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Poor-rich gap widens

Malawi’s richest 10 percent are in control of about a third of the national income, highlighting persisting inequality gaps, an Oxfam study report has shown.

In contrast, the 2024 report launched yesterday also found that the poorest 10 percent hold less than two percent of wealth.

Mihowa: The economy is not growing fast enough | Nation

The report further observes that despite progress in reducing poverty, Malawi still has a significant proportion of its population living below the poverty line, with approximately 51 percent living on less than $1.90 per day as reported by the World Bank in 2020.

Reads the report in part: “Malawi’s wealth is concentrated in the hands of a few individuals, with the richest one percent holding a disproportionate amount of wealth [Afrobarometer, 2019].

“There are concerns about the role of inheritance and cronyism in wealth accumulation in Malawi, with some individuals and families holding significant economic and political power.”

The report attributes  the situation to the country’s tax policies which favour wealthy citizens and large corporations, worsening income inequality.

It further reiterates long-standing observations that the country’s healthcare system is characterised by inequality, with the wealthy having better access to quality healthcare services.

In an interview yesterday, Oxfam in Malawi country director Lingalireni Mihowa said Malawi is grappling with growing levels of inequality, exacerbated by several critical issues.

She said: “The country faces limited fiscal space, heavily constrained by the burden of debt servicing, which diverts resources away from essential social services like healthcare and education.

“Over the past five years, the country has also experienced increasing humanitarian catastrophes, including floods and droughts, which have further deepened the divide between the rich and the poor. Additionally, current tax policies disproportionately burden the poor, contributing to the widening inequality gap.”

Mihowa pointed out that the legacy of colonialism has also played a significant role in this inequality as the unearned wealth accumulated during colonial times has left a lasting impact, with resources extracted from Malawi enriching the colonisers while leaving the local population impoverished.

“That’s why, to promote social and economic justice, it is imperative for Malawi to adopt progressive taxation, ensuring that the wealthy contribute their fair share.

“Furthermore, the country must focus on boosting its economy by increasing production for exports, which can create jobs and generate much-needed revenue. Addressing these issues is crucial for fostering a more equitable and just society in Malawi,” she said.

To overcome the challenge, Mihowa said solution lies in growing the economy.

“Key is the economy not growing fast enough and big enough to enable every citizen have a fair share… in addition theft of public resources, losses due to inefficiencies in the public sector and systemic corruption has eroded Malawi of the critical resources that would have helped the country to bridge the divide between the poor and the rich.”

Speaking in a separate interview on the sidelines of a community engagement event during the local Davos Week of Action meetings in Mangochi yesterday, Centre for Social Accountability and Transparency (Csat) head of programmes and policy Albert Lulaka said local policies such as social cash transfers and programmes like the Affordable Inputs Programme (AIP) can help in addressing inequality.

However, he said the programmes’ effectiveness depends on various factors.

 “Poor implementation, corruption or inefficiencies can undermine the impact of these initiatives. The long-term sustainability of these programmes can be uncertain, particularly if they rely on external funding or support,” said Lulaka.

Several measures are used to assess inequality, depending on the context and the type of inequality being examined, such as economic inequality, the Gini Coefficient, and income share ratio, said Lulaka.

This year, Oxfam has extended its campaign to Malawi and established a partnership with Csat to mobilise communities, policymakers, and stakeholders to take concrete actions towards reducing inequality and promoting social and economic justice.

Oxfam’s report also found that the world’s five richest men have more than doubled their fortunes from $405 billion to $869 billion since 2020, translating to a staggering rate of $14 million per hour.

Meanwhile, nearly five billion people have experienced increased poverty.

The report also sheds light on the issue of “billionaire colonialism,” where wealthy nations use their economic power to extract wealth from poorer countries.

According to the report, while the specific findings may not be directly applicable to Malawi, the underlying issues of economic inequality, wealth concentration, policy and governance challenges and social inequality are highly relevant to the country’s context.

Currently, Oxfam is participating in its annual Davos Week of Action, which coincides with the World Economic Forum (WEF) in Davos, Switzerland.

The 2025 WEF meeting is scheduled to take place from January 20 to 24.

Oxfam’s Week of Action aims to highlight and address the pressing issue of global inequality and will be commemorated across the confederation under the theme Inequality, Unearned Wealth, and Colonialism.

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