Malawi

MALAWI

LOCATION, SIZE, AND EXTENT
TOPOGRAPHY
CLIMATE
FLORA AND FAUNA
ENVIRONMENT
POPULATION
MIGRATION
ETHNIC GROUPS
LANGUAGES
RELIGIONS
TRANSPORTATION
HISTORY
GOVERNMENT
POLITICAL PARTIES
LOCAL GOVERNMENT
JUDICIAL SYSTEM
ARMED FORCES
INTERNATIONAL COOPERATION
ECONOMY
INCOME
LABOR
AGRICULTURE
ANIMAL HUSBANDRY
FISHING
FORESTRY
MINING
ENERGY AND POWER
INDUSTRY
SCIENCE AND TECHNOLOGY
DOMESTIC TRADE
FOREIGN TRADE
BALANCE OF PAYMENTS
BANKING AND SECURITIES
INSURANCE
PUBLIC FINANCE
TAXATION
CUSTOMS AND DUTIES
FOREIGN INVESTMENT
ECONOMIC DEVELOPMENT
SOCIAL DEVELOPMENT
HEALTH
HOUSING
EDUCATION
LIBRARIES AND MUSEUMS
MEDIA
ORGANIZATIONS
TOURISM, TRAVEL, AND RECREATION
FAMOUS MALAWIANS
DEPENDENCIES
BIBLIOGRAPHY

Republic of Malawi

CAPITAL: Lilongwe

FLAG: The national flag is a horizontal tricolor of black, red, and green, with a red rising sun in the center of the black stripe.

ANTHEM: Begins "O God, Bless Our Land of Malawi."

MONETARY UNIT: The kwacha (k) of 100 tambala (t) is the national currency; it replaced the Malawi pound (m£) on 28 August 1970 and was linked with the pound sterling until November 1973. There are coins of 1, 2, 5, 10, and 20 tambala, and notes of 50 tambala and 1, 5, 10, 20, and 50 kwacha. k1 = $0.00832 (or $1 = k120.21) as of 2005.

WEIGHTS AND MEASURES: The metric system is the legal standard.

HOLIDAYS: New Year's Day, 1 January; Martyrs' Day, 3 March; Kamuzu Day, 14 May; Republic or National Day, 6 July; Mothers' Day, 17 October; National Tree Planting Day, 21 December; Christmas, 25 December; Boxing Day, 26 December. Movable holidays include Good Friday and Easter Monday.

TIME: 2 pm = noon GMT.

LOCATION, SIZE, AND EXTENT

A landlocked country in southeastern Africa, Malawi (formerly Nyasaland) has an area of 118,480 sq km (45,745 sq mi), of which 24,400 sq km (9,420 sq mi) consists of water, chiefly Lake Malawi (also known as Lake Niassa). Comparatively, the area occupied by Malawi is slightly smaller than the state of Pennsylvania. Malawi extends 853 km (530 mi) n–s and 257 km (160 mi) e–w. It is bounded on the n and e by Tanzania, on the e, s, and sw by Mozambique, and on the w by Zambia, with a total boundary length of 2,881 km (1,790 mi).

Malawi's capital city, Lilongwe, is located in the central part of the country.

TOPOGRAPHY

Topographically, Malawi lies within the Great Rift Valley system. Lake Malawi, a body of water some 580 km (360 mi) long and about 460 m (1,500 ft) above sea level, is the country's most prominent physical feature. About 75% of the land surface is plateau between 750 m and 1,350 m (2,460 and 4,430 ft) above sea level. Highland elevations rise to over 2,440 m (8,000 ft) in the Nyika Plateau in the north and at Mt. Sapitwa (3,000 m/9,843 ft). The lowest point is on the southern border, where the Shire River approaches its confluence with the Zambezi at 37 m (121 ft) above sea level.

CLIMATE

Variations in altitude in Malawi lead to wide differences in climate. The vast water surface of Lake Malawi has a cooling effect, but because of the low elevation, the margins of the lake have long hot seasons and high humidity, with a mean annual temperature of 24°c (75°f). Precipitation is heaviest along the northern coast of Lake Malawi, where the average is more than 163 cm (64 in) per year; about 70% of the country averages about 75–100 cm (30–40 in) annually.

In general, the seasons may be divided into the cool (May to mid-August); the hot (mid-August to November); the rainy (November to April), with rains continuing longer in the northern and eastern mountains; and the post-rainy (April to May), with temperatures falling in May. Lilongwe, in central Malawi, at an elevation of 1,041 m (3,415 ft), has a moderately warm climate with adequate rainfall. The average daily minimum and maximum temperatures in November, the hottest month, are 17°c (63°f) and 29°c (84°f), respectively; those in July, the coolest month, are 7°c (45°f) and 23°c (73°f).

FLORA AND FAUNA

About 27% of the land area is forested. Grassland, thicket, and scrub are found throughout the country. There are indigenous softwoods in the better-watered areas, with bamboo and cedars on Mt. Sapitwa; evergreen conifers also grow in the highlands. Mopane, baobab, acacia, and mahogany trees are found at lower elevations. There are over 3,700 species of plants found throughout the country.

There are many varieties of animal life. The elephant, giraffe, and buffalo are found in certain areas; hippopotamuses dwell on the shores of Lake Malawi. The kudu, duiker, bushbuck, tsessebe, wildebeest, and hartebeest are among the antelopes to be found. Other mammals in Malawi are the baboon, monkey, hyena, wolf, zebra, lion, nocturnal cat, badger, warthog, and porcupine. In 2000, there were about 195 species of mammals.

There are at least 219 species of birds. Reptiles are plentiful and include freshwater turtle, crocodile, tortoise, marsh terrapin, chameleon, lizard, and many varieties of snakes; the Egyptian cobra has been found in the Shire Valley. Fish abound in the lakes and rivers; species include bream, bass, catfish, mudfish, perch, carp, and trout. The mbuna is a tropical fish protected within the waters of the Lake Malawi National Park. Malawi is rich in insect life and has species in common with tropical West Africa and Tanzania.

ENVIRONMENT

Almost all fertile land is already under cultivation, and continued population pressure raises the threat of soil erosion and exhaustion, as well as infringement on forest resources for agricultural purposes. The demand for firewood has significantly depleted the timber stock. Malawi has about 16 cu km of renewable water resources. About of 96% city dwellers and 62% of the rural population have access to pure water.

The preservation of Malawi's wildlife is a significant environmental issue. As of 2003, 11.2% of the country's natural areas were protected, including Lake Malawi National Park, which is a natural UNESCO World Heritage Site, and Lake Chilwa, which is a Ramsar wetland site. Some of the nation's fish population is threatened with extinction due to pollution from sewage, industrial waste, and agricultural chemicals and siltation of spawning grounds. According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), the number of threatened species included 7 types of mammals, 13 species of birds, 5 species of amphibians, 9 types of mollusks, 2 species of other invertebrates, and 14 species of plants. Threatened species included the African elephant, cheetah, and African wild dog.

