Malawi - Recent economic development and prospects

rmNc, iuri Report No. 560a-MAI 3-Excutive Directo r ermanent OfficeCp Recent Economic DeveloD fe Copy and Prospertc of M&AbAXAi LAIMA I -.9 r~ % L--F -.I I U 11-4114V v I January 14, 1975 itU4111y rurogdrams DepaLtmnLuLt 11 Eastern Africa Region Not for Public Use Document of the International Bank for Reconstruction and Development international Development Association _ _11 ___ This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report.  CURRENCY UNIT The Malavi Kwacha (K) K3CGAN(YE RATE The Malawi Kwacha was pegged to thp npond. sterling intil Novem.ber 1973. Since then, it has been calculated on a daily basis according to a weighted average of the TUS '$ and the pundn- For the prn-ose of this rep-ort,- tihe foel ova-I exchange rates have been used 1964-66 1967 1968-70 1971 1972 1973 1974 K1.00=US $ 1.40o 1.383 1.200 1.216 1.260 1.173 1.200 US 1 .00=K 0.7?1 0.723 o.833 0.822 0.794 o.853 0o833 FISCAL YEARS January 1, December 31 until end 1968 Januarv 1. 1969 March 31. 1970 (15 months) April 1 - March 31, since 1970 WE;T.TlTS ANTl MEASTTRES Al thouih M>l.ri is offini nl lv ronvert.ina from the nRritiih Tminn?r_al system of measurement to the-metric system, practically no metric units are as yet in commnn usage. Many nrnits in this report have had to be converted. 1 kilometer = 0.62 mile 1 square kil. = 0.3861 square m,ile 1 hectare = 2.47 acres 1 r+tr c +on = 1.10 long ton 0.984 long ton  TABLE OF CONTENTS Page No. COUNTRY DATA SUMMAR-Y AND CONCLUSIONS .......... ........ . i L iii I. * INTRODUCTION .................................. . II. RECENT ECONOMIC DEVELOPMENTS ........... .......... A. The Growth of the Economy ......* ........ 1 Output ...... ,.. ........ Savings and Investment ................ 3 Employment .. . . .......... 4 B. Income Distribution ........ 6 C. Public Finance . ............... 8 D. External Financing . ......... * ..........*.*.*...*.*. *, 12 III. MAJOR SECTORS ...16 A. Agriculture ................ 16 Smallholder Agriculture .... ............ 18 Estates Agriculture .................. 21 Policies and Future Developments .22 B. Industry ............., , 23 C. Education and Training .... ** ............... 27 D. Transport ........................ . 30 IV. POLICY ISSUES AND PROSPECTS .34 ANNEX 1 - Income Distribution STATISTICAL ANNEX MAP This report is based on the findings of a mission that visited Malawi in April/May 1974. The mission was composed of Roger Kev (mission chief), Gottfried Ablasser (agricultural economist) and Andrew Hilton (economist).   LIST OF TEXT TABLES 1. Composition and Growth of GDP by Sector 2. Investment and Savings 3. Structure and Growth of Employment 4. Central Government Finances 5. Summary Balance of Payments 6. Selected Agricultural Indicators 7. Crop Production from Estates 8. Indes of Manufacturing Output 9. Projected Production of Major Crops 10. Projections of GDP by Sector 11. Projected Savings and Investment 12. Projected Real Resource Gap and Financial Gap 13. Projected Balance of Payments 14. External Public Debt and Debt Service   Page I of 3 paegs ODMnRY DATA - KALAWI AMLA PCUI.ATION NSITY !IR 1,8km 2e Tr.7__liic (eid-197 2) 102 Psr ka2of arable land SOCIAL NDIATOfiS Reoferenoe Countries NKIAVI ~ Somali Tansania Ys... MNF ZRE OAflT U (,%TIAS BASIS) 1 .. i /a BOL /a 120 3,670 A DUMORAPMC M MM- rate (per tousand) ..54 Lb [.7 47 /9 14~.4 Crude teath rate (per w.ocusansd) . 22 22 / . rnfant mertaility raet (Per thousand lise births) I8.8 Ld 16m65i 1, 38 39 11. 3 73 Gpo., Me ductiw. rate j2 3.2 3.2 3.0 3.2 1.2 Population growth rate tj2.2 2.6 2.4A 3.0 0 7 PPpulation growth rate - urban 7Lf 7 5 .. ~6.2~ Age structure (persan t) 0-in L.SA 8./ 146 C 23.7 15-66 5o7 527 52 5 4 65 ced over S7I 4. 234 .9 Dersendocy ratio 1.0 X 0.9 ~Ti 0.9A~ 0.9 Tc.m 0.8 Urban PoPulation as psroent of total ..6 ~.6/bco 80 Family planning: NM of acoeptor cumulativs (thou..) .. No. of uoors (1 of married wmen) .. ToMMbor form. (thouaaods) .. 