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Republic of Uganda

Republic of Uganda

Uganda, officially the Republic of Uganda is a landlocked country in East-Central Africa. It is bordered to the east by Kenya, to the north by South Sudan, to the west by the Democratic Republic of the Congo, to the south-west by Rwanda, and to the south by Tanzania. The southern part of the country includes a substantial portion of Lake Victoria, shared with Kenya and Tanzania. Uganda is in the African Great Lakes region. Uganda also lies within the Nile basin, and has a varied but generally a modified equatorial climate.

Map of Uganda

Uganda takes its name from the Buganda kingdom, which encompasses a large portion of the south of the country, including the capital Kampala. The earliest human inhabitants in Uganda were hunter-gathers. Remnants of these people are today to be found among the pygmies in western Uganda. Approximately 2000 to 1500 years ago, Bantu speaking populations from central and western Africa migrated and occupied most of the southern parts of the country. The migrants brought with them agriculture, ironworking skills and new ideas of social and political organization, that by the 15th - 16th century resulted in the development of centralized kingdoms, including the kingdoms of Buganda, Bunyoro-Kitara and Ankole.

Beginning in 1894, the area was ruled as a protectorate by the UK, who established administrative law across the territory. Uganda gained independence from the UK on 9 October 1962. The period since then has been marked by violent conflicts, including an eight-year-long far-right military dictatorship led by Idi Amin. Additionally, a lengthy civil war against the Lord's Resistance Army in the Northern Region led by Joseph Kony caused hundreds of thousands of casualties.

The official languages are English and Swahili, although "any other language may be used as a medium of instruction in schools or other educational institutions or for legislative, administrative or judicial purposes as may be prescribed by law. Luganda, a central language, is widely spoken across the country, and several other languages are also spoken, including Lango, Acholi, Runyoro, Runyankole, Rukiga, Luo, and Lusoga.

President Yoweri MuseveniPresident Yoweri Museveni

The current president of Uganda is Yoweri Kaguta Museveni, who came to power in January 1986 after a protracted six-year guerrilla war.

Following constitutional amendments that removed term limits for the president, he was able to stand and was elected president of Uganda in the 2011 and in the 2016 general elections

Executive Branch

The power of the Executive Branch is vested in the President of Uganda, who also acts as head of state and Commander-in-Chief of the armed forces. The President is responsible for implementing and enforcing the laws written by Parliament and, also appoints the Cabinet. The Vice President is also part of the Executive Branch, ready to assume the Presidency should the need arise.

Legislative Arm

The Parliament of Uganda derives its mandate and functions from the 1995 Constitution, the Laws of Uganda and its own Rules of Procedure. The Constitution contains articles which provide for the establishment, composition and functions of the Parliament of Uganda and empowers Parliament "to make laws on any matter for the peace, order, development and good governance of Uganda", and "to protect the Constitution and promote democratic governance in Uganda".

Composition
under article 78(1) of the 1995 Constitution prescribes the composition of Parliament as follows:
Parliament shall consist of: Members directly elected to represent constituencies; One woman representative for every district; Such numbers of representatives of the army, youth, workers, persons with disabilities and other groups as Parliament may determine; and The Vice-President and Ministers who, if not already elected Members of Parliament, shall be ex-officio members without the right to vote on any issue requiring a vote in Parliament. Parliament is presided over by the Speaker, and in his/her absence, by the Deputy Speaker both of whom are elected by Members of Parliament from their number.

Judiciary

The Judiciary is the third arm of Government, under the doctrine of separation of powers. The Lord Chief Justice deputized by a Lord Deputy Chief Justice heads the Judiciary. The superior courts of Uganda are the Supreme Court, Court of Appeal and the High Court. The Constitution Court sits whenever necessary.

The Judiciary is formed by the various courts of judicature, which are independent of the other arms of government. They include the magisterial courts, High Court, Court of Appeal and the Supreme Court. 

The Uganda Judiciary has undergone tremendous changes since the turn of the last century to the present time. In that regard, following the enactment of the 1995 Constitution, the Judiciary structure has been redefined to consist of the following courts: Supreme Court, Court of Appeal or Constitutional Court, High Court, Chief Magistrates Courts, Grade I Magistrate’s Courts, Grade II Magistrate’s Courts, The Local Council Courts, Family and Children Courts and Land.

UGANDA ECONOMIC OUTLOOK

Macroeconomic performance and outlook

The Ugandan economy reported strong growth in 2019, estimated at 6.3%, largely driven by the expansion of services. Services growth averaged 7.6% in 2019, and industrial growth 6.2%, driven by construction and mining. Agriculture grew at just 3.8%. Retail, construction, and telecommunications were key economic drivers. Inflation is expected to remain below 5%, strengthening the domestic economy.