POPULATION

The population of Malawi in 2005 was estimated by the United Nations (UN) at 12,341,000, which placed it at number 70 in population among the 193 nations of the world. In 2005, approximately 3% of the population was over 65 years of age, with another 46% of the population under 15 years of age. There were 99 males for every 100 females in the country. According to the UN, the annual population rate of change for 2005–2010 was expected to be 3.2%, a rate the government viewed as too high. The projected population for the year 2025 was 23,750,000.

The overall population density was 104 per sq km (270 per sq mi), which is one of the highest in Africa. The Southern Region has about 50% of the population, the Central Region about 40%, and the Northern Region about 10%.

The UN estimated that 14% of the population lived in urban areas in 2005, and that urban areas were growing at an annual rate of 4.42%. The capital city, Lilongwe, had a population of 587,000 in that year. Other cities (and their estimated populations) include Blantyre (547,500), Mzuzu (99,700), and Zomba (73,400).

The prevalence of HIV/AIDS has had a significant impact on the population of Malawi. The UN estimated that 16.1% of adults between the ages of 15–49 were living with HIV/AIDS in 2001. The AIDS epidemic causes higher death and infant mortality rates, and lowers life expectancy.

MIGRATION

Accelerating migration from rural to urban areas contributed to an annual urban growth rate of about 6% in the early 1990s. Between October 1992 and mid-1996, 1.3 million Mozambican refugees repatriated from Malawi; the return of refugees to Mozambique was complete. In 2004 persons of concern to the United Nations High Commissioner for Refugees (UNHCR) in Malawi were 3,682 refugees and 3,335 asylum seekers from the Democratic Republic of the Congo and Rwanda. In 2004 over 1,700 Malawians sought asylum in South Africa and the United Kingdom.

Remittances in 2003 were $856,000. In 2005 the net migration rate was estimated at zero per 1,000 population, a significant change from -17.1 per 1,000 in 1990. The government views the migration levels as satisfactory.

ETHNIC GROUPS

The people of Malawi belong mainly to various Central Bantu groups. The Chewas are primarily located in the central regions of the country. The Nyanja live primarily in the south and the Lomwe (Alomwe) live south of Lake Chilwa. Other indigenous Malawians include the Tumbuko, Tonga, and Ngonde. The Ngoni (an offshoot of the Zulus from South Africa) and Yao arrived in the 19th century. There are a few thousand Europeans, mainly of British origin, including descendants of Scottish missionaries. There are also small numbers of Portuguese, Asians (mainly Indians), and persons of mixed ancestry.

LANGUAGES

Numerous Bantu languages and dialects are spoken. Chichewa, the language of the Chewa and Nyanja, is spoken by more than half the population, but the Lomwe, Yao, and Tumbuka have their own widely spoken languages, respectively known as Chilomwe, Chiyao, and Chitumbuka. English and Chichewa are the official languages.

RELIGIONS

As of a 2004 report, it is believed that more than 70% of the population are Christian, with the largest groups being affiliated with the Roman Catholic and Presbyterian (Church of Central Africa Presbyterian—CCAP) churches. There are smaller numbers of Anglicans, Baptists, Evangelicals, and Seventh-Day Adventists. Muslims account for approximately 20% of the population, with most belonging to the Sunni sect. Tribal religionists account for a small percentage of the population. There are also small numbers of Hindus and Baha'is. Certain Christian and Muslim holidays are celebrated as national holidays.

TRANSPORTATION

In 2004, Malawi had 797 km (495 mi) of railways, all of it narrow gauge. The main line of the rail system consisted of a single tracked, 1.067-m/3-ft 6 in (narrow) gauge rail line that ran from Salima to Nsanje, a distance of 439 km (273 mi), and operated by Malawi Railways. The line was extended from Salima to Lilongwe in 1977 and was later extended to Mchinji, on the border with Zambia. At Chipoka, 32 km (20 mi) south of Salima, the railway connects with the Lake Malawi steamer service, also operated by Malawi Railways. The railway line extends, in the south, from Nsanje to the port of Beira in Mozambique. The Central African Railway Co., a subsidiary of Malawi Railways, operates the 26 km (16 mi) span from Nsanje to the Mozambique border. Malawi Railways was privatized in 1999.

In 2002, Malawi had an estimated 14,594 km (9,069 mi) of roads, of which 2,773 km (1,723 mi) were paved. In 2003 there were 11,400 passenger cars, and 14,220 commercial vehicles.

Until 1982, about 95% of Malawi's foreign trade passed through Mozambican ports, mainly by rail connections, but by 1987, because of insurgent activity in Mozambique, over 95% of Malawi's exports were moving through South Africa's port of Durban. The use of this longer route, with only road transport through Malawi, was costing $50 million a year in extra transport expenses. Since 1990, when Mozambican rebels closed down the route, goods have been shipped through Zambia. As of 1999, major Malawi ports and harbors include Chipoka, Monkey Bay, Nkhata Bay, and Nkhotakota. As of 2003, Malawi had 700 km (435 mi) of navigable waterways on Lake Malawi and on the Shire River.

Airports in 2004 numbered 42, only 6 of which had paved runways as of 2005. Malawi's principal airports include Kamuzu International Airport, at Lilongwe, and Chileka, at Blantyre. Air Malawi, the national airline established in 1967, provides international and domestic air service. National carriers to some other countries in the region operate complementary services to Malawi. There are no direct services to Asia and the Pacific or the Americas. In 2003, about 109,000 passengers were carried on scheduled domestic and international airline flights.

HISTORY

Malawi has been inhabited for at least 12,000 years; its earliest peoples were nomadic hunter-gatherers. By the 13th century, Bantu-speaking migrants had entered the region. The Chewa peoples had become dominant by the early 16th century; their clans were consolidated under the leadership of a hereditary ruler called the karonga. Before the coming of the Europeans in the second half of the 19th century, Malawi was an important area of operations for Arab slave traders. The incursions of slaving took a heavy toll on the inhabitants, although the Chewa state never came under direct Arab rule. One of the major stated objectives of British intervention in the territory was to stamp out the slave trade.

The first European to explore the area extensively was David Livingstone, whose reports in the 1850s and 1860s were instrumental in the establishment of a series of mission stations in Nyasaland (as Malawi was then known) during the 1870s. In 1878, the African Lakes Company was formed by Scottish businessmen to supply the missions and provide a "legitimate" alternative to the slave trade. As the company extended its operations, it came into conflict with Yao tribesmen and Arab outposts toward the northern end of Lake Malawi. Fighting ensued in 1887–89, and pacification was completed only some years after the British government had annexed the whole of the territory in 1891. To Sir Harry Johnston, the first commissioner of the protectorate, fell the task of wiping out the remaining autonomous slave-trading groups. These antislavery operations were assisted by gunboats of the Royal Navy.

