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USAID Information:
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Malawi
The Development Challenge: Malawi emerged from decades of one-party autocracy to a multi-party democracy in 1994. Fundamental economic liberalization and structural reforms have accompanied this political transformation, although the impact has been uneven. Further economic reforms and the continued development of democratic institutions are needed to ensure stability and consolidation as the country prepares for its presidential and parliamentary elections in May 2004. The outcome of these elections will be critical to future economic and political progress.
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Malawi's political and economic development is impeded by its landlocked status, dependence on a single cash crop (tobacco) for the bulk of export earnings, poor incentives for foreign and domestic investment, a strong legacy of authoritarian leadership, high population growth rate, and low levels of education. Life expectancy at birth is under 40 years. There is a high prevalence of HIV/AIDS (15% of the adult population). The infant mortality rate (104 per 1,000 live births) and the child malnutrition rate (49%) are among the highest in Africa. Only half the population has access to safe drinking water.
Malawi's per capita gross domestic product (GDP) in 2003 is estimated at less than $160, down from $166 in 2001. External debt--primarily multilateral and concessional--was $2.8 billion at the end of 2002, representing 145% of GDP, with about one-quarter of domestic revenues required for debt servicing. Malawi has had Enhanced Highly Indebted Poor Countries status since December 2000, but is not indebted to the United States.
Achievements under Malawi's 2001 Poverty Reduction Strategy Paper (PRSP) have been modest. Malawi has the potential to increase growth and reduce poverty if the Government of Malawi (GOM) remains committed to the PRSP and the International Monetary Fund (IMF) program. Further releases of budgetary support by most bilateral donors are contingent on clear signals that GOM performance in several spheres is improving. The IMF, World Bank, and several bilateral donors approved resumption of financial support to Malawi after a two year hiatus that had resulted from persistent fiscal and monetary slippages. Continued release of financial support by the IMF is premised on improved fiscal performance.
The United States' strategic goals in Malawi are three-fold: to increase economic prosperity and security; to strengthen democracy and human rights; and to address social and environmental issues, in particular, improving health, containing the HIV/AIDS pandemic--which continues to threaten the integrity of all societal institutions in Malawi--and increasing the quality of basic education. Malawi is a strong ally within the southern Africa region and has demonstrated significant potential as a democratic pillar in an unstable region. Malawi continues to support U.S. interests in regional development and political issues. Promoting broad-based and private sector-led economic growth and supporting democratic governance will contribute to a more stable country and region and thus to better business and trading partnerships with Malawi for the United States.
The USAID Program: FY 2004 funds will be used to promote economic growth, with emphasis on agriculture and natural resources management; democracy and governance, particularly strengthening civic education prior to the May 2004 elections; HIV/AIDS, reproductive health, child health and nutrition; and basic education. The 2002-2003 food emergency was a "wake up call" that Malawian farmers must diversify their agricultural production if they are to survive. In FY 2004, USAID will foster additional trade linkages among small farmer producer associations and cooperatives (crops and dairy) and export markets, and will expand the availability of financing for small-scale commercial operators. In all sectors, USAID will increase its work with faith-based organizations representing Christians and Muslims to assure broad-based impact. USAID's democracy and governance (DG) objective will provide support to an inter-faith organization that has become particularly active in civic education in order to provide community-based information and education on citizen rights and responsibilities, with emphasis on encouraging voter turn-out. The health program will continue its partnerships with several faith-based groups to prevent HIV/AIDS through the "ABC" approach (Abstinence, Being faithful, and Condoms) and to provide care and support to individuals and communities affected by HIV/AIDS, including orphans and vulnerable children. FY 2004 health assistance will also target malaria, the number one cause of child mortality, through distribution of insecticide-treated bednets at antenatal clinics. In education, FY 2004 activities will continue to improve teachers' professional skills; develop schools' abilities to respond to the needs of the student population; ensure successful implementation and monitoring of critical reform policies; and help to decrease the impact of HIV/AIDS on the sector. The FY 2005 budget request also responds to the need to address critical needs in DG, health, and education as well as continue to create employment and income opportunities that are necessary to sustain USAID investment in the social sectors.
While USAID program support is small, leveraging impact is high. In early FY 2004, United Kingdom's Department for International Development (DFID) and USAID signed a Memorandum of Understanding wherein USAID will manage a significant proportion of DFID funding for civic education and voter registration in FY 2004, and for civic education and civil society development in the FY 2005-2007 period. USAID also leveraged commercial private sector and other donor resources in three public-private partnerships. USAID anticipated the region's 2002-2003 food crisis, and helped convince the government, donors and implementers of the need for strong coordination and collective solutions to mitigate a crisis.
Other Program Elements: USAID's Democracy, Conflict, and Humanitarian Assistance (DCHA) Bureau's Office of Food for Peace (FFP) provided over 151,000 metric tons of emergency food aid in response to Malawi's 2002-2003 food emergency. The food response is implemented throughout the country by the United Nations World Food Program (WFP) as well as nine U.S. non-governmental organizations (NGOs) comprising the Consortium for Southern Africa Food Security Emergency (C-SAFE). In addition, DCHA's Office of Foreign Disaster Assistance (OFDA) provided almost $5 million to Malawi in FY 2002-2003 in response to the food emergency. Both FFP and OFDA programs have shifted over the past months from emergency to recovery activities. The food and funding are utilized in activities to improve nutrition among vulnerable populations, stimulate agricultural recovery, and enhance community resilience to shocks. The USAID strategy also benefits from an ongoing P.L. 480 Title II program implemented by Catholic Relief Services which is integrated with USAID's economic and health programs. USAID supports the C-SAFE consortium's plans to design an expanded Title II development assistance program that--if approved--would begin in FY 2005. In addition, USAID continues to contribute to the centrally-managed Famine Early Warning System (FEWS) to assist with monitoring Malawi's food security situation.
USAID's Global Health Bureau is funding the International Eye Foundation and the World Relief to provide child health activities in several districts of Malawi. USAID hosts periodic joint meetings with these NGOs. USAID also collaborates with the International Foundation for Education and Self-Help which, with Africa Bureau funding, provides training and volunteers to teacher training colleges and schools in Malawi.
Other Donors: Overall development assistance to Malawi totals about $400 million per year, excluding debt relief. The United Kingdom--by far the largest bilateral donor to Malawi--works in many sectors, including budget support. The USAID program ranks in the second tier of bilateral donors, which includes Canada, Norway, Japan and Germany. Germany focuses on health, education, and democratic decentralization; Norway addresses HIV/AIDS, health, education, agriculture, and natural resources management. Japan concentrates on agriculture and infrastructure. The Canadian program focuses on health, HIV/AIDS, education, and governance and accountability. Multilateral donors include the various U.N. agencies, the European Union, the World Bank, the International Monetary Fund and the African Development Bank. Through the Aid Coordination Group, donor coordination is excellent in Malawi and helps to strengthen government capacity in many areas.
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