,446 1,405 3. Natural Resources and Surveys (agricultural research, some extension services) 628 770 981 1,186 1,334 1,549 4. Health (all health services) - - - 905 1,075 1,169 5. Transport & Communications (Posts & Telecommunications, Civil Association) 55 - 12 831 8%4 913 6. Trade and Industry (Tourism Services) - - 30 54 79 54 7. Labor 28 68 86 95 101 110 8. Justice (incl. Prison current costs) 22 52 78 468 527 563 9. Police 293 669 1, 043 1,013 1,117 1,155 10. Defense (afl. defense) - - - 344 402 479 U. National Assembly - - 26 38 46 51 12. Ecternal Affairs - - - 176 298 338 13. General Adinistration including Finance (Tax collection, audit, statisticas) 772 991 970 1,766 1,905 2,297 14. District, and Local Gorernment 503 517 780 447 540 538 15. Pensiom 155 247 376 512 514 763 16. Interest on Public debt 240 /3 585 /3 969 3 1,196 1,170 1,363 Total Recurrent Expenditure: )231 5, 26? 8.ASA 12 A 1L44 15.1h4 Estiated Current expenditures of Federal Government in Nyasaland L1 1,000 2,4oo 4,50 - (% of Tatal) (19) (29) (5 - More comparative totals I? 1 TJ7 Departmental breakdown of services expenditure in services from 1964 onwards are not fully comparabla id.th that of the Federal Period duo to the non-inclueimn of gane Federal Goverrannt expenditures in the Nyasaland budget duzing tka Federal period. Items in brackets indicate major services provided by Federal Governmat which do not appear in budget until assumed in the Malavi Government in 1964. 2 Includes capital expenditures Including debit redemption. Soure Central Statistical Office Salisbury: National Accounts and Balance of Pasments of Northern Rhodesia, Nyasaland and Southern Rhodesia 1954-1963 (July 1964) Table: Tble- 18 NAJJwI DEFRn IEL l E |PEIKDTURES (b thousanid) 1963 195C/59 i96cV61 1962 1962/63 Jul -Dec. 1964 1965 1965 1966 2 supplemte.) 1. Natural Resuxrces 408.6 557.6 737.8 672.1 314.8 607.4 1,011.2 864 1,481 2. Education 200.6 210.7 297.9 359.4 252.1 574.9 1,067.0 668 1,226 3. Commerce and Indmrtry - - - 14.3 7.h 37.7 660.0 489 710 4. Poste and Telnaoauni- - - 5,.5 189.8 135 210 uationa 5. Pblic Works axi Roade 413.8 559.1 500.3 716.9 283.7 502.6 1,471.7 1,138 2,150 6. Urban arrl orant and Watr Supply 503.9 218.3 233.1 448.2 318.0 382.5 234.0 203 362 7. Housing 176.6 212.8 174.3 251. 146.5 99.9 116.8 11o 361 8. Me-nintration Bvänd- inge aM Police 350.? 920.1 898.2 245.2 53.2 143.5 292.9 360 481 9. Social Devoel1cent 17.7 25.4 41. j2.1 18.3 13.1 52.9 . ../ 10. Lons .ti Kicelmeo-s 211.3 752.1 510.7 934 42.4 74.0 182.2 180 iUh 11. Poer - - - - 43.0 167.0 320.0 432 335 12. Hesalth - - - - - 97.0 49 152 TOTAL 22W.0 1 t7. 