2,300 If 1,002 La 5,750 /c.h 2,100 lo Percetage employed in agriculture .8 808/ch 1 Percentage umemployed 8. if 20 88. 3c l I DISTRIBUTION Peroent Of naionlh6J income reoeived by hbltest 5% ..27 ~.X,_ a . 34. 22 9.! Pearoeart of national moons received by highest 20% 44i./ai . 60 / 18 5 Peroent of nainlinocome reneived by lowest 20% 4.1 . L Percent of national income received by lowest 40% ..21Jsa IC1. Ic 1. /.o MISMtI?0 0F LARD OiNCmHI A owned by top 1(5 of aes... o-med bY aaelleat 10% of cvaers .. N M P ca 35,000 A 75,250 21,180 fl,570 /h 690 Population Per borning person . 16.090 a 3 .220 /u 1,890 Th 210 population per hoepital bed 94.0 v 68.0 570 - 702 7h 100 /W Per capita calorie supply as % of(requiramonta 78 98 72 Li 69 119 Per capita Protein ouPPIY, total (puce per day) L6 9 /x 63 57 y 1.3 89 Of Which,eaniua and pulse 6 7 36 Death rats 1-4. yeers /76T 9. 27 .. 23 0.62 Aijia 8 prmay chool enrafleent ratio 39 37 10 37/ 98 Adjusfted co iayschool enrollmeont ratio 1 3 4. 3/9 87 Tears Of a8ooling provided, firsft and cecond level IL. 11. 11-18 13 13 Vocational enroll1Ment AS % of sac, school enrollment 21. 3 2 baa 3 /q 32 Adult literacy rate % 5ZZ. 7ob.ac ..- 99 lao Ave-rage Mc. of persons per rcosa (urbans) .. 1.9 Ic . 0.9 /0d percent of occupied units without piped water ..78/9. 4E 3a Access to electricity (as % Of total PuPulation) ..16 /c. 97 /ad Percet of tura1 population conncted to elcrct . 0.0 _ 1 Lciv ra per 1000 population 9 /e 20 18 15 /94f 325 Passenger cars per 1020 population .2 /at 2 3 /9fj 219 /af Electric power consuaption (kvho p.c.) 10 ar 32 7 29 lb 2,981 newsprict censumptim p.c. kg per year -0.03 /ad 0.01. 0.6 Z& 0.1 30.3 Motess Figures refer either to the latest periods or to acocousit of enviromsental temperature, body veigbt., and the latest years. latest periods refer in principle to dIistribution by age man sex of national populations. the years 1956-60 or 1966-70; the latest years in pmi- /6 Prtein stiowdards (requir.ementso fur all countriesas tb ciple to 1960 and 1970. lished by USDA Economic Research Sermite provide for~ a mininmu A9 The Per Capita DsNP esatimte ias at market prices for allowance of 60 grams of total protein per day, and 20 gras of ea'c other thani 1960, calculated by the same coniversion anial- and pulse protein, of which 10 pens should he anima technique as the 1972 World lank Atlas. pr"t.ain. Th-aseat.andazds &~are msht!mrta hoeo L2 Averags number of daughters per women of reproductive grass of total protein and 23 grans of ani-al protein as an, age, average for the world, proposed by TAO in the Third World Food F Ppulation growth rates a"e for ths decades ending in , Survey. __ 1960 end 197. IL, Sono tdes.., haveo *aggeaed th,tad t.rtso cide Rafitic of undsr 15 ansd 65 end over age brackets to apes 1 through 4. ma be .sed as a first approxiatino index of those in labor fomes bracket of ages 15 throwu)h 68.. malnutrition. ~,PAO reference atarndarda represent p1sysiologhcal re. /8 Percetage enrolled of cor~respoding p-opulation of sched1 age quiremects for norwel activIty and health, taking asdfra o ec o" ty /a 1,,; 1 19711 /c 19671 Ld l?531 4e 1?60-72; If 7cirtrate; /p All township. snd tmc, planning areas an- all district centersa; & Tanganyika; aL 15 gazetted townships, 1957-67; Lj Agglomerations of 20D or more inhabitants; /9 1962, UK estimate for African population; a9 1966; /m Ratio of population under 15 and 65 and over. are berckats ino those in lq-&8 age bracket; LA Ratio of population under 15 and 65 and over to, total labor force; La. 16 gesetted townsships; 1971 La1968; LL Urban only; Economically active population; L 1962; Lt Includes midwives; /' 1963; /w 1969; ~A 1961-63; 196L-66; Exicluding Faeroe Isands and Greenland; /an Ehcludes private cocastional schools; /ab 15 years and over;i~ Defir tin,,,. 16!,,.,., A 96Sni. L