Malawi’s persistent underdevelopment does not emanate from lack of planning

By Duncan Mlanjira

Vice-Chancellor at United States International University-Africa, Paul Tiyambe Zeleza said Malawi’s persistent underdevelopment does not emanate from lack of planning but there had been renowned and influential development thinkers and policy analysts, whose innovative works nevertheless were underutilised.

Zeleza said this in his key note address at the opening of inaugural National Development Conference at Bingu International Convention Centre in Lilongwe on Thursday, whose theme is ‘Beyond Political Freedom to Inclusive Wealth Creation and Self-reliance’ and was opened by President Lazarus Chakwera.

Paul Tiyambe Zeleza

Zeleza made special mention of Dunduzu Chisiza, who in 1962 convened “what was perhaps the first international symposium on African Economic Development to be held on the continent”.

He took cognizance that the 1962 convention brought renowned economists from around the world and Africa and in attendance was a young journalist, Thandika Mkandawire — who was inspired to study economics and rose to become one of the world’s greatest development economists.

Thandika Mkandawire

“I make reference to Chisiza and Mkandawire to underscore a simple point — Malawi has produced renowned and influential development thinkers and policy analysts, whose works need to be better known in this country.

“If we are to own development, instead of importing ready-made and ill-suited models from the vast development industry that has not brought us much in terms of inclusive and sustainable development, we have to own the generation of development ideas and implementation,” Zeleza said.

He said Malawi’s patterns of economic growth since independence have been low and volatile, which has translated into uneven development and persistent poverty.

“Malawi’s development trajectory has been marked by progress, volatility, setbacks, and challenges. For a long time, Malawi’s problem has not been a lack of planning, but rather a lack of implementation, focus and abandoning the very basics of required integrity in all day to day work.

President Chakwera opening
the conference

“Also, the plans are often dictated by donors and lack local ownership so they gather the proverbial bureaucratic dust. Let us strive to cultivate the systems, cultures, and mindsets of inclusion and innovation so essential for the construction of developmental and democratic states as defined by Thandika and many illustrious African thinkers and political leaders.

In his presentation, he quoted a 2018 World Bank Report that identifies five periods — first, 1964-1979 during which the country registered its fastest growth at 8.79%.

Second was 1980-1994, the era of draconian structural adjustment programs when growth fell to 0.90% and third was 1995-2002 when growth rose slightly to 2.85%.

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Fourth, in 2003-2010 growth bounced to 6.25% and finally, from 2011-2015 growth declined to 3.82%.

“Another World Bank Report, published in July 2020 notes that the economy grew at 3.2% in 2017, 3.0% in 2018, an estimated 4.4% in 2019, and will likely grow at 2.0% in 2020 and 3.5% in 2021,” he continued.

“Clearly, Malawi has not managed to sustain consistently high growth rates, above the rates of population growth. Consequently, growth in per capital incomes has remained sluggish and poverty reduction painfully slow.

“In fact, while up to 1979 per capita GDP grew at an impressive 3.7%, outperforming Sub-Saharan Africa, it shrunk below the regional average after 1980. It rose by a measly 1.5% between 1995 and 2015, well below the 2.7% for non-resource-rich SSA economies. Currently, Malawi is the sixth poorest country in the world.”

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While the rates of ultra-poverty declined from 24.5% in 2010/11 to 20.1% in 2016/17, Zeleza pointed out that moderate poverty rates increased from 50.7% to 51.5% during the same period.

“Predictably, poverty has a gender and spatial dimension. Women and female headed households tend to be poorer than men and male headed households.

“Most of the poor live in the rural areas because they tend to have lower levels of access to education and assets, and high dependency ratios compared to urban dwellers, who constitute only 15% of the population.

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“Rural poverty is exacerbated by excessive reliance on rainfed agriculture and vulnerability to climate change because of poor resilience and planning.

“In the urban areas, poverty is concentrated in the informal sector that employees the majority of urban dwellers and suffers from low productivity and incomes, and poor access to capital and skills.”

Zeleza continued to say that the causes and characteristics of Malawi’s underdevelopment are well-known because performance of the key sectors — agriculture, industry, and services — is not optimal.

While agriculture accounts for two-thirds of employment and three quarters of exports, it provides only 30% of GDP, a clear sign of low levels of productivity in the sector.

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Apparently only 1.7% of total expenditure on agriculture and food goes to extension, and one extension agent in Malawi covers between 1,800 and 2,500 farmers, compared to 950 in Kenya and 480 in Ethiopia.

“As for irrigation, the amount of irrigated land stands at less than 4%. Therefore, raising agricultural productivity is imperative.

“This includes greater crop diversification away from the supremacy of maize, improving rural markets and transport infrastructure, provision of agricultural credit, use of inputs and better farming techniques, and expansion of irrigation and extension services.

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“Commercialization of agriculture, land reform to strengthen land tenure security, and strengthening the sector’s climate resilience are also critical.”

In terms of industry, Zeleza observes that the pace of job creation has been slow, from 4% of the labor force in 1998 to 7% in 2013 and that in the meantime, the share of manufacturing in the country’s GDP has remained relatively small and stagnated at 10%.

“The sector is locked in the logic of import substitution, which African countries embarked on after independence and is geared for the domestic market. Export production needs to fostered as well.

“It is reported manufacturing firms operate on average at just 68 percent capacity utilization. This suggests that, with the right policy framework, Malawi’s private sector could produce as much as a third more than current levels without needing to undertake new investment.

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“After independence, Malawi like many other countries created policies and parastatals, and sought to nurture a domestic capitalist class and attract foreign capital in pursuit of industrialization.

“The structural adjustment programs during Africa’s lost decades of the 1980s and 1990s aborted the industrialization drives of the 1960s and 1970s, and led to de-industrialization in many countries including Malawi.

“The revival and growth of industrialization require raising the country’s competitiveness, access to finance, improving the state of the infrastructure, the quality of human capital, and levels of macroeconomic stability.

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