2 6B5 .2 ~3.L 3.166.-4 28. 7~94 28515,695.5 41,658 f a/ included in item 6. Source: Kinistry of Finance, Entimateas Tnblos 10 OPER&'TOnSZn A OF TT nm PnrmT, 1 ac R/ca_l a4t D-,4 -e Actua 1 s Estimates Estimates 1958/59 1962/63 1964 1965 1966 Current Revenue 5,30 6,854 7,487 8,879 9,578 C1urEtt,E!UII UUnI-U,-s uJ,26r0 U 2 945 74 12,2- 144. 3, ). 4497 1, 44 Current Deficit -2,920 -6,100 -4,756 -4,570 -5,56 Capiual Expenaitures e o a 0,1 o .L2 041 D Development 2,3 2,W 7,612 Special Capital 2/ 3/ Expenditures 1,438 1,653- 1,112 Debt Redemption 1. 1,000 1,130 013 Payments to Sinking Funds 1/ .4 1.64/ Total Expenditures 10,543 15,797 18,410 20,890 24,481 Overall Deficit -5,203 -5,943 -10,923 -12,011. -14,903 Financing: CD and WA Grants 345 400 501 - - OSAS Grants - - 1,100 941 1,117 U.K. Budgetary Grants-in-Aid - 1,190 5,000 5,948 5,300 Federal Current Expenditures in Nyasaland (=Grants-in- Kind) 2,400 4,500 - - - Other Grants 23) 1,228 1,667 3,152 448 External Loans (incl. Federal ) loans 1958/59) 1,317) 1,200 1,781 3,905 Internal Loans - 527 68 250 1,000 Other Revenue (incl. CB profit) 122 232 338 611 Non-recurrent revenue arising from dissolution of Federa- tion - - 1,128 56 - Net Other (+:decrease) + 986 + 866 - 79 - 117 +2,522 1/ included in current expenditures 2/ compensation and pension payments 3/ included capital subscription of L 476,000 to IMF IT/ included in debt redemption 5/ actual Source: Malawi Government; Estimates Table 20 RESERVE BANK OF MALAWI. 1965-1966 (, Ynillion) Dec. May JunA 30 Sent.30 196 1966 A. Assets R.7_ Q 91 7298 7-6 Foreign Assets (net) ni R 7 cO Balances ,wBnk 0.59 0.6 0.27 0.-6 Bills 5.09 4.41 4.04 3.02 Other Securities2.3 .2 328.5 Domestic Credit 3.. 3 0.33 u £.3 (i) to Government (investments) 0.19 0.33 0.23 (ii) to Private Sector - - - Other Assets 0.58 0.54 0.17 B. Liabilities 8.78 9.22 7.98 7.68 Capital (paid in) 0.50 0.50 0.50 0.50 General Reserve Fund 0.35 0.35 0.38 0.38 Currency in Circulation and with Commercial Banks 6.35 5.56 4.64 5.43 (cash with commercial banks) T''7) T.!l Deposits 1.09 2.30 2.06 1.O (i) Government 0.23 1.71 0.98 0.2h (ii) Bankers 0.8h 0.55 1.0 0.69 (iii) Others 0.02 o-o. 0_0 nli Other Liabilities n)h8 n30 ni.n n Source! RAserve Rnk nf Mnlnwi 21 and Liabilities lrch Jun Sý -ept. De Foreign Assets (net) 2.00 -0.96 0.06 Cashi & deposit L nith Rwgurve =nK Ug J. ..L8 UOU Domestic Credit 49 6.; 7.5 6 a) To Government . O.95 132 1.27 b) Statuatory bodies) 0.72 ) h.h3 5.73 5.26 c) Private