ATI
COUNTRY PROFILE
Malawi
Malawi is a low economic transformer with an overall ATI score of 20.8, falling short of the African average on all DEPTH dimensions. However, over the past two decades, Malawi has made gains in economic transformation, with notable improvements on technology upgrading and human well-being.
Lilongwe
20.9 million
2.5 %
1.5 %
US $673
Malawi’s Performance on the African Transformation Index
The overall African Transformation Index score measures the five dimensions of DEPTH.
Overall score
20.8 /100
Score change
since 2000
At a glance
- Malawi is a low economic transformer with an overall ATI score of 20.8, falling short of the African average on all DEPTH dimensions.
- However, over the past two decades, Malawi has made gains in economic transformation, with notable improvements on technology upgrading and human well-being.
| Score /100 |
Change since 2000 | ||
 |
Diversification |
31.7 |
+0.7
|
 |
Export competitiveness |
2.1 |
-9.8
|
 |
Productivity increases |
4.2 |
-0.7
|
 |
Technology upgrading |
28.1 |
+14.8
|
 |
Human well-being |
37.7 |
+8.3
|
Diversification of production and exports measures countries’ capability to produce and export a widening array of goods and services.
Score
31.7 /100
Score change
since 2000
At a glance
- Despite scoring slightly below the African average, Malawi has shown some recovery, returning to its pre-2000 score after a period of volatility.
- The country’s economy exhibits limited diversification, characterized by a heavy reliance on rain-fed agriculture and an underdeveloped service sector.
- The manufacturing sector, still in its nascent stage and closely linked to agriculture, contributes only 12.7 percent to GDP.
- The service sector's value addition, meanwhile, has increased from 40.1 percent to 53.5 percent of GDP over two decades. And the combined share of manufactures and services in total exports reached 35.8 percent in 2020, recovering from a low of 21.9 percent in 2009.
Export competitiveness is measured as the ratio of a country’s share in the world’s exports of non-extractive goods and services to its share in world non-extractive GDP.
Score
2.1 /100
Score change
since 2000
At a glance
-
Export competitiveness is one of Malawi's weakest areas. After decades of subpar performance, the score peaked at 11.34 in 2014 before dropping to 2.1 in 2020.
-
The country's non-extractive exports to GDP ratio has become less competitive over the last two decades due to a heavy reliance on low-sophistication agricultural exports.
-
This reflects limited success in diversifying into non-traditional exports and upgrading production technology. Slow policy implementation to support crop diversification, non-tariff barriers, strict capital controls, and high trade costs also constrain exports.
Productivity increases measure the value added per unit of labor in agriculture, manufacturing, and services.
Score
4.2 /100
Score change
since 2000
At a glance
- Malawi is among the least productive countries in Africa, with no significant progress on this dimension. The country's productivity score of 4.2 is about six times less than the African average.
- While labor productivity has doubled in the industry (manufacturing and construction) sector over the past two decades, it has plateaued in the service sector over the last decade.
- The labor productivity of the agricultural sector, which employs about 62 percent of the working population, has declined from $492 to $444 over the same period.
- Low investments in human capital and infrastructure continue to inhibit labor productivity and growth.
Technology upgrading measures the medium-and high-technology content in total production activities and total commodity exports.
Score
28.1 /100
Score change
since 2000
At a glance
- Malawi has made significant progress on the technology upgrading dimension, gaining 14.8 points over the past two decades. However, the country has not made significant strides incorporating medium and high-technology in manufacturing due to its nascent industrial sector.
- The share of medium and high-technology products in total commodity exports increased from 7.13 percent to 38.2 percent in 2015 but declined to 21.7 percent by 2020.
- Most of Malawi's exports remain low in technology intensity, highlighting a lack of complexity in the country's exports.
Human well-being measures economic and social outcomes and enablers in terms of incomes, income inequality, formal employment, and female participation in formal labor markets.
Score
37.7 /100
Score change
since 2000
At a glance
- Malawi is one of the few countries that has seen a consistent increase in its human well-being score over the past decade, although the score of 37.7 in 2020 still falls short of the African average of 42.5.
- While there has been significant growth in income per capita from $422 in 2000 to $549 in 2022, this growth has not sufficiently reduced poverty and income inequality.
- Poverty reduction and job creation have been slow given the economy’s focus on low productivity subsistence agriculture. The lack of decent jobs has led to a decline in the share of females in paid employment.
- The share of formal employment in the total labor force has also decreased, encouraging the rise of low-productivity, low-wage informal businesses in recent years.
Discover more from the ATI
ATI Scorecard
Explore the data behind the economic transformation progress of 30 African countries between 2000-2020.
Growth with DEPTH
Explore the ATI in DEPTH and see how African countries performed on each dimension between 2000-2020.
Methodology
Learn more about our methodology, sources, and how we calculate the index.
Country Profiles
To explore the results of the index in greater detail and provide context and analysis, the ATI report includes 11 case studies.
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