The World Bank has warned that Malawi and other developing countries risk remaining entrenched in endemic poverty by 2050 unless they adopt measures to address persistent economic challenges that have stalled progress.
The warning is contained in the World Bank’s analytical chapter, ‘Falling graduation prospects’, which is part of its forthcoming Global Economic Prospects Report.
The Bretton Woods institution has identified fragility, conflicts, climate change, fiscal vulnerabilities and declining productivity as key obstacles to economic advancement in 26 low-income countries, including Malawi since the start of the century.
Reads the report in part: “Low-income countries’ governments lack the fiscal space to undertake the much-needed investment push.
“Domestic impediments to growth are compounded by a less favourable external environment compared to that of former low-income countries that achieved middle-income status in recent decades.”
Malawi’s gross national income (GNI) per capita has risen from $230 (about K402 730) to $640 (about K1.1 million), but remains below the $1 145 (about K2 million) threshold required for middle-income status.
Without tailored reforms, the World Bank cautions that Malawi and similar countries are unlikely to achieve this status before 2050 and has recommended fostering peace and stability and implementing market-oriented reforms to spur growth.
“Although institutions do not need to be fully developed to initially enter an acceleration phase, policies promoting macroeconomic stability, private enterprise and effective governance are crucial for sustaining growth,” reads the report.
In an interview yesterday, Scotland-based Malawian economist Velli Nyirongo attributed the country’s stagnation to internal structural and governance issues.
He urged authorities to prioritise transparency, accountability and institutional capacity to create an environment conducive to growth.
Said Nyirongo: “Externally, global economic shifts and trade dynamics pose both risks and opportunities.
“Leveraging Malawi’s position within regional trade blocs such as the African Continental Free Trade Area could unlock new markets for Malawian products.”
Meanwhile, National Planning Commission director general Thomas Munthali, whose organisation is lead agency of Malawi 2063 (MW2063), the country’s long-term development plan, has projected that Malawi could achieve lower middle-income status with a GNI per capita of $1 036 (about K1.8 million) by 2045 if the current growth trajectories of less than six percent persist.
However, he warned that achieving the 2030 target outlined in the MW2063 would require annual economic growth of at least 10 percent over the next six years.
He said: “Private sector dynamism and mindset change remain critical enablers, yet these areas have the highest number of unimplemented interventions.
“Delays in economic infrastructure projects, including those in the transport sector, are also holding back progress.”
Lilongwe University of Agriculture and Natural Resources agriculture economist Horace Phiri called for radical transformation of the agriculture sector to achieve robust growth.
“Malawi will not progress until governments stop funding activities driven by political interests,” he said..
Without immediate and sustained reforms, experts warn, Malawi risks missing key development milestones, prolonging its economic stagnation.
