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Mission Malawi: The Pertinent Issues and Challenges in Malawi Today

In the second part of our Mission Malawi series, we at Pangea Resourcing take an urgent look at those challenges currently faced by the nation today. From health to infrastructure, we focus on where the country needs development, as well as areas for potential investment and success.

July 2019

Mission Malawi: The Pertinent Issues and Challenges in Malawi Today

As one of the world’s least developed and most impoverished nations, Malawi is a country that has its fair share of challenges to overcome. For investors and speculators, therefore, the potential risks often outweigh the potential for investment, thereby leaving the nation to struggle with its economic performance. With 85% of the population living in rural areas and heavily reliant on the agriculture industry, this is a nation that is battling to pull itself away from its status as one of the poorest countries in the world.

But what are the challenges that cause the nation to find itself constantly fighting to develop? And what are the potential areas for investment opportunities? Surely there’s scope for Malawi to become part of Africa’s ever-expanding players in economic success? We take a look at some of those issues that add to the complex landscape of this untapped nation.

 

Health

Like so many impoverished nations, Malawi is a country whose healthcare and rapidly growing population are having an impact on its economic and social structures. While the past two decades have seen significant improvements in terms of care - for example, the percentage of children delivered in a health facility jumped to 91% in 2015 from 73% five years earlier - issues remain; chronic malnutrition impacted 37% of children in 2015 and just under five million cases of malaria are reported annually. With a shortage of qualified professionals in situ, as well as economic constraints, the burden on the healthcare system is startling.

 

Education

A free public school system has been in operation in Malawi since 1994, yet the transition of those progressing from primary to secondary education remains low. In fact, the primary school completion rate for 2016/17 was just 53%. The factors affecting this completion rate range are those that are all-too common to many of the nation’s issues: poverty and health.

For female students, meanwhile, childhood marriage and pregnancy are often contributors to the ending of education, with the publication of the Malawi Economic Monitor (MEM): Investing in Girls’ Education report finding that nearly four in ten girls marry by the age of 18. The resulting lower wages for women, population growth, and higher poverty all contribute to the country’s economic woes. With the change of child classification from 16 to 18 in 2017, however, it is hoped that the number of child marriages will drop and thus help female students continue their educations.

Poverty

With its reliance on the agricultural industry, and the subsequent impact of volatile climates, poor economic growth, and increasing population, poverty remains one of the biggest maladies to affect the people of Malawi. National poverty, for example, stands at 51.5% (as of 2017), with the south rural areas of the country suffering the most. Global Finance Magazine, meanwhile, identified the nation as recently as April 2019 as being the fourth poorest in the world, with its per capita GDP standing at just $1,234. In contrast, the UK’s GDP is some 3691.09% greater at $46,782.

 

Energy infrastructure

Investment in the energy industry and infrastructure is a clear necessity to improving the quality of life throughout Malawi. At present, approximately 11% of the 19 million population have access to electricity, with only 1% of the residents in rural areas able to access it. These figures demonstrate that Malawi is one of the most severely constrained in sub-Saharan Africa, with the Electricity Supply Corporation of Malawi (ESCOM) now facing competition from a number of potential developers who are developing solutions within solar, wind, hydro, oil, coal, and biomass sectors. Overall, the aim of Malawi’s Integrated Resource Plan is to have 30% of the population enjoying access by 2030.

 

The beauty and potential for Malawi

Despite the obvious hardships and challenges faced by the Malawian people, this is a nation that is renowned as being the ‘warm heart of Africa’. In fact, the friendliness of the people is integral to the nation’s growing popularity as a destination for tourists. The tourism industry itself only contributes approximately 7% to the nation’s GDP, with agriculture still the main industry of note - and tobacco and tea the key exports.

There is, however, scope for investment and development throughout the country. With rich and beautiful natural landscapes, extensive wildlife, and eye-catching mountain ranges, there is plenty to attract visitors; and, with infrastructure for industries such as energy calling out for investment, the opportunities for overseas investors are plentiful.

 

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