Sector ) 4.38 Other Assets (net) 0.35 0.52 0.9 0.91 B. Liabilities Deposits: 8._o 6.97 7.72 8.73 Demand deposits 3.74 4.17 4.72 5.60 Savings deposits 1.57 1.61 1.68 1.71 Time deposits 2.73 1.19 1.32 1.42 Table: 21A Advances by the Commercial Banks, 1961-65 (in E , 000) End of Period 1961- 1962 1963 1964 1965 Advances to: Agriculture 267 470 698 730 723 Manufacturing 558 968 7h2 939 1,h3h Construction 30 3h 31 32 33 Distribution 368 1128 512 625 1,22ä Trpnqport 3 8 156 209 h3 Services 3 36 69 91 186 Fnrinnei rgani!An 70 117 27 93 7 a u 11 2 7 Public Bdies 7 2 139 h31 8 NonReidets20 4 6 0 16 1 JscellUeus5 5 2L C 4.1 1 n"^~( n ^17fN 1,4 3~ n'~~ ~1 T0 ,d. 23, Source: Quarterly Digest of Statistics, April 1966 M -1 - - ril n I .L . ; C..0 Bank Deposus ana Avancs., 1U.L-uu (in f millions) Commercial Banks- -___-- Deposits Loans 6c Ratio of Year Time & Savings Demand Advances Advances to Deposits Demand w- .- Dposits February 1961 2.02/ 3.5 1.7 47,1 .. 1962 2.4 3.7 1.5 41.2 .. 1963 2.7 3.7 2.4 65.2 0. 1964 3.0 3.5 3.2 91.1 0.7 1965 4.3 3.7 3.5 94.5 0.8 1966 3.8 4.3 3.3 90.8 1.1 1/ Residents only 2/ Estimated by Bank Mission I/ Ehandes bills of erhano (amonuntln to around M1-2 million in 1965) which constitute the other main part of bank credit to the t Pnm+ rinc ntnin Anl Table: 22 Monetary Survey, 1965 End Month June June Sept. Dec. Foreign Assets: (net) 7.10 7.71 7.65 Reserve Bank of Malawi 8.01 8.35 7.59 Commercial Banks -0.91 -0.64 0m06 Claims on Government: 0.90 -0.06 0.62 of Central Bank (net) -0.05 -1.37 -o65 of Commercial Banks 0.95 1.32 1.27 Claims on Private Sector and Statu- atory bodies 5.10 5.73 5'Zo oney 10.05 10.01 10.01 Currency with public 5.88 5,29 4.41 Demand deposits 4.17 4,72 5.60 Quasi-Money 2.80 3.00 3.13 Savings Deposit 1.61 1.68 1.71 Time Deposits 1.19 1.32 1.42 Other liabilities (net) 0.25 0.37 0.39 Sournp- ThA RAprvn Pnnk of Malawi Table: 23 ance of Trade UiE m7ilon)7 Year Eknorts to Other Total Tinorts from Other Total Balance Zambia & Sth. Exports Exports Zambia & Sth, Imports Imports of Rhodesia Rhoeipn Trnai 1950 0.2 4.8 5.0 0.4 7.1 7.5 -2.5 1951 0.6 5.2 5.8 0,5 6.8 7.3 -1.5 1952 0.9 5.3 6.2 0.5 8.3 8.8 -2,6 1953 0.9 6.2 7.1 0.6 7.0 7.6 -o. 1954 (0.6) 7.2 (7.8) (1.3) 7.0 (8.3) -o.5 1955 (0.7) 7.1 (7.8) (1.9) 7.0 (8,9) -1.1 1956 (0.8) 8.1 (8.9) (2.5) 8.1 (10.6) -1.7 1957 (0.9) 8.4 (9.3) (3.1) 9.0 (12.1) -2.8 1958 (0.9) 7.5 (8.4) (3.6) 9.4 (13.0) -,.6 1959 (1.0) 8.0 (9.0) (4.3) 7.5 (11.8) -2,8 1960 (1.1) 9.1 (10.2) (4.9) 7.4 (12.3) -2.1 1961 (1.2) 9.5 (10.7) (5.7) 8.7 (14.4) -3.7 1962 (1.3) 