Nyasaland attracted a small group of European planters in the first decades of the 20th century. This group settled mainly in the Shire Highlands, and its numbers were never large. The territory was viewed by the imperial government as a tropical dependency, rather than as an area fit for widespread white settlement; many of the frictions that marred race relations in the Rhodesias were therefore minimized in Nyasaland. Missionaries and colonial civil servants consistently outnumbered planters in the European community, and lands occupied by European estates accounted for only a small part of the total land area.

Between World Wars I and II, the policy of the imperial government was built around the concept of "indirect rule"—that is, increasing the political responsibility of the African peoples by building on the foundations of their indigenous political institutions. Although this policy was not implemented at a rapid pace, it was generally assumed that Nyasaland would ultimately become an independent African-led state. In 1953, however, Nyasaland was joined with the two Rhodesias—Northern Rhodesia (now Zambia) and Southern Rhodesia (now Zimbabwe)—in the Central African Federation. The Africans' reaction to this political arrangement was hostile. Disturbances sparked by opposition to the federation in 1959 led to the declaration of a state of emergency, and some Africans, including Dr. Hastings Kamuzu Banda, were detained.

The African political leaders imprisoned in Southern Rhodesia were released in April 1960, and they gathered African support for the Malawi Congress Party (MCP). The MCP increased the campaign against federation rule and in the August 1961 elections polled more than 90% of the vote, winning all of the 20 lower-roll seats and two of eight upper-roll places. An era of "responsible" government then began, with the MCP obtaining five, and eventually seven, of the 10 available Executive Council positions. At a constitutional conference held in London in November 1962, it was agreed that Nyasaland should become fully self-governing early in 1963, and that Banda, who headed the MCP, should become prime minister. On 19 December 1962, the British government announced acceptance "in principle" of the right of Nyasaland to secede from the federation.

In February 1963, as scheduled, Nyasaland became a self-governing republic. In July, at a conference held at Victoria Falls, it was decided that the Central African Federation would break up by the end of the year. In October, Banda visited the United Kingdom and successfully negotiated full independence, effective in mid-1964 after a general election based on universal adult suffrage. Accordingly, on 6 July 1964, Nyasaland became a fully independent Commonwealth country and adopted the name Malawi. On 6 July 1966, Malawi became a republic, and Banda assumed the presidency. After the constitution was amended in November 1970, Banda became president for life.

During the first decade of Banda's presidency, Malawi's relations with its black-ruled neighbors were sometimes stormy. At the opening session of the MCP convention in September 1968, President Banda made a claim to extensive territories outside the present boundaries of Malawi. The claim covered the whole of Lake Malawi and parts of Tanzania, Mozambique, and Zambia.

The Tanzanian government asserted that President Banda could make territorial claims only because he had the support of South Africa, Rhodesia (which at that time had a white minority government), and Portugal (which then still ruled Mozambique). In fact, in 1967, Malawi had become the first black African country to establish diplomatic relations with white-ruled South Africa; in August 1971, moreover, Banda became the first black African head of state to be officially received in South Africa, which supplied arms and development funds to Malawi.

The Banda government also faced some internal opposition. In October 1967, the Malawi government announced that a group of rebels, numbering about 25, wearing police uniforms and posing as insurgents from Mozambique, had entered Malawi with the intention of killing President Banda and his ministers. Eventually, eight of the rebels were convicted of treason and sentenced to death; five others, including Ledson Chidenge, a member of the National Assembly, were sentenced to death for the murder of a former official of the MCP.

The aging Banda continued to rule Malawi with an iron hand through the 1970s and into the late 1980s. Several thousand people were imprisoned for political offenses at one time or another during his rule. One of these was former Justice Minister Orton Chirwa, leader of an opposition group in exile, who in May 1983 was sentenced to death after having reportedly been abducted from a town across the Zambian border in late 1981. Chirwa's sentence was commuted to life imprisonment in 1984. He died in prison in October 1992. The leader of another dissident group, Attati Mpakati, was assassinated in Harare, Zimbabwe, in March 1983. Three government ministers and a member of parliament—two of them key leaders of the MCP, with one of them, party secretary-general Dick Matenje, regarded as a possible successor to Banda—died in the middle of May 1983 in a mysterious car accident. Another staunch critic of the Banda regime, the journalist Mkwapatira Mhango, was killed together with nine members of his family in a bomb attack in Lusaka, Zambia, in 1989.

A serious problem in the 1980s concerned the activities of the Mozambique National Resistance (MNR), which, in its efforts (backed by South Africa) to bring down the government in Maputo, seriously disrupted Malawi's railway links with Mozambique ports. As a result, an increasing share of Malawi's trade had to be routed by road through Zambia and South Africa at great expense. In 1987, Malawi allowed Mozambican troops to patrol areas along their common border and sent several hundred troops into northeast Mozambique to help guard the railway leading to the port of Nacala. Other critical problems for Malawi, particularly during the late 1980s and the early 1990s were the nation's growing debt burden, severe drought, and the nearly one million refugees from Mozambique, most of whom have now returned to Mozambique.

In 1992, Banda's grip began to weaken. In March, Malawi's eight Roman Catholic bishops issued a pastoral letter protesting detention without trial and harsh treatment of political prisoners. University students demonstrated. Wildcat strikes and rioting in Blantyre and Lilongwe followed the arrest of opposition trade unionist Chakufwa Chihana in May. Nearly 40 were killed by police gunfire in the first significant antigovernment demonstrations since 1964. Chihana was released on bail in September and he formed a new group, the Alliance for Democracy (AFORD), that campaigned for multiparty elections. In December, Chihana was sentenced to two years for sedition.

Pressure mounted (including threats by aid donors abroad to suspend assistance), and in October Banda agreed to hold a referendum early in 1993 on whether Malawi should remain a one-party state. In the referendum, on 14 June 1993, 63% of those voting favored adopting multiparty democracy. Two opposition groups, AFORD and the United Democratic Front (UDF), both led by former MCP officials, held a massive rally in January 1993. Meanwhile, three opposition groups in exile merged to form the United Front for Multiparty Democracy, which then merged with the UDF inside Malawi. Chihana was released two days before the referendum.

In July and November 1993, parliament passed bills eliminating from the constitution single-party clauses (such as Hastings Kamuzu Banda's life presidency), appending a bill of rights, establishing a multiparty electoral law, and repealing detention without trial provisions of the Public Security Act. Dialogue among various major parties resulted in the establishment of a National Consultative Council and a National Executive Committee, with representatives from all registered parties, to oversee changes in the constitution, laws, and election rules and procedures. In December 1993, security forces disarmed Banda's paramilitary MCP Young Pioneers.