Public Debt of GDP

Government spending continues to increase, underpinned by public infrastructure and capital investments for the nascent oil and gas industry. Expenditures have increased faster than domestic revenues, widening the fiscal deficit in 2019. The deficit is largely financed through external borrowings, supplemented with domestic securities. Despite the rise in the deficit, Uganda is classified at low risk of debt distress. However, debt reached an estimated 43.6% of GDP in 2019, up from 25% in 2012, raising medium-term concerns. Lending remains within IMF limits, but risks have increased due to higher costs of debt servicing and infrastructure investments.

Exports– dependent on primary products, have not kept up with imports, widening the trade deficit to an estimated 9.4% of GDP in 2019 from 8.3% in 2018. The increasing current account deficit has been largely financed by foreign direct investment (2.6% of GDP) and externally financed projects. External reserves were at a comfortable 4.4 months of imports in 2019, while the exchange rate was stable, averaging 3,727 Ugandan shillings per dollar.

The poverty rate fell during the past two decades but rebounded in 2016/17, reaching 21.4%, meaning that 10 million people were living below the national poverty line. Inequality has changed a little. More than two-thirds of the working-age population is in agriculture. Four-fifths of workers are own account workers or contributing family workers, with one-fifth in paid employment or themselves employers. Youth unemployment is a challenge.

Retail, construction, and telecommunications drive the economy, with mining, transport, and hospitality expected to grow as oil and gas investments are made. Price stability will boost domestic business confidence while fiscal policy is likely to remain accommodating.

Urban development with rapid urbanization, rising population density, increasing market size and access, clustering of skills and technology, and proximity to financial institutions offers opportunities for business development, firm creation, and new jobs. Kampala was, until 2019, Uganda’s only urban agglomeration classified as a city. The reclassification of nine municipalities as regional cities can promote new opportunities. The new cities will be phased in over three years, expanding infrastructure such as paved roads, power distribution, water and sanitation services, and waste management.

Poor global growth, affected by the US–China trade tensions and stagnant growth and subdued demand in Europe risks reducing Ugandan exports. Domestically, adverse weather can lower agriculture production, harming the trade balance and current account balance, given the importance to Uganda of exporting food to the East Africa region. Other domestic risks include weak revenue mobilization, weak private sector credit growth, and fiscal expansion in the run-up to the upcoming elections.

Uganda’s economic performance is influenced by developments in the global economic environment. A slowdown in the global economy as a result of Coronavirus will have a negative impact on Uganda’s economy.

Uganda is transitioning to a service economy but faces low productivity and low job creation. The economy has become more productive, but productivity differences across industry, services, and agriculture are large. Industrial productivity is seven to eight times higher than in the other two sectors, but it cannot absorb the 600,000 youths entering the jobs market each year.

AGRICULTURE

Agriculture in Ruhiira MVP UgandaAgriculture in Ruhiira MVP (Uganda)

Agriculture is the backbone of Uganda’s economy, employing 70% of the population, and contributing half of Uganda’s export earnings and a quarter of the country’s gross domestic product (GDP).

The agricultural sector is composed of both the monetary and non-monetary subsectors. Its share in GDP has declined from 64.1 percent in 1985 to 41.0 percent in 2001. The non-monetary subsector of agriculture has been the most affected declining from 39.9 percent of total GDP in 1985 to 22.7 percent in 2000. Nonetheless, the agricultural sector remains the backbone of Uganda’s economy as its main source of livelihood and employment for over 60 percent of the population. It contributes over 70 percent of Uganda’s export earnings and provides the bulk of the raw materials for most of the industries that are predominantly agro-based.

Agricultural output primarily comes from about 3 million smallholder subsistence farmers, who own an average farmland area of 2.5 ha. The agricultural sector is dominated by the production of food crops, but cash crops, livestock, fishery and forestry are also important. Food crops accounted for 72.4 percent of agricultural GDP in 1985, falling to 65.3 percent in 2000.

The main food crop is bananas, which accounted for 28 percent of the total cropped area in 2000, followed by cereals, root crops, pulses and oilseeds with 25 percent, 17 percent, 14 percent and 8 percent of the area, respectively. Despite the dominance of food crop production, only one-third is marketed. Cash crops, livestock, fish and forestry accounted for 4.5 percent, 16.5 percent, 4.0 percent and 2.6 percent of agricultural output in 1985, and 8.9 percent, 6.9 percent, 4.6 percent and 4.3 percent in 2000, respectively. Although Uganda is able to meet its domestic food needs, food products like wheat and rice are imported to cater for the urban population.

Uganda’s exports are dominated by traditional cash crops such as coffee, cotton, tea and tobacco, with coffee being the principal export crop. However, the share of traditional cash crops in total exports has declined from 96.0 percent in 1985 to 38.3 percent in 2001. This fall is mainly attributed to the collapse of world coffee prices and failure to add value to the cash crops as well as the high dependence on a few export commodities. The contribution to export earnings of non-traditional export products that include fish, maize, hides and skins have increased because of trade liberalization and an aggressive export promotion campaign by government.

