The World Bank says Malawi’s progress in addressing poverty has stagnated over the last 15 years, which is in contrast with the rest of sub-Saharan African (SSA)countries.
The Bretton Woods institution also said both poverty and extreme poverty are most acute in the country’s Southern Region, with Shire Valley having the highest incidences of extreme poverty above 80 percent.
The global multilateral lender, which is Malawi’s largest creditor, said this in its latest five-year blue-print for Malawi, the Country Partnership Framework (CPF), which spans from 2021 to 2025. It replaces the expired Country Assistant Strategy (CAS).
Reads the report: “Progress in addressing poverty and vulnerability has stagnated in Malawi over the last 15 years in contrast with the rest of SSA.
“National poverty has seen a modest reduction from 52.4 percent in 2004 to 51.5 percent in 2016. While Malawi’s poverty rate [based on the $1.90 threshold] has reduced by three percentage points during this period, the rate in the SSA region has reduced by more than 13 percentage point.”
The country’s national poverty line is calculated using a basic needs basket, whose cost in 2016 was equivalent to $1.36 per person per day in comparison to the $1.90 international poverty rate as defined by the World Bank.
While the international poverty lines are used for cross-country comparisons, the national poverty line is usually preferred for country-specific analysis.
The World Bank analysis on Malawi poverty comes at a time the country’s new long-term development plan, Malawi 2063, which was launched on January 19 by President Lazarus Chakwera, has also acknowledged that poverty has remained persistent over the years and is still posing a key challenge to the country’s development efforts.
Analysts on Tuesday also corroborated the World Bank’s observation, stating that the country’s economic performance over the years since independence in 1964 has failed to translate into improved livings standards of many Malawians, due to poor governance (corruption), low levels of per capita income and public sector indebtedness.
“According to the emerging data from the Integrated Household Survey 2019/20, poverty reduction continued to stagnate in Malawi even before the Covid-19 crisis. The share of the population below the international poverty line of $1.90 per day has decreased from 69 percent in 2017 to 68 percent in 2019,” reads the World Bank report.
The bank has described poverty as mainly a rural phenomenon, adding that growth has not translated into shared prosperity over the past years.
The vast majority of poor people estimated at 95 percent of the entire population are located in rural areas.
While urban poverty increased from 25 percent in 2004 to 26 percent in 2016, rural poverty has increased from 56 percent to 60 percent over the same period, it says.
“Rural poverty is heavily influenced by climatic shocks and the degradation of the natural environment. Both poverty and extreme poverty are most acute in Malawi’s Southern Region, which was affected by devastating floods and drought in 2015, 2016 and 2019.”
International development expert Peter Yakobe in an interview on Tuesday described the observation by the World Bank as worrisome, calling for the urgent need to reverse the situation.
He said: “Of course not all poverty is the same, some people have become poor not because of what they have done or even failed to do, but because of what has been done to them.
“So given the complexities involved in poverty alleviation, we need to use a multi-disciplinary approach that brings together research, policy and practitioner communities.”
Yakobe called on the World Bank and other development institutions to start integrating the poor into the development process.
Economist Gowokani Chijere-Chirwa, who teaches economics at Chancellor College agreed with the World Bank observation, saying that available data show that despite huge spending in key sectors of the economy, the reality on the ground shows that Malawi is grappling to tackle poverty and inequality.
A recent analysis by The Nation showed that between 2009 and 2019, government spent about K8 trillion—equivalent to the nominal size of the economy—an outturn that the analysis found largely worsened Malawians’ wellbeing.
On average, per capita income in Malawi stood at $441 over between the period under review, well below the $1 000 that the expired Vision 2020 envisioned to achieve for Malawi.
Professor of economics at Chancellor College Ronald Mangani recently blamed the country’s economic woes and underdevelopment on multiple factors, including lack of the country’s economic independence,and neoliberalism.