On 16 May 1994 the National Assembly adopted a provisional constitution, and the country held its first multiparty elections the following day. Bakili Muluzi of the UDF, a former cabinet minister, defeated Banda (MCP), Chihana (AFORD), and Kamlepo Kalua (Malawi Democratic Party). Of the 177 parliamentary seats contested, the UDF took 84, the MCP took 55, and AFORD 36. Muluzi immediately ordered the release of political prisoners and closed the most notorious jails. The new constitution took effect on 18 May 1995.

Malawi's second multiparty elections were held on 15 June 1999. The balloting showed a distinct regional cast to party constituency. Leading the UDF, Muluzi emerged the winner with 51.4% of votes in the presidential elections, followed by the MCP candidate, Gwanda Chakuamba, with 44.3%. Muluzi's UDF won 94 of 193 parliamentary seats, four short of a simple majority. Chakuamba's MCP took 63 seats, and its electoral ally, the AFORD, won 31; four seats went to independents. The results confirmed the regional voting trend set in 1994, with the UDF winning the densely populated south, the MCP strong in the central region and all of AFORD's seats coming from the rugged north.

Although international observers declared the contest free and fair, opponents alleged that the UDF had rigged the elections, and refused to recognize the outcome. Attempts to seek legal redress were rebuffed, leading to riots and the razing of 10 mosques in the north. At least two people were killed. Muluzi was inaugurated in Blantyre on 21 June 1999.

In July 2002, the National Assembly rejected proposals to amend the constitution to allow Muluzi to run for a third term in 2004. The proposals, resubmitted in February 2003, were quickly withdrawn under protests from opposition groups, civil society, and the diplomatic community. In all, three people were killed in the 2002 protests. Muluzi laid to rest speculation over his political intentions when he announced in April 2003 that the UDF National Executive Committee had endorsed a 68-year-old economist, Bingu wa Mutharika, as its presidential candidate for 2004. Mutharika, who hailed from Thyolo District 40 km (25 mi) southeast of Blantyre, was deputy governor of the Reserve Bank of Malawi before being appointed minister in the newly created Department of Economics and Planning.

Severe food shortages in 2002 affected some 3.2 million people. The shortages exacerbated living conditions for more than 65% of the population considered "poor," and for some 15% of the adult population infected with HIV/AIDS. Widows of AIDS victims were increasingly subjected to property grabbing by relatives.

In June 2003, overriding a court order, the government deported five men accused of al-Qaeda connections. Muslim protests in the central district of Kasungu were disbursed by police using rubber bullets and tear gas. In the town of Mangochi in the south, Muslim demonstrators looted seven churches and the offices of Save the Children USA. About 50 Muslims stormed the police station where the detainees were being held, but were repelled by the police. Two of the five men headed local charities, while a third was a teacher at a Muslim school. Muluzi, himself a Muslim, declared that religious intolerance would not be allowed.

The third presidential and legislative elections were held on 20 May 2004. These elections had been scheduled to be held on 18 May, but were postponed for two days because the opposition complained of irregularities in the voters' roll. The opposition argued that the number of voters on the roll was several times larger than the eligible population of voting age in Malawi. The results were announced on 25 May by the Malawi Electoral Commission. Bingu wa Mutharika, the UDF candidate who had been handpicked by outgoing President Muluzi, was declared elected. Mutharika received 35% of the votes, John Tembo of the MCP received 27%, Gwanda Chakuamba—the candidate of the Mgwirizano Coalition—received 26%, Brown Mpinganjira of the National Democratic Alliance received 8%, and Justin Malewezi of the Peoples' Progressive Movement received 3%. Of the 193 National Assembly seats available, the MCP won 60 seats, the UDF won 49, the Mgwirizano Coalition won 28, and independents won 38. This is in stark contrast to the 1999 elections in which the UDF almost won a majority of the seats.

Surveys conducted by Malawi media groups before the election had put Gwanda Chakuamba, the candidate of the Mgwirizano Coalition—a seven-party opposition coalition—in the lead. Immediately after the announcement of the results riots broke out in the major cities of Malawi, particularly Blantyre, the stronghold of Chakuamba, and a number of people lost their lives, shot by the police. Both Chakuamba and John Tembo of the MCP immediately challenged the results in court and demanded a recount. Following the elections in 2004 the political climate in Malawi remained unstable. As of early 2006, the National Assembly was in the process of impeaching Bingu wa Mutharika, who, in February 2005, left the UDF to form his own party, the Democratic Progressive Party (DPP).

After Banda was forced to liberalize his regime, Mutharika was one of the founders of the United Democratic Front, the party that won Malawi's first multiparty elections in 1994. Mutharika was at that time a supporter of the UDF leader, President Bakili Muluzi, but he soon became a critic of Muluzi's economic policies and left the UDF. He formed the United Party (UP) in 1997 and unsuccessfully opposed Muluzi in the 1999 presidential elections. Mutharika dissolved the UP and rejoined the UDF after being offered the deputy governorship at the Reserve Bank of Malawi. Immediately after being elected president in 2004, Mutharika fell out of favor with his predecessor and supporter, Muluzi, because of Mutharika's zero tolerance policy toward corruption. Once out of the presidency, Muluzi refused to retire as head of UDF and remained its chair. Muluzi's staunch supporters accused Mutharika of persecuting and harassing them through his campaign to end corruption. There was talk of firing Mutharika from the UDF. On 5 February 2005, Mutharika announced his resignation from the UDF and formed his own political party, the DPP. There was also an alleged assassination plot against him by UDF stalwarts in early January 2005. Those accused were later pardoned by Mutharika, but he maintained the existence of the plot.

Mutharika continued to fight for his political survival as opposition parties forged ahead with plans to impeach him. The fight pitted Mutharika against former president of the country and now chairman of the United Democratic Front (UDF), Muluzi, with the UDF proposing an impeachment motion after Mutharika left the party which had sponsored him in the 2004 national elections. Mutharika's formation of his own political organization, DPP, effectively relegated the UDF to an opposition rather than a ruling party. Thus, on paper, the opposition parties formed the largest bloc in parliament while Mutharika's party, the DPP, did not have any seats. Muluzi aggressively sought the cooperation of the other opposition parties (which included John Tembo's MCP and Gwanda Chakuamba's Republican Party) to oust Mutharika through impeachment proceedings. He promised that once Mutharika was removed, a national governing council composed of the leaders of the three major political parties would rule the country. Such a promise contradicts the constitution, which notes that in the event of a vacancy in the presidency, the vice president automatically takes over.

