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Malawi losing fight against poverty

Is the country making any successful strides towards poverty alleviation?
Is the country making any successful strides towards poverty alleviation?

Only two people out 100 graduate from poverty in five years and an economist has called on stakeholders to do more to ensure that the underprivileged enjoy the benefits of economic growth.

Speaking during the 14th internal auditors annual conference on Thursday in Mangochi, Innovations for Poverty Action (IPA) country director Thomas Munthali said although Malawi’s projected economic growth compared to some its neighbours is better, few people are enjoying the benefits.

Available statistics indicate that the economy is on rebound with a GDP projection of 5.5 percent this year after a growth rate of five percent in 2013 and 1.8 percent in 2012. Malawi’s GDP averaged about eight percent between 2006 and 2010.

But according to National Statistical Office (NSO) third Integrated Household Survey (IHS3) released in 2011, an estimated 50.7 percent of Malawi’s population is impoverished, down from 52.4 percent in 2005.

Between 2005 and 2011, the Gini coefficient—a measure of income distribution—worsened sharply from 0.39 in 2005 to 0.45 an indication that a few people were getting richer with the poor getting poorer.

The IHS3 also indicates that 25 percent is ultra-poor—below $1 per day—and cannot meet the minimum standard for daily-recommended food requirement.

According to the IHS3, poverty rate is greatest in the Southern Region at 63 percent followed by the Northern Region at 60 percent and Central region at 49 percent while poverty in urban stood at 17 percent and rural poverty at 57 percent.

Explaining reasons for the poverty levels, Munthali noted that public spending is inefficient and poorly targeted, the country has weak governance institutions while investment climate constraints hinder private sector growth.

The Human Development Report released recently also indicates that Malawi did not perform very well on the Human Development Index (HDI)—a composite index of life expectancy, education and income—with a marginal improvement to 0.414 in 2013 from 0.411 in 2012.

Specifically, the report indicates that life expectancy at birth improved from 54.8 years in 2012 to 55.3 years in 2013, while Gross National Income (GDI) per capita worsened from $774 in 2012 to $715 in 2013.

A recent survey by NSO also indicates that earnings in Malawi are skewed with a few people earning more than the average person.

However, President Peter Mutharika speaking during his inauguration said the government will take bottom-up approach that involves and directly benefits ordinary people.

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