INDUSTRIAL SECTOR

Kapeeka Industrial Park in UgandaKapeeka Industrial Park in Uganda

The Ugandan economy has experienced sustained growth since the 1990s. Real gross domestic product (GDP) grew at an average of 6.5% annually during 1990–2018, whereas real GDP per capita grew more slowly, at 3.1% per annum, during the same period.

During this period of sustained growth, Uganda experienced some degree of economic transformation. The share of agriculture value added in GDP declined from 53% in 1990 to 24% in 2018. The contribution of industry (including manufacturing, construction and mining) to GDP grew from 10% to 20%, and the contribution of the services sector from 30% to 48%.

The economy still relies on agriculture and the services sector.

The industrial sector is dominated by small-scale firms providing limited value addition. Industrialisation, and especially the manufacturing sector, remains crucial for Uganda. The country has the second-highest (although declining) dependency ratio in the world. Uganda also has one of the world’s highest fertility rates (number of children per woman) and population growth rates, at above 3%. The National Planning Authority (NPA) projects that, if current trends continue, the gap between the working-age population and the employed population will increase from 5 to 22 million people

Food and Beverage

Maize Flour Milling Plant Food and Beverage Solutions in UgandaMaize Flour Milling Plant Food and Beverage Solutions in Uganda

Food and drink is a key sector in Uganda’s economy with agriculture accounting for 21% of the GDP, responsible for about 46% of total export earnings and employing over 65% of the population.

The Ugandan food and drink sector consists of the food sub-sector covering food crops and processed food products and the drink sub-sector covering coffee, tea, cocoa as well as manufactured alcoholic and non-alcoholic drinks.

Food sub-sector

Food Crops

Uganda has the potential to become the bread basket for the Eastern and Central African region given its good climate and abundant arable land. With increasing regional demand, an ever-increasing export market is threatening domestic food prices and reserves. Large scale commercial farming to boost production, irrigation to counter climate change factors and warehousing for long term storage are being promoted to boost the sector.

Processed Food Products

Uganda’s main industries are agro-based. The main processed foods include meat (154MT), fish (41MT), Edible oils and fats (262MT), dairy production (327MT), grain milling (359MT), bakery production (359MT), sugar processing (170MT), animal feed (110MT) and fruit processing. Both government and private sector efforts in processed foods have been directed towards value addition and quality improvement.

Coffee, Cocoa and Tea

Coffee is Uganda’s main export. Year-on-year cumulative coffee exports for the (April 01, 2011 to March 31, 2012) totalled 3.16 m bags worth $474 million comprising of Robusta (2.41 million bags) and Arabica ( 0.75 million bags). Uganda is Africa’s third-biggest tea producer after Kenya and Malawi with tea production increasing by 9.1% in 2011 to 60million kilograms. Whilst cocoa has not been a major crop in Uganda, the government is actively supporting the growth of cocoa with current yields currently at over 10,000 tonnes annually and earning $25million.

Non-alcoholic drinks 

These include carbonated soft drinks, fruit juices and bottled water. The biggest soft drink producers are franchises of big international companies’ coca-cola and Pepsi cola. By 2010, the fruit juice industry in Uganda had grown 300% since 2005. With the influx of supermarkets in Uganda, bottled drinks are becoming increasingly popular with positive forecasts.

Alcoholic drinks

These comprise beer producing companies and spirits producing companies. Uganda is one of the five biggest beer consumers in Africa with per capita consumption of 8 litres per individual per annum

 

Forestry

ForestryForestry

Today, forest and woodland-cover in Uganda stands at 49,000 km² or 24% of the total land area. Of these 9,242.08 km² is tropical rainforest, 350.60 km² are forest plantations and 39,741.02 km² is woodland. 30% of these areas are protected as national parks, wildlife reserves or central forest reserves. Economic crises often hamper efforts to conserve natural resources.

To revive forestry, the government abolished the Forest Department and established the National Forestry Authority (Uganda)(NFA) in 2004. This action aimed to increase revenue and quality of forest management

Electricity

As of April 2019, generation capacity was 1,167 megawatts, with peak demand of about 625 megawatts and approximately 25 percent national electrification rate. At that time, an estimated 1,000 new customers were requesting grid power connection on a daily basis, with over 1.3 million existing Umeme connections. As of October 2019, the Uganda Ministry of Energy and Mineral Development estimated that 28 percent of Uganda's population had access to electricity. In September 2019, Uganda signed an Inter-Governmental Agreement (IGA) with Russia to build capacity to exploit nuclear technology for energy, medical and other peaceful purposes

Mining

Mining in Uganda

Mining in Uganda

Uganda occupies a strategic position in East Africa, which gives it the advantage for the eventual development of exports of mineral products of Sudan, the Democratic Republic of Congo, Rwanda, and Burundi, Kenya and Tanzania and the COMESA region as a whole.