As of mid-2006, Malawi's political crisis had not been resolved, with the former president (Muluzi) facing a corruption probe from the government's Anti-Corruption Bureau (ACB), and his successor (Mutharika) facing impeachment in parliament. The ACB is carrying out what UDF sees as politically motivated investigations into allegations that Muluzi deposited Kwacha 1.4 billion (us$11.4 million) of donor funds into his personal account for his own personal use during his tenure as president. Although Mutharika was seen as having narrowly won the possibly rigged presidential elections in May 2004 under a UDF ticket, once in office he quickly won public support for his anticorruption drive, which also received the backing of donors who had unfrozen aid to the country. In October 2005, there were a number of demonstrations both for and against Mutharika's impeachment. UDF supporters marched in the commercial capital of Blantyre, demanding the immediate impeachment and removal of Mutharika from office. On 24 October 2005, as an impeachment motion was tabled in parliament by UDF, angry DPP supporters and sympathizers marched on parliament to protest against the proposed motion. The demonstrations turned violent with marchers vandalizing cars of opposition MPs.

Observers note that important national issues such as a worsening food crisis and the plight of HIV/AIDS victims were sidelined by the political wrangle. Instead of tackling these issues the government was distracted and the parliament lost focus to assist in tackling these issues. During the last days of the Muluzi presidency, Western donors froze balance of payments support to Malawi over corruption and governance concerns. However, with Mutharika's strong anticorruption stance, aid began to flow back into the country. However, continuing political crisis could again jeopardize foreign development assistance to Malawi.

GOVERNMENT

Malawi officially became a republic on 6 July 1966, and its first constitution was adopted that year. The current constitution took effect on 18 May 1995 reaffirming the president as the head of state and supreme executive authority. In July 2003, he led a 38-member cabinet. Legislative power is vested in a unicameral parliament comprising a National Assembly of 193 seats with members elected by popular vote to serve five-year terms. The most recent elections were held in 2004.

POLITICAL PARTIES

Malawi was officially a one-party state from October 1973 until July 1993. The Malawi Congress Party (MCP) was the national party and Hastings Kamuzu Banda was its president for life. All candidates for the National Assembly had to be members of the MCP.

For years the opposition groups in exile achieved little success in their efforts to unseat the Banda government. The Socialist League of Malawi (LESOMA), with headquarters in Harare, was directed by Attati Mpakati until his assassination in March 1983. A second group, the Malawi Freedom Movement (MAFREMO), based in Tanzania, was led by Orton Chirwa, who was seized by Malawi authorities in late 1981 and imprisoned for life until his death in 1992. The Congress for the Second Republic, also based in Tanzania, was led by former External Affairs Minister Kanyama Chiume. The Save Malawi Committee (SAMACO) was formed in Lusaka, Zambia, in 1983.

In September 1992, trade unionist Chakufwa Chihana formed the Alliance for Democracy (AFORD) before being convicted of sedition. AFORD and others pushed successfully for a referendum on adopting a multiparty system, and the United Democratic Front (UDF) combined with a coalition in exile (the United Front for Multiparty Democracy) late in 1992.

From the introduction of multiparty competition in May 1994 to the elections in 2004, the UDF and its leader, Bakili Muluzi, dominated the political arena. In the 1994 presidential contest, Muluzi garnered 47.3% of the vote, and his party 84 of the 177 elective seats in the National Assembly. Muluzi obtained 51.4% of the vote in the 1999 presidential poll, and the UDF won 94 of 193 Assembly seats. However, a shake-up in UDF hierarchy in 2003 revealed vulnerabilities in the party's leadership and organization. This led to Muluzi handpicking his successor, Bingu wa Mutharika, who narrowly won 36% of the vote in the controversial May 2004 elections. Furthermore, UDF won only 49 out of the 193 seats in parliament, showing that the dominance the UDF had during Muluzi's tenure had considerably waned. Bingu wa Mutharika then abandoned the UDF and moved on to form his own political party, the Democratic Progressive Party (DPP), a move which infuriated Bakili Muluzi who attempted to lure other opposition parties to join him in impeaching Mutharika.

Since the 2003 shake-up in the UDF hierarchy, dissenters from this shake-up have formed their own political parties. The splinter group parties from the UDF include the National Democratic Alliance (NDA) founded by Brown Mpinganjira, who fell out of favor with Bakili Muluzi. At the general elections of May 2004 this party won 8 out of 193 seats. Brown Mpinganjira later de-registered his party and rejoined the UDF. Other former UDF and non-UDF leaders of smaller parties formed a loose electoral alliance called the Mgwirizano Coalition. This coalition includes seven smaller parties: Malawi Democratic Party, Malawi Forum for Unity and Development, Movement for Genuine Democratic Change, National Unity Party, People's Progressive Movement, People's Transformation Party, and Republican Party. Gwanda Chakuamba, founder and leader of the Republican Party, was the presidential candidate for the Mgwirizano Coalition in the May 2004 elections. He won 26% of the vote and the Mgwirizano Coalition won 27 out of 193 seats.

A recent addition to the Malawi political landscape is the Democratic Progressive Party (DPP) which was the ruling political party in Malawi as of mid-2006. It was formed in February 2005 by Malawian President Bingu wa Mutharika after a dispute with the United Democratic Front. There were allegations that members of the former governing UDF did not adequately tackle corruption. The many defections from UDF greatly weakened the position of UDF in both the government and the national assembly. A plethora of smaller parties could wield power if they formed effective coalitions, as illustrated by the Mgwirizano Coalition.

LOCAL GOVERNMENT

In 1996, Malawi was divided into three administrative regions—Northern, Central, and Southern—which were subdivided into 24 districts. In 2005 the number of districts was increased to 28 as some large districts were sub-divided into two. District councils provide markets, postal agencies, roads, and rural water supplies and exercise control over business premises and the brewing and sale of beer. More important, however, are the councils' responsibilities for primary education. Some of the councils run public health clinics. Council expenditures are mainly financed from direct government education grants, calculated to meet the salaries of teachers in most of the district schools. Other sources of revenue include annual taxes on all males over the age of 17 years who are residents in the district and charges for services rendered.

Town councils have powers similar to those of the district councils, but with greater emphasis on the problems that arise in urban areas. Their main functions are sewerage, removal of refuse, the abatement of nuisances, construction and maintenance of roads, and, in some cases, the provision of fire-fighting services. Revenue for town councils comes mainly from direct taxes on property.

JUDICIAL SYSTEM

Since 1969, Malawi has operated under two parallel court systems. The first is based on the United Kingdom legal system with local courts and a local appeals court in each district. Formerly, these courts heard all cases of customary law and had wide statutory, criminal, and civil jurisdiction. The upper layers consist of the Supreme Court of Appeal, the High Court, and magistrates' courts. A chief justice and four puisne judges appointed by the president staff the High Court. There is a chain of appeals from the local courts up to the Supreme Court of Appeal.

