Poverty data should drive change of course

Data in the Sixth Integrated Household Survey (IHS6) the National Statistical Office (NSO) unveiled on Friday in Lilongwe present a paradox where a marginal decline in national poverty to 47.3 percent masks a sharp and concerning rise in ultra-poverty from 20 to 24.3 percent.

Each country defines the national poverty line based on specific economic and social circumstances to reflect the local cost of living and societal standards. In Malawi, the ultra-poor or poorest of the poor survive on a projected daily consumption value of less than $0.70 (about K1 225.70) to $1 (about K1 751) per person.

The World Bank pegs the international poverty line at $3 (about K5 253) based on 2021 purchasing power parity, an economic theory that states that a basket of identical goods should ideally cost the same in any country when currencies are exchanged.

In Malawi, about 75.4 percent of the population lives on less than $3 per day and roughly 71.3 percent survive on less than $2.15 (about K3 764.65) per day, according to the World Bank.

During the presentation of IHS6 findings, Commissioner of Statistics Shelton Kanyanda attributed the overall decline in poverty rates to lower costs of meeting minimum calorie requirements, enabling households to afford healthier diets at lower cost. On the rise in ultra-poverty, he said it presented a more complex picture given that their numbers have increased at a time the poverty rate overall has declined.

The survey has also painted a gloomy picture of food security with the number of households experiencing food shortages rising from 48.4 percent in 2010 to 75.7 percent in 2024, meaning that three in every four households now face food shortages.

In the run-up to the court-nullified 2019 presidential election and the court-sanctioned fresh presidential election of 2020, fallen Vice-President Saulos Chilima coined a campaign mantra of ‘kudya katatu [three meals a day]’ that stirred excitement among some voters.

SKC would surely have frowned at the IHS6 finding that the number of adults affording three or more meals a day has dropped from 53.7 percent in 2019 to 39.4 percent in 2024 with more than half now surviving on two meals a day.

By all means, these statistics are a cause for worry, particularly for a country geared to transform to lower upper middle-income status by 2030 and upper middle-income by 2063 as espoused in Malawi 2063 (MW2063), the country’s long-term development strategy that seeks have an inclusively wealthy, self-reliant, industrialised country by the target year.

From the IHS6, one sees deepening inequality and the increasing vulnerability of poor households to climate-induced shocks that have slowed economic growth in the past decade.

Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha acknowledged the daunting task and proposed measures to ensure speedy response to shocks. He suggested annual poverty surveys as opposed to the current arrangement where they are conducted in three-to-four-year cycles.

While it is a plus that literacy has significantly improved from 53.8 percent in 2010 to 71.6 percent, an educated populace without jobs is a ticking socioeconomic time bomb. To turn our fortunes around and meet MW2063 goals, we must aggressively create youth opportunities through investments in robust productive sectors.

This year, Malawi will be celebrating 62 years of independence from Britain on July 6. Every Independence Day, the question that lingers in my mind is: What have we achieved? My honest response has often been that we keep moving in circles as a nation, making three steps forward and taking two backwards.

Between 1964 and 1994, founding president Hastings Kamuzu Banda passionately encouraged Malawians to engage in agriculture as a key driver of growth with the ‘chuma chiri mu nthaka [agriculture is key to economic growth]’ slogan.

Today, Malawi Government talks about ATMM standing for agriculture, tourism, mining plus manufacturing as key catalysts to economic growth. In reality, though, manufacturing itself is struggling with a Malawi Confederation of Chambers of Commerce and Industry study suggesting that capacity utilisation is on the decline as over 51 percent of manufacturing and business firms reported operating at less than 50 percent of their production capacity.

Naturally, this limits their ability to produce goods at a competitive scale or participate in export markets.

Malawi has the potential to achieve greater prosperity by aggressively diversifying its agriculture away from heavy tobacco reliance, tackling deep-rooted corruption, investing in robust climate resilience and prioritising industrialisation, manufacturing over the importation of finished goods.

To turn around the fortunes and reduce poverty as aspired in MW2063, the economy needs to create opportunities for the youths through jobs, entrepreneurship and investment in productive sectors. Unfortunately, industries are shrinking and recurring shocks, including climate-induced ones continue to undermine the country’s development aspirations under MW2063.

However, all ain’t lost. Burkina Faso provides testimony that leadership is everything as the country has rapidly transformed its economic fortunes under Captain Ibrahim Traoré by pursuing aggressive resource nationalism, taking State control of major mining and cotton assets.

Malawi can do the same. It is entirely doable provided the leadership sets the right priorities and finds the courage to act.

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