Mineral resources have been identified and are already being informally mined in the different parts of the country areas; there are several mineral potential formations most especially gold in the Karamoja region and other areas, copper in Kasese, extensive marble formations in Eastern part of the country (Moroto), phosphates in Tororo and huge deposits of iron ore in central Uganda. New iron smelting factories are being set up and the government’s negotiation for iron ore mining is underway.

FINANCIAL SECTOR

Bank of Uganda

Bank of Uganda

Uganda’s financial system is composed of formal, semiformal, and informal institutions.  The formal institutions include Banks, Microfinance Deposit-taking institutions, Credit Institutions, Insurance companies, Development Banks, Pension Funds, and Capital Markets. The semi-formal institutions include Savings and Credit Cooperative Associations (SACCO) and other Microfinance institutions, whereas the informal ones are mostly village savings and loans associations. Formal institutions are less prominent in rural areas than urban areas and they only serve 14% of the rural population. Informal institutions play an important role in the rural service provisions and serve approximately 12% of the rural population.

TOURISM

Tourism in Uganda

Tourism in Uganda

Tourism in Uganda is focused on Uganda's landscape and wildlife. It is a major driver of employment, investment, and foreign exchange, contributing 4.9 trillion Ugandan shillings (US$1.88 billion or €1.4 billion as of August 2013) to Uganda's GDP in the financial year 2012-13.

Presently, the Ministry of Tourism, Wildlife and Heritage, and the Uganda Tourism Board maintain information along with statistics about tourism for the country. There has been increased investment in tourism, particularly in travel accommodation and related facilities; this has enhanced tourists' experience in the country.

Uganda has a very diverse culture, landscape, flora, and fauna.

Game and bird viewing

Game viewing is the most popular tourist activity in Uganda. Wild animals like lions, buffaloes, giraffes, antelopes, elephants are common in Uganda’s ten national parks. Uganda is one of only ten countries where it is possible to visit endangered gorillas.

Mountain gorillas are Uganda's prime tourist attraction. The vast majority of these are in Bwindi Impenetrable National Park, with a few others in Mgahinga National Park, both in southwestern Uganda.

Bwindi Impenetrable National Park

Bwindi Impenetrable National Park

Boating and Water Sports

With its prime location in the African Great Lakes region, Uganda has a variety of water bodies that are popular spots for tourism. White water rafting and kayaking are popular activities on the rapids near the source of the Nile at Jinja.

Boating which is commonly done on Lake Victoria, Lake Mburo, Lake Bunyonyi, Kazinga Channel, and River Nile is a perfect way of exploring the buffaloes, hippos, crocodiles and a wide variety of bird species that inhabit the banks of these water bodies. Sport fishing is another favorite tourist activity. Fish like the Nile perch, and tilapia can be caught in designated areas of Lake Mburo and the banks of the Nile. Canoeing can also be done at Lake Bunyonyi.

Lake Victoria Kayak Expedition

Lake Victoria Kayak Expedition

Hiking and Mountain Climbing

Uganda has many opportunities for mountain climbing, hiking and nature walks. The Rwenzori Mountains, which are found at the border with the DRC, include the snowcapped Margherita Peak (5109 m), the highest Mountain Range in Africa and also one of the highest peaks. Mgahinga Gorilla National Park also includes three peaks, Mount Gahinga, Mount Sabyinyo, and Mount Muhavura, the highest peak in the national park. Mount Elgon, located in Eastern Uganda, can be used for hiking and climbing, and also has one of the largest calderas in the world.

Volcano hiking in Mgahinga

Volcano hiking in Mgahinga

 

Religious Tourism

Religious tourism is a steadily growing tourism product niche in Uganda after wildlife-based tourism. However, limited research has curtailed planning and development of religious tourism in the country.

CULTURE

Culture of Uganda

Culture of Ugandan people

The culture of Uganda is made up of a diverse range of ethnic groups. Lake Kyoga forms the northern boundary for the Bantu-speaking people, who dominate much of East, Central, and Southern Africa. In Uganda, they include the Baganda and several other tribes

In the north, the Lango and the Acholi peoples predominate, who speak Nilotic languages. To the east are the Iteso and Karamojong, who speak a Nilotic language, whereas the Gishu are part of the Bantu and live mainly on the slopes of Mt. Elgon. They speak Lumasaba, which is closely related to the Luhya of Kenya. A few Pygmies live isolated in the rainforests of western Uganda.

Christians make up 85.2 percent of Uganda's population. There were sizeable numbers of Sikhs and Hindus in the country until Asians were expelled in 1972 by Idi Amin, following an alleged dream, although many are now returning following an invitation from President Yoweri Museveni. Muslims make up 12 percent of Uganda's population.