10.3 (11.6) (6.6) 8.2 (14.8) -3.2 1963 (1.3) 11.0 (12,3) (7.4) 7.3 (14.7) -2.4 1964 2.3 10.2 12.5 6.1 8.2 14.3 -1.8 1965 1.6 12.9 1)4.5 8.2 12.3 20.5 -6.0 Source: Ministry of Finance, Zomba and Central Statistical Office, Salisbury. Table: 24 Principal Trading Partners Rnports 1954 1957 1960 1964 Rhodesia and Zambia 15.7 25.6 39.8 42.7 United Kingdom 47.4 36.3 28.3 23.4 EEC Countries 5.6 6.0 6.6 4.9 South Africa 7.2 7.1 7.7 6.0 Mozambique 4.9 6.6 2.2 1.6 Japan - - - 4.7 United States 1.5 2.0 - 2.2 Others 17.7 16.4 15.4 14.5 TOTAL 100.0 100.0 100.0 100.0 Exports Rhodesia. and Zambia 7.7 9.7 10.8 18.4 United Kingdom 62.8 60.2 61.8 43.8 South Africa. 1.5 2.7 3.2 4.6 Western Africa 9.6 11.0 8.0 6.9 Portuguese Possessions 1.6 1.9 1.9 2.4 EEC Countries 6.2 9.3 8.5 6.9 United States - - 1.0 2.8 Others 10.6 5.2 4.8 14.2 TOTAL 100.0 100.0 100.0 100.0 Table 25a Production and Export Value of Main Crops Average Average Average Est. 1954-57 1958 1959 1960 1961 1958-61 1962 1963 1964 1965 1962-65 1966 Tea Production (lbs. million) 18.4 23.3 23.3 26.1 31.5 26.0 29.h 26.3 27.3 28.6 27.9 33.0 Export (Ibs. million) TT 20.9 22.4 24.4 30.1 T . 28.2 24.8 27.0 28.4 Tr.1 33.0 Average local export value pence/lb. 41.0 33.9 30.5 37.7 35.2 34.6 30.5 31.7 :29.7 31.8 30.9 30.0 Export Value (VO00) 371T 2955 2842 3836 441a11 1537 3580 3276 3338 3769 3U 4125 Tobacco Production (lbs. million) 31.0 38.8 43.5 34.3 27.3 35.9 36.2 40.0 32.9 50.3 39.8 4o.0 Export (lbs. million) 2. 26.7 27.0 28.6 26.1t 127. 26.9 32.0 29.3 38.0 T.5 75. Average export value-pence/lbs. 27.7 29.8 38.6 30.1 29.1 ,9.T 35.8 35.9 34.5 32.2 7C.T 32.0 Export Value (11000) M 3313 3214 3584 3195 336 MT 018 4787 4218 5102 I 4666 Groundnuts Production (lbs. million) 20.6 25.6 25.6 41.3 51.8 36.0 72.5 55.2 39.0 50.4 54.2 68.0 Export (lbs. million) 157. 12.1 22.5 21.2 13.0 17.2 68.0 66.1 34.7 L2.1 57.7 E. Average local export value t ton. 60.8 56.9 56.8 55.2 53.7 55.6 50.7 53.7 64.1 77.8 61.5 69.0 Export value (V000) T77 343 639 586 352 4dO 1472 1777 1113 1640 15 2350 Cotton Seed Cotton Production (lbs. million) 12.8 12.2 21.5 27.1 25.9 21.6 38.1 21.2 20.5 45.4 31.4 26.0 Lint Production/Export (lbs. m) -77 3.4 6.2 7.5 7.2 T 11.3 7.1 9.1 10.2 - 15.0 Ginnery Outturn % (trust land grown) 32 30 31 30 30 30 ... 33 Grade I Local export price 29.3 21.8 23.7 2b.6 25.9 '7. 25.5 25.5 Grade II Local export price 75.5 20.1 17.5 18.5 18.9 1j.9 19.0 22.0 Avg. local export/value p/lb. 7-.6 23.6 22.6 22.9 25.1 '737, 23.9 25.1 25.4 25.4 24..9 24.0 Export value (LI000) 7TU 334 582 705 7UL '-M 1123 73 964 1079 -77 15M Beans and Pulses Production (lbs. million) 12.0 12.1 7.8 12.6 1.3 11.7 114.0 36.0 33.6 60.1 35.9 60.0 Export (lbs. million) 12.0 ]2.7 7.6 12.0 14.3 11. 