Malawi : economy statistics and industry reports

The performance of the tobacco sector is key to short-term growth as tobacco accounts for more than half of exports.

The economy depends on substantial inflows of economic assistance from the IMF, the World Bank, and individual donor nations.

In 2006, Malawi was approved for relief under the Heavily Indebted Poor Countries (HIPC) program.

In December 2007, the US granted Malawi eligibility status to receive financial support within the Millennium Challenge Corporation (MCC) initiative.

The government faces many challenges including developing a market economy, improving educational facilities, facing up to environmental problems, dealing with the rapidly growing problem of HIV/AIDS, and satisfying foreign donors that fiscal discipline is being tightened.

Since 2005 President MUTHARIKA'S government has exhibited improved financial discipline under the guidance of Finance Minister Goodall GONDWE and signed a three year Poverty Reduction and Growth Facility worth $56 million with the IMF.

Improved relations with the IMF lead other international donors to resume aid as well.

The government has announced infrastructure projects that could yield improvements, such as a new oil pipeline, for better fuel access, and the potential for a waterway link through Mozambican rivers to the ocean, for better transportation options.

Since 2009, however, Malawi experienced some setbacks, including a general shortage of foreign exchange, which has damaged its ability to pay for imports, and fuel shortages that hinder transportation and productivity.

Investment fell 23% in 2009.

The government has failed to address barriers to investment such as unreliable power, water shortages, poor telecommunications infrastructure, and the high costs of services.