SPORTS

Football is the national sport in Uganda. The Uganda national football team, nicknamed "The Cranes" is controlled by the Federation of Uganda Football Associations. They have never qualified for the FIFA World Cup finals. Their best finish in the African Cup of Nations was second in 1978.

At multi-sport events, Uganda has enjoyed most of its success in athletics and boxing.

 

REPUBLIC OF MALAWI

REPUBLIC OF MALAWI

Malawi, also known as “The Warm Heart of Africa" because of the friendliness of its people, was once known as Nyasaland. This southeast African country is now officially known as the Republic of Malawi. The name Malawi originated from the Maravi; an old name of the Nyanja people that first inhabited the area. The people then settled by migrating to Bantu which was colonized by the British. In 1964, the protectorate over Nyasaland ended their operations and Nyasaland became an independent country under Queen Elizabeth II, with the new name Malawi. The country became a republic after two years of attaining its independence with a totalitarian one-party state under the leadership of Hastings, Banda who presided until 1994. The country now remains a democratic multi-party state under Peter Mutharika’s leadership.

Map of Malawi

 As of July 2016, Malawi had an estimated population of 18,091,575 with Malawian as the official name for its citizens. There is a diverse population made up of native people, Asians, and Europeans, with several languages spoken and a variety of religious beliefs. The landlocked country is neighbored by Zambia to the northwest, Tanzania to the northeast, and Mozambique on the east, south, and west. The country spans over 118,484 km2 (45,747 sq mi) with Lake Malawi taking up about a third of the nation’s land. Lilongwe is the nation’s capital, and is also Malawi's largest city; the second largest is Blantyre, the third-largest in Mzuzu and the fourth largest is its old capital Zomba. Malawi has a pro-western foreign policy and has positive diplomatic relations and participation in several international organizations, including the United Nations, the Commonwealth of Nations, the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA), and the African Union (AU), yet Malawi is among the world's least-developed countries with low life expectancy, high infant mortality and a high prevalence of HIV/AIDS.

  

Governance

Malawi’s current constitution was effected on the 18th of May, 1995 with a democratic, multi-party government and currently has the leadership of Dr. Peter Mutharika as the President. Malawi’s government consists of the executive, legislative and judicial branches. Malawi is divided into four regions (the Northern, Central, Southern and Eastern regions), which are further divided into 28 districts, and approximately 250 traditional authorities and 110 administrative wards. Local government is administered by the central government-appointed regional administrators and district commissioners.

Dr. Peter Mutharika

The Executive branch

The Executive branch of Malawi is made up of a President who is both Head of State and Head of government, first and second vice presidents and a cabinet. The President, with his Vice is elected into office every five years while the second vice president and the cabinet are appointed by the president. In the case of the second vice, they must be from a different party and for the members of the cabinet, they can be drawn from within or outside the legislature. 

 

Legislative branch

Malawi’s National assembly is the supreme legislative body of the nation, although the Malawian constitution provides for a Senate of 80 seats, Parliament repealed it and one does not exist in practice. The legislative branch consists of a Unicameral National Assembly of 193 members who are elected every five years. The National Assembly situated in Lilongwe possesses legislative supremacy and thereby, ultimate power over all other political bodies in Malawi with the Speaker of the House as the head. 

Judiciary

Malawi’s judicial branch interprets and applies the laws of the land to ensure equal justice under law, and to provide a mechanism for dispute resolution. The judicial branch is modelled after the English model and with the Supreme Court of Appeal as the highest; The Supreme Court of Appeal has jurisdiction only in appeals from lower courts. It is composed of the Chief Justice and nine other Justices, followed by the High Court which is divided into three sections (general, constitutional and commercial): The High Court of Malawi has unlimited original jurisdiction to hear and determine any civil or criminal proceedings. It has a General Division which also hears appeals from subordinate courts, and a Commercial Division that deals with commercial or business-related cases. About one-third of Most High Court cases are brought before a single judge, without a jury, but cases on constitutional matters must be heard by three judges. The Industrial Relations Court has jurisdiction over employment issues. The Subordinate Courts include an Industrial Relations Court and Magistrates Courts. The Industrial Relations Court presides over employment cases before it is heard informally, and with some restrictions on legal representation, by a panel consisting of a chairperson and one representative each of employers and employees. While others include magistrates' courts and local or traditional courts. These have defined criminal and civil jurisdiction depending on their level, but expressly excluding cases of treason, murder or manslaughter.


ECONOMY

Real Growth in GDP 2009 2018

Landlocked Malawi ranks among the world's least developed countries. The country’s economic performance has historically been constrained by policy inconsistency, macroeconomic instability, poor infrastructure, rampant corruption, high population growth, and poor health and education outcomes that limit labor productivity. The economy is predominately agricultural with about 80% of the population living in rural areas. Agriculture accounts for about one-third of GDP and 80% of export revenues. The performance of the tobacco sector is key to short-term growth as tobacco accounts for more than half of exports, although Malawi is looking to diversify away from tobacco to other cash crops.