14.0 36.0 54.4 46.2 T77 60.0 Average local export value L tan. 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27..0 28.0 35.5 29.3 30.0 Value (Unrecorded through 1961) (1t00) 162 171 103 16? 193 157 1P 1459 763 9t) 557 750 Source* Quarterly Digest of Statistics (IV/1966) Table 25 B MALAWI: EXPORTS OF MAIN CROPS ACTUAL AND FROJECTED A c t u a 1 s Est. Projections 1954-57 1958-61 1962-65 1965 1966 1970 1975 1980 volume kLMalion pounu._ Tea 10.4 4.5 27.1 28.4 33.0 3r.2 41.u 51 Tobacco 25.1 27.2 31.5 38.0 35.0 38.0 40.0 43 Groundnuts 15.8 17.2 52.7 42.1 68".0 100.0 150O.0 2 Cotton 3.7 6.1 9.4 10.2 15.0 20.0 40,0 70 Beans and pulses 12.0 11.6 37.6 46.2 60.0 80.0 100.0 120 Maize (net exports) .. .. (30.0) 32.0 40.0 200.0 350.0 400 Unit Prices Tea (pence per lb.) 41.0 34.6 30.9 31.8 30.0 30.0 30.0 30.0 Tobacco (pence per lb.) 27.7 29.4 34.6 32.2 32.0 32.0 32.0 32.0 Groundnuts (Z per short ton) 60.8 55.6 61.5 77.8 69.0 55.5 50.0 50.0 Cotton (pence per lb.) 27.6 23.3 24.9 25.4 24.0 23.6 23.0 23.0 Beans and pulses (f per ton) 27.0 27.0 29.3 35.5 32.0 30.0 30.0 30.0 Maize (E per ton) .. .. 15.0 15.0 15.0 15.0; 15.0 15.0 Value (in E million) Tea 3.1hh 3.537 3.490 3.769 4.1 4.8 5.5 6.4 Tobacco 2.894 3.326 4.531 5.102 4.6 5.1 5.4 5.8 Groundnuts .447 .480 1.500 1.640 2.3 2.8 4.1 5.5 Cotton .418 .591 .977 ).079 1.5 1.9 3.9 6.7 Beans and pulses .162 .157 .557 .820 1.0 1.2 1.5 1.8 Maize .. .238(a)(.250) .3 1.5 2.6 3.0 Tno Oi1 .12h .1i5 .293 .302 .3 0.3 0.3 0.L Rice .. .. *065(a)(.042 .1 0.2 0.6 -1.0 frv Voqh .059 .077 (.069) .1 0.1 0.2 0.3 Coffee .. .. .039(a) .40 ) 0.2 0.5 1,0 Pn inmoo u t.i ber - - - - - 1.0 5.0 Sub-total of above 7.223 8.295 11.767 13.113 14.3 17.1 25.6 36.9 All +,hn" (incl. reexports) (1.227) ( .955) ( .953) (1.373) 1.5 1.9 2.4 3.1 ("..11 fLenN to Ofn N1 ,0 O0N1 11. tn A l 10o n ORA n A A kaj: Iyu4 only Table: 26 Imports by End-Use 1964-1966 End Use Category 1964 1965 A 1966 L m. % oF total L m. 7 of total L m. 7of total Consumer Goods 4.1 29 6.6 .32 6.9 31 Fixed Capital 1. Formation 1.9 13 3.1 15 3.6 16 Transport means 1.8 13 2.1 10 2.7 12 Industrial Inputs- 6.5 45 8.8 43 9.3 41 TOTAL 14.3 100 20.5 100 22.5 + 100 /1 Provisional 2 Forecast /3 Excludes passenger motor vehicles / Building and construction and plant machinery and equipment (excludes vehicles) /5 Basic and auxillary materials for industrv narts. tools and miscellaneous appliances