Malawi A small country facing big challenges

Malawi is seen as a peaceful country that is largely stable politically. However, the challenges for this landlocked country in south-east Africa are huge. They include a high rate of poverty, widespread malnutrition, low levels of education, poor health services and high population growth.

In the south of Malawi, small sums are paid out to extremely poor people as part of a social cash transfer programme. — Straight to

Health-related, climate-related and geopolitical shocks are holding back the country's economic and social development. The COVID-19 pandemic and more recently a Cholera epidemic that lasted several months have resulted in loss of jobs, hunger and additional burdens on the health system which was already weak.

Russia’s war of aggression against Ukraine has driven up world market prices. This is being felt in Malawi in the form of high inflation and increased prices for food, fertiliser and fuel. And it is having adverse effects on people’s supply situation. In addition, Malawi is suffering from the consequences of climate change, with extreme weather events and abnormal weather conditions becoming more and more frequent. Several hurricanes have recently devastated vast areas of land, destroying the livelihoods of thousands of people. The country’s development was thrown back by years.

In sum, this has led to Malawi experiencing what is probably its biggest economic crisis since gaining independence in 1964. The country is highly indebted and because of a lack of foreign currency it is no longer even able to import enough vital goods like fuel or medicines. The agricultural sector lacks seeds and fertiliser. According to the World Food Programme (WFP), more than a quarter of the population is affected by chronic food insecurity.

Malawi counts as a least developed country (LDC). On the current United Nations Human Development Index (HDI), Malawi is ranked 172nd out of 193 states.

German development cooperation with Malawi

Bärbel Kofler, Parliamentary State Secretary to the Federal Minister for Economic Cooperation and Development

The German government supports the Malawian government in its efforts to implement its development strategy Vision Malawi 2063. Its goal is for Malawi to achieve the status of a middle-income country (by the World Bank definition) in the long term. The topmost goals of development cooperation are reducing poverty and increasing resilience towards negative impacts like climate change, epidemics and economic shocks.

At the government negotiations in December 2023, development cooperation was agreed for the next two years. Germany committed 70 million euros in new funding to Malawi. In addition, the partner country is receiving funding of up to 12 million euros via the Special Initiative “Transformation of Agricultural and Food Systems”.

Cooperation with Malawi focuses on the following core areas:

Peaceful and inclusive societies
Area of intervention: Good governance
Transformation of agricultural and food systems
Area of intervention: Food and nutrition security
Sustainable economic development, training and employment
Area of intervention: Private sector and financial sector development
Health, social protection and population policy
Areas of intervention: Social protection, population policy; sexual and reproductive health and rights

Projects in the former priority area of basic education are currently being concluded. Under the framework of the German BACKUP Initiative – Education in Africa (External link), the BMZ is supporting Malawi in implementing digital solutions to expand and improve education and thereby also mitigate the impacts of the COVID-19 pandemic on the education sector.

In addition, Malawi is benefiting from other supranational projects in areas such as renewable energy, nature conservation/biodiversity, microfinance and vocational training.

Good financial governance is a prerequisite for successfully reducing poverty, for economic growth and for sustainable development. The BMZ is supporting the Malawian government with regard to reforming financial management, strengthening supervisory mechanisms and putting public funds to better use with a view to reducing poverty.

A woman farmer in Malawi in front of a solar system that provides electricity for the pump of a drip irrigation system

Under the framework of the Special Initiative “Transformation of agricultural and food systems”, the Federal Ministry for Economic Cooperation and Development (BMZ) is contributing to improve the food situation in Malawi. The focus is on providing food for pregnant women, mothers and small children.

A female farmer training with a hand tractor: At the Malawi University of Agriculture and Natural Sciences, farmers can rent tractors for days at low prices.

In Malawi, most people live on the agricultural produce that they grow themselves. Germany is supporting its partner country Malawi in promoting the economic development of rural areas, increasing productivity and value creation in the agricultural sector, and exporting more agricultural produce.

A mother has her child examined by a doctor

In recent years, Malawi has succeeded in reducing its child and maternal mortality rates and the incidence of HIV infections. However, there are still serious deficits in the country’s healthcare system. The BMZ wants to support Malawi in its efforts to set up a country-wide healthcare system which provides good and affordable health services, in particular for mothers and for newborn babies.