Malawi’s gross domestic product (GDP) per capita income, a country’s output per person, has continued to decline, a development economists say signals dwindling economic prospects.
Published data from the International Monetary Fund (IMF) shows that the GDP per capita income has dropped over the past four years to $463.73 (about K810 713) in 2024 from a peak of $580.92 (about K1 million) in 2021.
Economists say a higher GDP per capita is generally associated with a higher standard of living.
During the review period, the data shows that economic growth has declined to 1.8 percent from 4.6 percent.
According to the data, economic growth has averaged 2.2 percent, far below the recommended 10.6 percent required to grow the economy to a lower middle income status by 2030, with a GDP per capita mark of abot $1 086 (about K1.9 million) as envisaged in Malawi 2063 (MW2063), the country’s long-term development strategy.
In an interview on Tuesday, economist Milward Tobias observed that population growth over the past years has outpaced income.
He said: “Population growth rate has been in excess of two percent every year and at times hitting as high as 2.5 per cent.
“When population grows at a faster rate than the economy, per capita income declines. Per capita income is lower now because while income has grown, population too has grown faster than income.”
Tobias, who is an independent presidential aspirant, said because of the continued depreciation of the kwacha, GDP has also continued to decline in US dollar terms.
To illustrate the situation, Tobias said a family of two with a total income of K10 000 in one year and used to have K5 000 after equal share, will now have to share K4 000 with an additional family member despite the income growth by K2 000 to K12 000.
Tobias said to reversing the trend, it requires equally growing the economy in line with MW2063 target and strengthening and stabilising the exchange rate.
Speaking separately, Consumers Association of Malawi executive director John Kapito said Malawi needs to work hard to begin to address the current levels of growth.
He said: “Unfortunately currently we are not working towards creating the economic environment we need.
“Malawians are tired of being poor and labelled as such is unhealthy for the youth, it is a recipe for disaster.”
Mzuzu University economist Christopher Mbukwa said in an interview on Tuesday that a declining GDP per capita income is largely due to the country’s population growing at a faster rate than its real GDP.
He said: “In Malawi, population growth is around 2.7 percent annually while GDP growth has hovered around around one percent on average for the past three years; hence, a decline in GDP per capita.
“This situation potentially leads to a declining welfare among the population and quality life dminishes.”
National Planning Commission (NPC), the lead agency monitoring implementation of MW2063, estimates that for Malawi to meet the 2030 goals, the economy needs to grow by an average of 10.6 percent in the next five years.
NPC director general Thomas Chataghalala Munthali is on record as having said Malawi is unlikely to become a lower middle income country by 2030 and may only reach the goal 15 years later if it remains on the current lethargic path.
He said a series of external crises that have spilled over to Malawi and internal catastrophes have derailed the economy from growing at the six percent minimum needed to reach the promised lands.
Munthali said if there is a radical course correction through implementation of catalytic interventions that can help chalk a consistent growth of 6.4 percent then Malawi could achieve the target by 2036—still a six-year drag on the target date.
Otherwise, he said, if government continues on the current trajectory, Malawi will only achieve the target of graduating to a lower middle-income economy with a gross national income per capita of $1 036 by 2045.