The economy depends on substantial inflows of economic assistance from the IMF, the World Bank, and individual donor nations. Donors halted direct budget support from 2013 to 2016 because of concerns about corruption and fiscal carelessness, but the World Bank resumed budget support in May 2017.

In 2006, the country qualified for debt relief under the IMF/World Bank Heavily Indebted Poor Countries Initiative – Malawi has one of the lowest per capita incomes in the Commonwealth.

These reforms led to a gradual recovery, with better agricultural performance, higher commodity prices (notably for tea) and increased export earnings. However, during 2000, with a poor maize harvest, weaker tobacco prices and the growing burden on the economy of the loss of skilled workers and health care costs of HIV/AIDS, growth slowed and then in 2001 the economy shrank by more than four per cent. It recovered in 2002 in a climate of persisting drought and generally maintained good rates of growth, becoming strong during 2006–09. Then, following the world economic downturn of 2008–09, there was a brief pause, before growth of at least five per cent p.a. resumed in 2013–15. Keeping inflation under control, however, proved more challenging; it was 27.3 per cent in 2013 and an estimated 19.6 per cent in 2014.

Heavily dependent on rain-fed agriculture, with corn being the staple crop, Malawi’s economy was hit hard by the El Nino-driven drought in 2015 and 2016, and now faces threat from the fall armyworm. The drought also slowed economic activity, led to two consecutive years of declining economic growth, and contributed to high inflation rates. Recent increases in domestic borrowing mean that debt servicing in 2016 exceeded the levels prior to HIPC debt relief. Depressed food prices over 2017 led to a significant drop in inflation (from an average of 21.7% in 2016 to 12.3% in 2017), with a similar drop in interest rates.

GDP by Sector 2015

AGRICULTURE

Agriculture is the backbone of Malawi’s economy, directly accounting for about one-third of the nation’s GDP. Agriculture significantly contributes to employment, economic growth, export earnings, poverty reduction, food security, and nutrition. This sector competes most successfully in international markets. The main economic produces of Malawi are tobacco, tea, cotton, groundnuts, sugar, and coffee. While maize has been the major food crop in terms of the policy agenda and hectarage planted, tobacco has been the dominant cash crop in the economy accounting for approximately 58% of the country’s total export earnings with a production in 2011 of 175,000 tonnes over the last century. Tea and sugar are other important cash crops accounting for 8 percent and 7 percent of export earnings, respectively. Dried legumes, nuts and groundnuts have increased in relative importance while cotton has decreased. Livestock production, which contributes about one-fifth of the value of total agricultural production, consists mainly of subsistence grazing of sheep, cattle, goats, poultry, and pigs. Other agricultural products include cassava, sweet potatoes, sorghum, bananas, rice, and Irish potatoes. Malawi’s agriculture sector is composed of two main sub sectors: small-scale farmers and estates. Despite lacking resources, smallholder farmers produce about 80 percent of Malawi’s food and 20 percent of its agricultural exports. The estate subsector is the nation’s principal foreign exchange earner. While it contributes only about 20 percent to the total national agricultural production, it provides over 80 percent of agricultural exports mainly from tobacco, sugar, tea and, to a lesser extent, tung oil, coffee, and macadamia. The estate sub sector operates on leasehold or freehold land. Lake Malawi and Lake Chilwa provide fish for the region.

 Tobacco Farming in Malawi

INDUSTRY

Malawi's manufacturing sector contributed 10.7% of GDP in 2013. The main industries are food processing, construction, consumer goods, cement, fertilizer, ginning, furniture production, and cigarette production. The Ministry of Industry, Trade and Tourism’s spokesperson, Mayeso Msokera has largely attributed the slow industrial growth to insufficient and intermittent power supply the country has experienced in recent years.

Food and beverages: Most fruits and vegetables are exported raw, while processed food is imported mainly from South Africa.  Companies like Carlsberg and Universal Industries are into brewery and sweets, crisps, biscuits, milk powder, soy products, and baby food respectively. Coffee and tea are processed by half a dozen different companies in the regions of Thyolo, Mulanje and around Mzuzu. 

Pharmaceutical companies: Pharmanova Ltd., which is the biggest pharmaceutical manufacturer in Malawi, followed by SADM, Malawi Pharmacies (Pharmaceuticals Limited) and Kentam Product Limited are the four pharmaceutical companies in Malawi. They manufacture a limited range of drugs, particularly those that are in great demand on the local market.  

Forestry: Timber production for building materials and furniture is an important industry. However, most areas in Malawi suffer from deforestation due to illegal logging for charcoal production and the use of firewood

Electricity: Electricity Supply Commission of Malawi (ESCOM) is Malawi's sole power supplier and is state-owned. It generates almost all its power from hydroelectric plants along the Shire River. The installed is approximately 351MW. About 12% of the country's population has access to electricity, according to 2014 World Bank figures. 

