The standard of living for the majority of Malawians is being eroded as per capita income, the average income per person after adjusting for inflation, has continued to decline, development economist Dalitso Kabambe has said.
His sentiments follow published data from the African Development Bank (AfDB) 2026 Malawi Country Report, which shows that Malawi’s real per capita income declined by 0.8 percent over the past five years.
In a written response on Wednesday, Kabambe, a former Reserve Bank of Malawi governor and UTM Party president, said Malawi’s situation reflects weak fiscal, monetary, exchange-rate and real-sector policies, external shocks and population growth outpacing the 2.3 percent gross domestic product (GDP) growth, leaving up to 75 percent of Malawians below the poverty line.
Typical sign of poor living standards in the country. | Nation
He said at independence in 1964, Malawi’s per capita income stood at about $210 (about K368 000 at the current exchange rate), compared with $86 (about K151 000) for China. However, Malawi now stands at around $584 (about K1.02 million), while China has surpassed $14 890 (about K26.1 million).
Said Kabambe: “When people earn less than $600 [about K1.05 million] a year, they struggle to afford food, decent housing, education, healthcare, clean water and electricity.
“At national level, low per capita incomes also weaken government’s capacity to raise domestic revenue. You cannot tax an economy into prosperity.”
He said with subdued 2.3 percent growth, 33 percent core inflation, acute forex shortages, 91 percent unemployment, 75 percent of the population living below the poverty line and public debt at 91 percent of GDP, “Malawi’s economy remains in ICU”.
World Bank data show that economic growth has averaged 2.2 percent, far below the recommended 10.6 percent required to grow the economy to lower-middle-income status by 2030, with a GDP per capita target of about $1 086 (about K1.9 million).
Economists say despite Malawi aspiring to transform into a lower-middle-income economy by 2030 and an upper-middle-income economy by 2063, the economic growth rate, averaging 1.8 percent, is insufficient to foster development in a country with an annual population growth rate of 2.7 percent.
Mzuzu University economics lecturer Christopher Mbukwa observed that the Malawi 2063 (MW2063) First 10-Year Implementation Plan has a target of Malawi reaching lower-middle-income status, but so far, it has not reduced poverty five years after it was launched in 2021.
Earlier, the National Planning Commission (NPC) conceded that Malawi’s ambition to become a middle-income economy by 2063 is being undermined by a widening mismatch between economic growth and rapid population expansion.
