Malawi's Surging Economy

By any measure, Malawi is poor. According to the World Bank, Malawians live on less than 180 U.S. dollars a year, have a life expectancy of 40 years and 40 per cent of the population is chronically malnourished.

The mainstay of Malawis economy is agriculture. Tobacco,the main cash crop, accounting for more than 70 per cent of exports, has been experiencing a decline in prices in the last two years. The country now wants to diversify.

President Bingu wa Mutharika, re-elected May this year, for a second term, is hoping to take advantage of opportunities in the world markets .
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"Right now with the green belt, one of our big earning crops will be rice because there is heavy demand. There is a shortage globally. At the moment, the major rice producers, India, Pakistan, Indonesia, the peoples Republic of China and Malaysia are not producing enough. So Malawi can quickly move with this green belt thing and produce more rice. Rice can compete favorably with tobacco in terms of foreign earnings," says the President.

To build a stable economy, Mr. wa Mutharika says his country is looking to harvest other natural resources.

"We are going to go into gold mining. We are going to go into bauxite mining, we have bauxite. We have gold. We have heavy mineral sands. We have emeralds and precious metal," says President wa Mutharika.

Malawi's economy is reported to have grown by an estimated 9.7 per cent last year.

Mwiza Munthali, Public Outreach Director, at the TransAfrica Forum in Washington credits President Wa Mutharika for this growth.

" The government seems to have a strategy, have a vision, some plan. There are some tangible things. Infrastructure than it was five years ago, roads, when I was travelling north and south, the roads don't have as many pot holes , there are new roads and new ones are being built," Munthali says.

The Economics Intelligence Unit, a leading research and advisory firm, has forecast that Malawi will have the world's fastest growing economy after Qatar this year.

Munthali says only time will tell how the future plays out.
Malawian President Bingu wa Mutharika
Malawian President Bingu wa Mutharika

" People have to be careful, when you just look at the growth rates. Is it growth without jobs or with jobs? So we have to be careful on how we look at the figures," Munthali points out.

Malawi's economy has also been affected by the high HIV/AIDS rates. But it has made progress since 2004 in curbing the spread of the disease and President wa Mutharika predicts more gains in the coming years.

" Right now, Malawi is probably the top most country in its success in managing HIV in Africa, if not the world. The rate of infections was going up when we started, then stabilized and now is going down which means the messages are coming through,"says President wa Mutharika.

Many analysts believe Mr. wa Mutharikas success may depend on how he manages the country's political turmoil. A protracted power struggle with former president Bakili Muluzi and leaders of the opposition almost paralysed parliament, prompting a failed impeachment bid and claims of a coup plot.

President wa Mutharika has promised to step aside at the end of his second term in 2014, as required by law. This is expected to re-assure investors and western donors and keep Malawi on the path of growth.