Mining

The mining sector in Malawi accounts for about 1% of the country’s GDP. In 2017, growth in the mining and quarrying sector was estimated at 1.6%. Growth in 2018 was projected at 2.3%. Mining remains small-scale, and Malawi has no precious metals or oil, but ruby mining began in the mid-1990s, with Malawi the only source of rubies in Africa. The value of mining is dominated by the extraction of fuel minerals, particularly uranium. Malawi's production of uranium has contributed 1% to the global production of this mineral. Malawi has several minerals with economic potentials, such as Phosphates (apatite), Bauxite, Kaolinitic, Coal, Kyanite, Limestones, Rare Earths (including Strontianite and Monazite), Graphite, Sulphides (Pyrite and Pyrrhotite), Titanium minerals along the Lakeshore, and Vermiculite. Artisanal and Small Scale Mining (ASM) in Malawi is generally carried out through labor-intensive methods for limestone for lime production, clay for pottery, and gemstones. Small scale mining is facilitated by Mineral Permits, Mining Claim Licences, and Reserved Mineral Licences. It is estimated that with increased emphasis on mineral extraction, the sector's contribution to GDP could be 20% by 2023.

Manufacturing

Mapeto DWSM Ltdjpg

Major products in the manufacturing industry include: textiles, footwear and clothing, agro-processing (tobacco, tea, sugar, soya, macadamia nuts) and building materials (cement, joinery).  In recent years the production of tobacco in Malawi has decreased significantly. Some major players in the manufacturing sector are Mapeto (DWSM) Ltd., the largest textile manufacturer in Malawi, Mapeto (DWSM) manufacture large quantities of yarn from the initial spinning process right through to printing and dying. They are one of the country’s largest importers and employ over 1000 workers. Malawi has over the past 30 years failed to make headway in the manufacturing sector, leaving analysts wondering whether the promotion of import substitution, industrialization and agricultural exports is yielding results. World Bank analysis suggests that the market for manufacturing is limited partly due to Malawi’s relatively small domestic market; while the shortage of skilled workers, low productivity and high transport costs in Malawi limit the capacity for the exportation of manufactured goods.

SERVICES

Malawi’s service sector accounts for 51.7% of the national GDP. Notable industries are tourism, retail, transport, education, health services, telecommunication, and the banking sector. The Government of Malawi holds shares in many important companies, such as Malawian Airlines and Press Corporation Limited.

FINANCIAL SECTOR

Malawi's financial sector is small even by regional standards and is dominated by banks but with a variety of institutions and markets. The Malawian financial system consists of nine banks, two discount houses, one leasing company, eight insurance companies, four development finance institutions (DFIs), a young but growing microfinance industry, and a nascent capital market. Only 10% of Malawi's population has access to formal financial services, reflecting the high incidence of poverty, high degree of informality, and a high proportion of the population in rural areas. Malawi's financial system offers a variety of conventional financial services, concentrated on the short-term end of the yield curve, but with an increasing focus on down-market products. Significant ownership linkages within the financial system and with non-financial corporations pose challenges for governance and related party transactions.

Banking

Image: Reserve Bank of Malawi

Malawi has a small banking system, which has a low but increasing level of financial intermediation. The banking system is concentrated and largely privately owned. Generally, Malawi has a sound banking sector, overseen and regulated by the Reserve Bank of Malawi, The Central Bank of Malawi.  There are ten full-service commercial banks.  The two largest banks-- National Bank of Malawi Standard Bank, First Merchant Bank, and Indebank -- collectively command 51% of all banking deposits. 

 

TRANSPORTATION SECTOR

Malawi’s transportation is poorly developed. The country of almost 14 million has 39 airports, with only 6 with paved runways and 33 with unpaved runways. It has 495 miles (797 km) of railways, all narrow-gauge and about 45 percent of its roads are paved. Malawi also has 435 miles (700 km) of waterways on Lake Malawi and along the Shire River.

Highways: Recent assessment has indicated that there are 9,601 miles (15,451 km) of roads in the country; of these, 4,322 miles (6,956 km) (45 percent) are paved. The remaining 5,279 miles (8,496 km) are not paved.

Ports, harbors and waterways: The major waterways are Lake Nyasa or Lake Malawi and the Shire River. There is a railhead at the port of Chipoka, Salima district in Central Malawi. There is also the existence of smaller ports at Monkey Bay, Nkhata Bay, Nkhotakota and Chilumba.

The MV Ilala connects Likoma Island with the mainland, as well as the Malawian and Mozambican sides of the lake. 