A second system was established in November 1969, when the National Assembly empowered the president to authorize traditional African courts to try all types of criminal cases and to impose the death penalty; the president was also permitted to deny the right of appeal to the High Court against sentences passed by the traditional courts, a right formerly guaranteed by the constitution. Traditional court justices are all appointed by the president. Appeals from traditional courts go to the district traditional appeals courts and then to the National Traditional Appeal Court. Appeals from regional traditional courts, which are criminal courts of the first instance, go directly to the National Traditional Appeal Court.

In 1993, the attorney general suspended the operation of regional and national level traditional courts in response to a report by the National Consultative Council on problems in the workings of the traditional court system. Since then the trend is toward moving serious criminal and political cases from traditional to modern courts. Education and training seminars have led to some improvements in the functioning of the local traditional courts.

The constitution provides for an independent judiciary, which is respected in practice. Defendants have the right to public trial, to have an attorney, to challenge evidence and witnesses, and to appeal. The constitution superseded many old repressive laws. The High Court may overturn old laws that conflict with the constitution.

ARMED FORCES

In 2005, Malawi had an army of 5,300 personnel, organized into 3 infantry battalions, 1 independent paratroop battalion, 1 Marine company and 1 support battalion. The Army's air wing numbered 200 and the maritime wing had 220 members. There was a paramilitary gendarmerie of 1,500 in the mobile police force. In 2005, the defense budget totaled $12.8 million.

INTERNATIONAL COOPERATION

Malawi became a member of the United Nations on 1 December 1964; the nation participates in ECA and several nonregional specialized agencies, such as the FAO, World Bank, ILO, IFC, UNESCO, UNIDO, and the WHO. Malawi also belongs to the WTO, the African Development Bank, the ACP Group, the Commonwealth of Nations, COMESA, G-77, the African Union, and the Southern Africa Development Community (SADC). The country is a member of the Nonaligned Movement and the Organization for the Prohibition of Chemical Weapons. The government has offered support to UN missions and operations in Kosovo (est. 1999), Liberia (est. 2003), the DROC (est. 1999), and Burundi (est. 2004).

In environmental cooperation, Malawi is part of the Basel Convention, the Convention on Biological Diversity, Ramsar, CITES, the Kyoto Protocol, the Montréal Protocol, MARPOL, the Nuclear Test Ban Treaty, and the UN Conventions on Climate Change and Desertification.

ECONOMY

Malawi is an agricultural economy which, in recent years, has been troubled by drought and financial instability. It is dependent for most of its income on the export sales of tobacco (60%), and tea and sugar (20%). Other agricultural products include peanuts, coffee, and wood products. As a result of the 1992 drought, GDP declined by 7.9% after averaging 4.5% annual growth in 1989–91, and an impressive 6.7% annual growth rate during the 1970s. Growth averaged an annual 3.7% from 1988 to 1998. In 2001 GDP grew at -4.9% owing to a devastating drought. It was 1.8% in 2002, 4.4% in 2003, 4.2% in 2004 and 1% in 2005. International aid donors, concerned about human rights abuses in Malawi, have tied future support to human rights reforms. Beginning in 2000, the country was the recipient of $1 billion in debt service relief under the IMF/World Bank Heavily Indebted Poor Countries Initiative.

Manufacturing is small-scale, directed mainly to the processing of export crops. In 2000, the agricultural sector employed an estimated 86% of Malawi's population and accounted for about 40% of GDP. Over 90% of the population lives in rural areas. The sector experienced severe droughts in 1979–81, 1992, 1994, and 2001–02. Periods of flooding also plague Malawi, as happened in 2003. Production of maize, the main food staple, during the 2001/02 growing season was 1.6 million metric tons, approximately 600,000 short of estimated domestic demand. The World Bank approved a $50-million assistance package for drought recovery in Malawi in November 2002. Other environmental challenges include deforestation and erosion. Recent economic reforms have led to the market pricing in the agricultural sector. The fledgling mining sector in Malawi is slowly growing with the support of international financing.

The government continues to privatize the ownership of public enterprises although the wealth of the country resides in the hands of a small elite. By 2005, about 50% of the more than 90 state-owned enterprises had been sold to private hands, 22% were actively being offered for privatization and an additional 13% had been earmarked for future transfer to the private sector.

INCOME

The US Central Intelligence Agency (CIA) reports that in 2005 Malawi's gross domestic product (GDP) was estimated at $7.6 billion. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $600. The annual growth rate of GDP was estimated at 1%. The average inflation rate in 2005 was 15.4%. It was estimated that in 2005 agriculture accounted for 35.9% of GDP, industry 14.5%, and services 49.6%.

According to the World Bank, in 2003 remittances from citizens working abroad totaled $1 million and accounted for approximately 0.1% of GDP. Foreign aid receipts amounted to $498 million or about $45 per capita and accounted for approximately 29.8% of the gross national income (GNI).

The World Bank reports that in 2003 household consumption in Malawi totaled $1.46 billion or about $132 per capita based on a GDP of $1.7 billion, measured in current dollars rather than PPP. Household consumption includes expenditures of individuals, households, and nongovernmental organizations on goods and services, excluding purchases of dwellings. It was estimated that for the period 1990 to 2003 household consumption grew at an average annual rate of 4.4%. Approximately 50% of household consumption was spent on food, 7% on fuel, 2% on health care, and 6% on education. It was estimated that in 2004 about 55% of the population had incomes below the poverty line.

LABOR

As of 2001, the economically active population was estimated at 4.5 million. According to a 2003 estimate, 90% of the labor force engaged in agriculture. There is very little industry, and no available data on unemployment.

Although sanctioned by law, union membership is quite low due to the small number of workers in the formal sector of the economy. About 15% of the workforce was unionized in 2002. The only labor federation was the Trades Union Congress of Malawi, to which all unions belonged. In theory, unions have the right to organize, bargain collectively, and strike, but in practice labor relations are still in development.

The minimum working age is 14, but many children work due to cultural norms, agricultural predominance, and severe economic hardship. In 2002, the minimum wage was approximately $0.89 per day in urban areas and $0.66 in rural areas. This does not provide an adequate living wage. The legal maximum workweek is 48 hours but this regulation is not generally enforced.

AGRICULTURE

The agricultural sector is drought-prone and experienced severe droughts in 1979–81, 1992, and 1994. About 77% of the total land area of Malawi is under customary tenure—that is, subject to land allocation by village headmen based on traditional rights of succession by descent. Estate farming occupies about 23% of the cultivated land and provides about 90% of export earnings. In all, about 21% of Malawi's total land area is arable. Malawi is self-sufficient in food production (except during droughts), but the population increased more rapidly than the food supply in the 1980s.

Tobacco was first grown in 1889 near Blantyre in southern Malawi. Today, most production comes from the central region (around Lilongwe). Tobacco production was estimated at a record 160,014 tons in 1996 but fell to 69,500 tons in 2004. Malawi exports more than 95% of the tobacco it produces, which generates some 70% of all foreign earnings. Malawi's tobacco sector is in transition away from a rigid government-controlled system to a more market-oriented system that includes smallholder tobacco growers.

