We don't know why Malawi is poor - by Deena Mousa

Under Development

SubscribeSign in

We don't know why Malawi is poor<br>And that’s a problem for forecasting economic growth

Deena Mousa<br>May 12, 2026

152

27<br>21

Share

In 1994, Rwanda’s GDP per capita was $5751. The country had just emerged from a genocide that killed roughly 800,000 people in 100 days, which amounts to about 11% of the population. The educated class had been murdered or fled, infrastructure was destroyed, and the state had collapsed.<br>Malawi in 1994 was poor too, but functioning. Hastings Banda’s three-decade dictatorship had just ended in a peaceful democratic transition. With a GDP per capita of $976, roughly 70% higher than Rwanda’s, Malawi was meaningfully better off than post-genocide Rwanda by any reasonable measure.<br>Thirty years later, Rwanda’s GDP per capita is $3,265. This is nearly six times higher than its 1994 trough, and roughly twice Malawi’s $1,634. Rwanda's GDP per capita has grown by about 4.5% per year in real terms over the past decade, but Malawi's has fallen for three consecutive years.

The rest of the East African comparison group has pulled away too. Kenya’s GDP per capita is roughly $5,800, over three and a half times Malawi's. The sub-Saharan African average is $4,873, also nearly three times. Even within a region full of poor countries, Malawi is unusual.

Subscribe

A few headline numbers:<br>The World Bank ranks Malawi among the ten poorest countries in the world by GDP per capita at PPP.

70% of Malawians live on less than $2.15 a day. Under the World Bank’s revised $3-a-day poverty line, it’s 75%.

Malawi is home to 0.24% of the world’s population but roughly 2% of the world’s extreme poor.

GDP per capita has fallen for three consecutive years (2022–2024). Population growth of 2.6% per year is now outrunning real economic growth.

Roughly 80% of the population works in agriculture, mostly on rain-fed maize plots. About 76% of farms are smaller than one hectare.

Around 15% of the population has access to electricity.

Lots of countries are poor, though. The interesting bit is, we don’t really have a great answer as to why Malawi is.<br>For many of the world’s poorest countries, there’s some obvious issue that is pointed to. Regional or civil war, state collapse, ongoing ethnic conflict, coups, jihadist insurgencies… the list is quite long.<br>But Malawi has been at peace for its entire post-independence history. It has held competitive multiparty elections every five years since 1994 and has experienced peaceful transfers of power across parties. It has no significant ethnic conflict, no separatist movement, no insurgency. It was not a victim of the resource curse, and it has not had a recent mass atrocity. It ranks 107th out of 180 on Transparency International’s Corruption Perceptions Index, which is middling, but not especially bad, roughly comparable to Indonesia and Brazil.<br>Malawi has also long been a darling of donors. Malawi’s aid per capita in 2023 was roughly 2.5x the global average. It is also a member in good standing of SADC, the African Union, and the Commonwealth, on no major sanctions list. There is no equivalent of Eritrea’s seclusion, Zimbabwe’s pariah status under Mugabe, or Sudan’s international isolation.

Donor spending in Malawi is dominated by health, especially HIV/AIDS. The rest goes mostly to agriculture, education, and the Social Cash Transfer Program. The health spending has helped: HIV positivity fell from around 14% to 7% over the PEPFAR era. The rest is weaker in impact, though why would merit its own full post.<br>This is where some readers might object that we do know why Malawi is poor! After all:<br>Agricultural productivity is very low. Around 80% of the population works the land, mostly on rain-fed maize plots smaller than one hectare. Yields per hectare are well below regional potential. Output per agricultural worker is among the lowest in the world.

There is almost no manufacturing. Manufacturing contributes around 10% of GDP, and most of that is food processing, beverages, and cigarettes for the domestic market. No garments, no electronics assembly, no meaningful light-manufacturing-for-export.

Human capital is thin. Mean years of schooling sit around 5. Stunting rates have been at 35-40% for decades, with measurable downstream effects on adult cognition and earnings.

Infrastructure is bad. Around 15% of the country has electricity. Internal roads are rough. Internet penetration is among the lowest globally.

Exports are concentrated in declining commodities. Tobacco accounts for roughly half of merchandise exports, and global demand for tobacco has been falling for decades.

This is all true and well-documented. It is also, upon reflection, mostly a description of being poor rather than an explanation. “Malawi is poor because its agricultural productivity is low” is closer to a tautology than an answer.

Subscribe

There are certainly some candidate theories, and they make...