Air transport: The national airline of Malawi, Malawian Airlines Limited operates regional passenger service in Lilongwe and is 51% owned by the Malawi government as Ethiopian Airlines controls the remaining 49%. The airline's main base of operations is Lilongwe International Airport, with a secondary hub at Chileka International Airport

Image: Lilongwe International Airport

Rail transport: The government owned Malawi Railways is the national rail network in Malawi but since 1 December 1999 the Central East African Railways, a consortium led by Railroad Development Corporation, won the right to operate the network. This was the first rail privatization in Africa which did not involve a parastatal operator. The rail network totaled 797 kilometers in 2001. It is a narrow gauge line with a 1,067 mm (3ft. 6in) track.

 

TELECOMMUNICATIONS

The overall telephone system is described as rudimentary. In the past, Malawi's telecommunications system was named as one of the poorest in Africa, but conditions are improving. Telephones are much more accessible in urban areas, with less than a quarter of land lines being in rural areas.

Telephone: Mobile telephones are much more common than fixed line phones in Malawi, with over 6.1 million mobile subscriptions compared with only 45,678 fixed line subscriptions as of 2015.

The International Telecommunications Union report showed that the average Malawians spend on mobile phones was over 56% of the average monthly earning there. This was the highest proportion of earnings revealed by the survey. There are the domestic telecommunication systems consisting of fair system of open-wire lines, microwave radio relay links, and radiotelephone communications stations and the international also made up of satellite earth stations - 2 Intelsat, 1 Indian Ocean and 1 Atlantic Ocean.

Radio and television: The Malawi Communications Regulatory Authority (MACRA) regulates Radio and television broadcast services in Malawi. 

There are 31 are operational radio broadcast stations, but 45 licensed. There are also 20 licensed television broadcast stations, of which only 5 or 7 are operational.

Internet: By late 2018, 1.8 million Malawians were online, around 9% of the population. There were 540,000 active social media users by January 2019 with Facebook as the leading platform. The internet in Malawi is also regulated by the Malawi Communications Regulatory Authority (MACRA). Business to consumer Internet service providers include Airtel, and Malawi Postal Service.

TOURISM

Image: Kasungu National Park

Malawi is famously known for its most welcoming, warm and friendly people, hence the Warm Heart of Africa and it has considerable potential for tourism. Some main tourist sites are Lake Malawi: Lake Malawi spans from the Northern region of the country through the Southern region with its northern part being the deepest. Mountains such as Zomba Plateau and Mulanje Mountain, not forgetting the country's national parks like Nyika National Park, Kasungu National Park, and Liwonde National Park and Lake Malawi National Park. There also are the rock paintings at Chongoni. Aside these, there are many beautiful beaches along the shores of Lake Malawi like Kande Beach and Chintheche Inn in Nkhata Bay.

 

CULTURE

Chewa is the most widely spoken language in Malawi used by 60 percent of the population, which originated among the Bantu tribes of South Africa. 5 percent of the people speak Yao, and 30 percent speak Arabic with English as the official language of government, industry, commerce and in schools.

Chickens, goats, and an occasional pig are used to supplement the standard dish of boiled cornmeal called nsima. Nsima is eaten twice a day, usually at lunch and dinner, and is preferred by most people. Fruits that abounds in Malawi includes mangoes, melons, oranges, bananas, and pineapples. Vegetables are cultivated but are not popular.

Soft drinks are quite dominant, especially Coca-Cola. Alcoholic beverages are mainly beer, a homemade brew called chibuku, that is usually produced by women and served in cut-off milk cartons, and a more potent distilled liquor. Most Malawian ceremonies involve the consumption of alcoholic beverages.

Verbal greetings are accompanied by a handshake. This is done with the right hand, with the left hand gripping the right forearm to show that one is not armed. Though residents are gregarious, they respect other people's privacy in a crowded country where private space is at a premium. While approaching someone's house one would often cry Odi, Odi to announce his or her presence. Eating usually is done without utensils, but only with the right hand, because the left hand is considered "dirty."

55 percent of the people belong to the Church of England but there are also Methodists, Baptists and Seventh Day Adventists. 20 percent of the population are Muslim, and 20 percent are Catholic. There is a small Hindu presence.

Death is a constant presence in Malawi because of the short life expectancy, the growing incidence of AIDS and other diseases, and the high infant mortality rate. Employers give workers time off for funerals, and funerals and mourning can last several days.

Malawi has a National Dance Troupe which is partially subsidized by the government and receives the only governmental financial support to the arts in the country. 

Image: Gule Wamkulu -The Masked Malawi Traditional Dance

There is a long tradition of oral artistry. Before the spread of literacy in the twentieth century, texts were preserved in memory and performed or recited. Those traditional texts provided entertainment, instruction, and commemoration. However, no distinctions were made between works composed for enjoyment and works with a more utilitarian function. Those works were primarily myths, legends, and folktales.

 

SPORTS

Malawi’s most common sport is football. Its national team is yet to qualify for a World Cup but have made two appearances in the Africa Cup of Nations. Basketball is also growing in popularity, but its national team is yet to participate in any international competition.

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