Tea, a major export crop, is produced mostly on estates; about 16,000 hectares (40,000 acres) are in tea plantations, mainly in the Mulanje and Thyolo districts. Production in 2004 was 45,000 tons. Sugarcane production was about 2,100,000 tons in 2004. Other cash crops produced in 2004 include peanuts, 61,000 tons, and seed cotton, 40,000 tons.

Although subsistence farmers participate in the production of export crops more extensively now than in the preindependence period, much customary agriculture is still devoted to cereal production. Pressure of population on the land is mounting and, in a few areas, expansion of acreage under export crops has been discouraged in favor of food production. Corn is the staple food crop; about 1,733,000 tons were produced in 2004. Late rains, floods, and an increasing Mozambican refugee population kept corn production from meeting domestic demand during the mid-1990s. Other food crops, with 2004 estimated production figures, include cassava, 2,559,000 tons; potatoes, 1,784,000 tons; beans, 79,000 tons; sorghum, 45,000 tons; plantains, 200,000 tons; bananas, 93,000 tons; and paddy rice, 50,000 tons.

ANIMAL HUSBANDRY

Animal husbandry plays a minor role in the economy. Pressure on the land for cultivation is sufficiently intense in many areas to rule out stock-keeping on any scale. In 2005 there were an estimated 1,900,000 goats, 750,000 head of cattle, 456,000 hogs, and 115,000 sheep. The number of poultry was estimated at 15.2 million in 2005. Meat production totaled 59,000 tons in 2004, including 21,000 tons of pork and 16,000 tons of beef. Milk production was estimated at 35,000 tons.

FISHING

The growing commercial fishing industry is concentrated mainly in Lake Malawi, with small-scale activity in Lake Malombe, Lake Chilwa, and the Shire River. Fish farming is carried on in the south. The total catch in 2003 was estimated at 54,200 tons. Large employers of labor in the Southern Region are the major buyers, and much of the catch is sold directly to them. Fish from Lake Malawi contribute about 70% of animal protein consumption.

FORESTRY

Forests and woodlands cover an estimated 2.6 million hectares (6.3 million acres), or 27% of the land area. Natural forests are extensive, and in the high-altitude regions, the Forestry Department is engaged in a softwood afforestation program. However, Malawi's annual rate of deforestation was 2.4% during 1990–2000. Sizable plantations of pine, cypress, and cedar have been established. Roundwood removals in 2004 were estimated at 5,621,000 cu m (198,400,000 cu ft), of which 91% went for fuel.

MINING

Quarrying for limestone and other building materials was the major mining activity in Malawi, but gemstones, including agate, amethyst, aquamarine, garnet, rhodolite, rubies, and sapphires, have also been produced, on a small scale. In 2004, a total of 21,224 metric tons of limestone (for cement) was produced. A total of 1,820 kg of gemstones were extracted in 2004, down from 2,297 kg in 2003. Also produced in 2004 were dolomite, lime, and crushed stone for aggregate, as well as possibly clays, sand and gravel, and other stone. The country had known deposits of apatite, asbestos, bauxite, columbium (niobium), corundum, dimension stone (including blue and black granite), galena, gold, granite, graphite, ilmenite, kaolin, kyanite, mica, monazite, phosphate rock, pyrite, rutile, tourmaline, uranium, and vermiculite, which have occasionally been exploited. Prospecting for other minerals has been undertaken, but no resources of commercial significance have been discovered, except for coal, bauxite (28.8 million tons), kaolin (14.1 million tons), silica sand (25 million tons), and monazite and strontianite (11 million tons in Kangankunde Hill). Mining and quarrying accounted for 1% of GDP in 2004. The mining sector in 2003, grew by 23.5%. No minerals were among the leading export commodities. The outlook for Malawi's mineral industry was tied to the country's ability to spur exports, improve educational and health facilities, solve environmental problems of deforestation and erosion, and deal with the rapidly growing problem of HIV/AIDS.

ENERGY AND POWER

Malawi, as of 1 January 2005 had no known petroleum, or natural gas reserves. Nor does it have any oil refining capacity. However, the country does have small recoverable reserves of coal.

In 2004, demand for petroleum products averaged 6,000 barrels per day, all of which was imported. There was no recorded demand or imports of natural gas in that year. Low-grade bituminous coal reserves were known about for many years, but mining did not begin until the last decades of the 20th century. Malawi has recoverable coal reserves of about 2 million short tons, reported as of July 2005. In 2003, coal consumption came to 0.02 million short tons.

Both the consumption and the production of electric power are small, even by African standards. Installed capacity, as of 1 January 2003 totaled 308,000 kW, the bulk of which is hydroelectric. In 2002, hydropower accounted for a little more than 93% of capacity, with conventional thermal plants accounting for the rest. In 2003, electric power output totaled 1.30 billion kWh, with demand that year at 1.21 billion kWh.

INDUSTRY

After a decade of rapid expansion—11% average growth per year in the 1970s—the pace of manufacturing growth slowed to 3.6% during 1980–90, and during 1990–2000, to 1.7%. In 2004, industry accounted for 19% of GDP.

Although Malawi's manufacturing sector is small, it is diverse. The processing of tea, tobacco, sugar, coffee, cement, and cotton accounts for most of its output. Factories manufacture soap, detergents, cigarettes, furniture, cookies, bread, blankets and rugs, clothing, and mineral waters. Other installations include a gin distillery, a cotton mill, and two textile plants. Brick making is well established. Roofing tiles are also produced, and radios are assembled. Other products made in Malawi include agricultural implements, bicycle frames, polishes, edible oils and fats, cattle foodstuffs, flour, matches, fishing nets, rope, twine and yarns, toiletries, and footwear. Two plants in Malawi retread tires, and its industries make a wide range of metal products.

SCIENCE AND TECHNOLOGY

Research stations for tea, tobacco, and other aspects of agriculture conduct their activities under the auspices of the Ministry of Agriculture. The Ministry of Forestry and Natural Resources maintains forestry and fisheries research units. The University of Malawi includes Bunda College of Agriculture and Kamuzu College of Nursing, both at Lilongwe; Malawi Polytechnic and the College of Medicine at Blantyre; and Chancellor College at Zomba, which has a faculty of science. The Geological Survey of Malawi, founded in 1921, is headquartered in Zomba. The Medical Association of Malawi, founded in 1967, is headquartered in Blantyre.

In 1987–97, science and engineering students accounted for 27% of college and university enrollments. In 2002, high technology exports were valued at $1 million, 3% of the country's manufactured exports.

DOMESTIC TRADE

Domestic trade is concentrated in the larger towns, since transportation of goods to most rural areas is difficult and most rural residents have extremely low incomes. Agriculture is the basis of the economy, with about 90% of the population employed in subsistence farming. Local markets and stands for produce and baked goods prevail.