chargeable to current account. Souree! Min nvPrnPnt Table 27 Value of Recorded Remittances sent to Malawi by Aigrant (b thousand) Year Remittances Paid 1954 909 1955 1,276 1956 1,472 1957 1,664 1958 1,765 1959 1,599 1960 1,689 1961 1,690 1962 1,640 1963 1,528 L964 1,777 Source: Ministry of Labour, Zomba. Some minor items are estimated. Does not include savings brought back to Malawi by returning contract labor - estimated at Table 2o VSTTMATED BALANCE OF PAYMENTS 1/ (t million) CURRENT ACCOUNT 1957 1958 1959 1960 1961 1962 1963 196h 1965 1 Export 2/ f.o.b. 9.3 8.4 9.0 16.2 10.7 11.6 12.3 12.0 IL.L 2. Inports . f.c.b. -12.1 -13.0 -11.8 -12.3 -14.4 -14.8 -14.7 -1.l. -20.7 3. Balance of Trade - - : - , - Z.. - :A - ,*< - - L. Freight on imports - 1.5 - 1.6 - 1.4 - 1.5 - 1.8 - 1.9 - 1.9 - 1.6 - 2.1 F vardon travel (net) - 0.6 - 0.6 - 0.8 - 1.0 - 1.2 - 1.2 - 1.2 - 1.4 - 1.0 6. other services (net) _ . r ,** ** ** *. 4* 0.* r! Q.6 7. Baance on goods and services - 14.7 - 6.8 - 5.0 - L. - 6.7 - - . 8. Investnent income receipts 0.3 0.4 0.4 0.3 o.4 0.3 0.3 ).L 0.3 9. Investment income payments - 0.9 - 1.0 - 1.1 - 1.1 - 1.5 - 1.0 - 1.1 - I.t - 2.3 10. Personal and other'transfers 1.7 received 1.8 1.7 1-7 1.7 1.8 1.7 1.5 5.2 3.2 11. Personal and other transfers paid - 0.1 - 0.2 -0.3 -0.3 -0.5 - 0.6 - 0.8 - 1.2 -0.9 12. Balance on factor income 1.1 1.0 0.7 0.6 0.2 0.4 - 0.1 o0.8 *0.3 13. Balance on current account - 3.8 - 5.8 - 4.3 - 4.0 - 6.5 - 5.9 - 5.6 - L.2 - 8.5 lh. Government transfers (net) 0.6 o.4 0.3 1.3 2.3 2_.3 . .2 _7 A) Grants received 9.1 9.8 b) Pensions paid and other - .9 - 1.9 15. Balance after transfers - 3.2 - .u - .0 - 2.7 - .2 - 36 - V.3 3.0 - u.6 CAPITAL ACCOUNT LUf. Governen ongJ T, e, o.6i 0.( a) Long term borrowinp 1.9 1.0 b) Long term debt redemption -1.7 -(.6 a) Net use of long term funds) -0.1 0.1 17. Private Sector Long Term 0.6 0.3 a) Direct investment -0.1 -0.1 b) Other 0. 0. 1o. Private Snort Term U:e2l - L 19. Government Short Term - .8 - 9 20. Change in Monetary Reserves & Errors and Omissions -3.0 4 2.9 1/ Series 1957-1963 are estimates subject to considerable margin of error. Figures on trade have been agreed between C.S.0. Salisbury and Malawi officials. Territorial transfers on Federal Government Account are not included. 2/ Including estimated trade with the Rhodesians and estimates on reexports (1957-1963). Direct data on trade - utilized for 196L and 1965. 3/ Mainly repayment of short term (floating) debt. E/ Increase in cash balances with Crown Agent plus short term investments.