Malawi - history

In 1964, after seventy-three years of British rule, Malawi became an independent nation. The prime minister at the time, Hastings Kamuzu Banda, was elected president for life in 1971 and instituted authoritarian one-party rule.

His control lasted until 1994, when he was defeated by Mr. Bakili Muluzi in Malawi’s first multiparty elections. Mr. Muluzi and his United Democratic Front (UDF) party were re-elected in the country's second multiparty elections in June 1999.

Bingu wa Mutharika, running for UDF Party, succeeded Mr. Muluzi in May 2004 as the President of Malawi. Despite winning only 49 of the 193 parliamentary seats at the legislative election on May 20th, 2004, the United Democratic Front (UDF), has already secured a parliamentary majority by attracting some of the opposition parties into government. Most of the remaining opposition parties — led by the Malawi Congress Party (MCP), which won the largest number of seats in the election (59) — have agreed to form an informal alliance in parliament with the People’s Progressive Movement (PPM), led by Hon. Aleke Banda. Although the government of Malawi has initiated an economic reform agenda, it faces challenges on several fronts: a rapidly growing population, a high HIV/AIDS infection rate (about 15 percent), limited natural resources, high levels of inequality caused by years of an elitist development strategy, and the corrosive effects of recurring droughts, poor resource management, and environmental degradation.

Source : World Bank

Basic Statistics on Malawi (in 2005)

Economy

Malawi's economy is based largely on agriculture, which accounts for more than 90 percent of its export earnings, contributes 45 percent of gross domestic product (GDP), and supports 90 percent of the population. Malawi has some of the most fertile land in the region, and almost 70 percent of agricultural produce comes from smallholder farmers. Land distribution is unequal, with more than 40 percent of smallholder households cultivating less than 0.5 hectares. The country's export trade is dominated by tobacco, tea, cotton, coffee, and sugar.

From 1995 to 1997 Malawi 's government followed good economic policies; but in recent years the pace of reforms has slowed, expenditure control has weakened, and agricultural prospects have become mixed. Tobacco revenues declined in 2000 because of slumping prices, declining yields, and declining quality. This, together with volatile exchange rates, high annual inflation (30 percent in February 2001), and high real interest rates, has resulted in slow growth: about 2 percent in 2000 and -1.5 percent in 2001.

Since taking office in May 2004, President Mutharika has implemented some bold policies to curb fiscal spending and tackle corruption. These policies were also meant to counter the mixed results of the growth-oriented reform program attempted by the previous government over the last two years. Recent measures in expenditure control and right-sizing the government have helped Malawi meet and exceed the end-June 2004 macroeconomic targets. The IMF and the new Government agreed on a Staff Monitored Program (SMP) starting from July 2004. Following strong macroeconomic performance under the SMP, a new PRGF was approved in August 2005. The good performance provided for a gradual reduction in domestic debt and the domestic interest bill for the first year since the late 1990s. However, Malawi 's economy still depends heavily on aid from international financial institutions and individual donors.

Source : World Bank