Malawi 

Malawi country policy

Policy established 14 July 2010

• The country ceiling is 80 mln euro
• Early warning signal 30 mln euro
• Public buyers: ORIO facility
• Private buyers: SIF facility, FX generating buyers only

Country class: 7

Restrictions

• Special conditions, consult your accountmanager

Malawi country facts

Atradius Dutch State Business Economic Research
Country Report last updated :  June 9, 2010
Country :  MALAWI  

Political Situation

Stable

Head of state
President Bingu wa Mutharika (since 2004, Democratic Progressive Party, DPP.

Form of government
The government is led by the DPP, a break-away party of the United Democratic Front (UDF). 
 
Managed dispute with Tanzania about the border in Lake Nyasa.
Member of UN, IBRD, IMF, AU, SADC, COMESA, Commonwealth.

Internal Economic Situation
Very Poor But High Growth

General situation
Malawi is an overpopulated and landlocked country largely relying on subsistence agriculture. Except for some limited uranium reserves the country has little resources and not much potential for tourism. 
The tobacco sector will continue to be the pillar under the economy, however harvests are dependant on weather conditions since irrigation is virtually non-existent.  Prospects for tobacco are uncertain in the LT, due to oversupply and changed attitudes to smoking in Western countries. The opening of the Kayelekera uranium mine this year will boost the economy the coming decade. Uranium export will help to reduce the large current account deficits. 

External Economic Situation
Bad Liquidity, Acceptable Solvency

Main sources of foreign exchange
Donor support, tobacco (60% of exports), tea (10%), textiles (10%) and coffee.

Main foreign markets
South Africa (11%), EU (31%, Germany 7%, Netherlands 7%), Japan (5%) and US (18%).

Main expenses of foreign exchange
Capital goods (60% of imports), fuel and energy (15%).

Balance of payments
Exports very dependant on tobacco; Donor inflows are crucial to finance current account deficits.