COUNTRYAAH, Malawi is a prominent agricultural country. Despite
problems with a low level of education, few exploited
mineral deposits, deficiencies in infrastructure and an
import-dependent industrial sector, the country has since
independence shown an unusually positive economic
development for Africa. This is mainly due to a sharp
increase in agricultural investment from both domestic and
foreign sources during the 1970s and because the country was
able to benefit from large aid-financed investments.
During the 1980s, the economy was characterized by large
fluctuations as a result of dry periods and political unrest
in southern Africa; inter alia the transport routes were
closed down through Mozambique in 1984. Following pressure
from the International Monetary Fund, Malawi therefore
implemented an economic structural adjustment program during
the latter part of the 1980s. The positive effects of this
were destroyed by the severe dry periods of 1991-92 and
1993-95 and the withdrawal of non-humanitarian aid as a
result of Malawi's failure to respect human rights. During
the 1990s, the World Bank and the International Monetary
Fund continued to play an important role in the Malawian
economy. The eradication of poverty is a central part of
economic policy. The strong dependence on the outside world
and on favorable agricultural conditions make Malawi's
For information on GDP and other business statistics, see
Agriculture is Malawi's most important economic sector
and accounts for about 90 percent of export revenue. About
85 per cent of the economically active population is
employed in agriculture. The sector is characterized mainly
by small-scale self-sustaining agriculture. In recent years,
the government has invested heavily in a program that
includes subsidizing artificial fertilizers, which has led
to increased harvests of mainly maize.
The most important food crop is maize, which is grown by
almost all users. Other important food crops are cassava,
millet, peanuts, rice and legumes. Malawi is Africa's second
largest producer of tobacco and tea.
Plantations for industrial timber and pulpwood have been
developed since the early 1970s. On the Viphya Plateau in
northern Malawi, pine and eucalyptus plantations have been
constructed for future paper and pulp production. The latter
project also includes infrastructure development, including
the construction of a port in Chinteche on Lake Malawi. An
estimated 400,000 hectares of forest are harvested annually,
of which about 90 percent is used for firewood.
Fishing plays an important role in food supply in Malawi,
and the industry employs around 200,000 people. The catches
go mostly to self-catering. Since 2001, Malawi, Mozambique
and Tanzania, which all have coasts on Lake Malawi, have
been working together to manage and conserve the lake's
Findings of bauxite, asbestos, coal, uranium, graphite
and semi-precious stones exist but have not yet been
exploited. Only limestone for cement production is extracted
to any great extent. The most economically interesting
deposit is that of the bauxite in the Mulanje area, which is
estimated to amount to 29 million tonnes of high-grade ore.
However, the costs of road construction and the expansion of
the country's hydroelectric power station have hindered
Waterworks in the Shire River are responsible for almost
all electricity production. The country also has privately
owned diesel-powered generators, of which about 50 percent
are controlled by major sugar plantations.
Of the country's total energy consumption, however, water
energy, oil products and coal account for only 10 percent;
the remaining part is covered by firewood and charcoal.
Nevertheless, oil products are the country's most important
imports. To reduce oil dependency, Malawi has been investing
in ethanol production since 1982. In 2004, Malawi's
electricity grid was connected to the Cabora Bassa power
station in Mozambique.
Malawi has a very limited industrial sector with a major
focus on the processing of agricultural products as well as
goods for domestic consumption. However, the industry is
heavily dependent on imports with regard to raw materials,
machinery and machine parts, which is why it is sensitive to
the country's access to foreign currency.
Malawi has tried to attract foreign investors by creating
a favorable investment climate. However, the limited local
market and limited export opportunities have meant that only
a few companies have exploited the opportunities.
Agricultural products account for more than 90 percent of
Malawi's export revenue. The most important export crops are
tobacco (about 50 percent), tea and sugar. Imports are
dominated by oil products, fertilizers, manu- facturing and
spare parts, pharmaceuticals and agricultural machinery and
Zimbabwe, Mozambique and Belgium are among Malawi's most
important export markets, while South Africa, China and
India are the most important importing countries.