Malawi - Current economic position and prospects

RESTRICTED FIDE COPY Report No. AF-68a This report was prepared for 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 The report may not be published nor may it be quoted as representing their views.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 CURRENT ECONOMIC POSITION AND PROSPECTS OF MALAWI November 20, 1967 \ Africa Department /0  CURRENCY EQUIVALENTS Currency Unit - Malawi Pound (ML) US$1 = ME 0. 357 US$ 1 million = ML 357, 143 ME 1= US$ 2.80 ME 1 million = US$2, 800, 000  This report was prepared by a Mission which visited Malawi in IMay-June 1967, consisting of Messrs. John A. Edelman, Paul Chen-Young, Attila Karaosmanoglu and John Scott.  TABLE OF CONTENTS Page No. BASIC DATA i SU1MARY AND CONCLUSIONS iv I. RECENT ECONOMIC DEVELOPIENTS 1 Introduction 1 Trends in Production 2 Exports 5 Imports and National Expenditure 5 Capital Inflow and. Domestic Savings 7 Trends in Public Sector Finance 8 Monetary Developments and the Overall Financial Situation 12 II. DEVELOPIJENT PROBLEMS AND PROSPECTS 14 Introduction 14 The M4ain Productilre Sectors 16 .Agriculture 16 Manufacturing and Mining 18 Invisible Earnings Prospects 19 Summary of Output and Exports Prospects 20 The Main InfrastrTLctural Sectors 21 Transport 21 Power 22 Education and Health 22 Housing and Government Building 23 Overall Investment Prospects 23 III, PROSPECTS FOR NATIONAL EXPENDITURE AND FINANTCE 25 National Expenditure, Savings and Imports 25 The Outlook for Public Saving and Finance 26 The Need for Local Currency Financing 31 The Overall Outlook for External Finance and the Terms of Aid 32 IV. STATISTICAL APPENDIX Tables 1 - 32A Map of Malawi  BASIC DATA ON THE MAIAWI ECONOMY AREA Including lakes 45,747 sq. miles Land area 36,448 sq. miles Iand suitable for cultivation 20,491 sq. miles FOPUIATION Mid-1966 Total in country 4,042,412 Migrant labor working abroad 270,000 Ilon-African population 17,926 Estimated annual average growth rate 3 percent Urban population (as percentage of total population) 5 percent 1955 1960 1966 Density of population per square mile 77 90 111 Per square mile of land suitable for cultivation 137 161 197 GROSS DOYIESTIC PRODUCT Real Growth Rates %