A small manufacturing sector is located near Blantyre, which is the country's major commercial center. There are a few larger supermarkets and grocery stores in Lilongwe, but with limited inventories. Karonga and Nsanje are the main trading ports. Zomba is a regional commercial center for agriculture. Licenses are required for all persons engaged in trading; fees vary with the nature

Country	Exports	Imports	Balance
World	457.0	723.5	-266.5
South Africa	58.6	291.1	-232.5
United States	58.2	24.1	34.1
Kenya	37.5	9.2	28.3
United Kingdom	36.7	39.0	-2.3
Germany	33.3	10.4	22.9
Netherlands	31.5	4.1	27.4
Japan	26.5	30.2	-3.7
Egypt	17.9	…	17.9
France-Monaco	15.1	4.2	10.9
Belgium	13.6	8.9	4.7
(…) data not available or not significant.

of the business. In 2005 inflation was about 15.4% a decline from a high of 22.7%. Per capita GDP was at about $600 in 2004.

Business hours are 7:30 or 8 am to noon and 1 or 1:30 pm to 4:30 or 5 pm, Monday through Friday, and 7:30 or 8 am to noon or 12:30 pm on Saturday. Banks are open weekdays from 8 to 12:30 pm (to 11:30 am on Wednesday and 10:30 am on Saturday).

FOREIGN TRADE

Malawi mostly exports tobacco (66%). Other commodity exports include tea (7.6%), sugar (6.0%), coffee (4.0%), and woven cotton fabrics (2.5%). Tea is sold primarily to the United Kingdom while sugar exports go to the EU and the United States.

BALANCE OF PAYMENTS

Malawi runs an annual deficit on current accounts, which is generally mitigated but not annulled by capital inflows, mostly in the form of development loans.

The Economist Intelligence Unit reported that in 2005 the purchasing power parity of Malawi's exports was $364.1 million while imports totaled $645 million resulting in a trade deficit of $280.9 million.

BANKING AND SECURITIES

The Reserve Bank of Malawi was established in Blantyre in 1964. It took over, by stages, the functions in Malawi of the former Bank of Rhodesia and Nyasaland until that bank wound up its affairs in June 1965. The main duties of the Reserve Bank are to maintain currency stability and to act as banker to the government and to the commercial banks. The Reserve Bank administers exchange control and acts as registrar for local registered stock. The Reserve Bank also handles the issue of treasury bills on behalf of the government.

Malawi's financial services are unsophisticated and basic. Aside from the central bank, there are five licensed commercial banks, which are dominated by the two government-owned banks, the National Bank of Malawi and the Commercial Bank of Malawi. In 1999, the NBM was 48% owned by Press Corporation Limited (PCL), and 39% by ADMARC; CBM was 23% owned by PCL, 22% by the Malawi government in direct shareholding, and 17% by the Malawi Development Corporation. The Malawi government owns MDC, ADMARC, and is PCL's largest shareholder (49%). As of 31 March 1999, total assets of the five banks reached about $300 million. The other three commercial banks are the First Merchant Bank Limited, the Finance Bank of Malawi, and Indefinance.

The Investment and Development Bank of Malawi (Indebank), formed in 1972 with foreign and local participation, provides medium- and long-term credit. Although the country's financial market has been liberalized, the sole mortgage finance institution, the New Building Society (NBS), which came into operation at independence in March 1964, faces no competition. The New Building Society's assets stood at $244.5 million in 1995.

A subsidiary of Indebank, the Investment and Development Fund (Indefund), finances small and medium-sized enterprises. The Malawi Development Corporation (MDC), which services the needs of large-scale industry, is state-owned. The Post Office Savings Bank (POSB) was restructured in 1994 and licensed as a commercial bank, the Malawi Savings Bank (MSB). Other major financial institutions include Loita Investment Bank, the Leasing and Financing Co. of Malawi (LFC), the Malawi Rural Finance Company (MRFC), and the Finance Corporation of Malawi (FINCOM).

The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $136.1 million. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $268.3 million. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 46.8%.

The Malawi Stock Exchange (MSE) was established in December 1994 along with Stockbrokers Malawi to deal with listed company shares and to act as a broker in government and other securities

Current Account			-200.7
Balance on goods		-150.8
Imports	-573.2
Exports	422.4
Balance on services		-172.5
Balance on income		-38.5
>Current transfers			161.1
Capital Account			…
Financial Account			134.0
Direct investment abroad		…
Direct investment in Malawi		5.9
Portfolio investment assets		…
Portfolio investment liabilities		…
Financial derivatives		…
Other investment assets		…
Other investment liabilities		128.1
Net Errors and Omissions			156.7
Reserves and Related Items			-90.0
(…) data not available or not significant.

approved by the Reserve Bank of Malawi (RBM). The stock exchange had no listings until November 1996, when shares in NICO were put up for sale. Since November 1994, the RBM has marketed Treasury bills of varying maturities (30, 61, 91, and 182 days) in an attempt to encourage greater participation by the private sector.

INSURANCE

Most insurance firms operating in Malawi are owned or sponsored by parent companies in the United Kingdom. However, the leading company, the National Insurance Co. (NICO), is owned by Malawi interests. There were seven insurance companies in operation in 1997. Motor vehicle insurance is compulsory.

PUBLIC FINANCE

Government revenues derive from import duties, income taxes on companies and individuals, income from government enterprises, excise duties, licenses, and value-added taxes. The fiscal year runs from 1 April to 31 March. Government consumption, which had an average annual growth rate of 7.0% during the 1980s, declined by 4.0% annually during the 1990s, and by 9.5% in 1998. Education, health, and agriculture were the three biggest items on the budget for 2000.

The US Central Intelligence Agency (CIA) estimated that in 2005 Malawi's central government took in revenues of approximately $844.6 million and had expenditures of $913.9 million. Revenues minus expenditures totaled approximately -$69.3 million. Public debt in 2005 amounted to 208.6% of GDP. Total external debt was $3.284 billion.

TAXATION

Individuals pay taxes on all income from Malawi, whether they are residents or nonresidents. Most operating businesses are required to prepay estimated tax on a quarterly basis. The corporate income tax in 2005 was 30%. Branches of foreign companies were taxed at 35%, but reduced rates applied to insurance businesses (21%), and to ecclesiastical, charitable or educational institutions or trusts (25%). Companies operating in export processing zones (EPZs) are exempt from corporate tax, and companies operating in priority areas can qualify for a ten-year exemption, followed by a reduced 15% tax rate, when the exemption expires. Other tax allowances are offered—for mining companies, for manufacturers, for exports, for training, among others—as investment incentives. Royalties, rents, fees and commissions are subject to a 20% withholding tax. Interest from banks is also subject to a 20% withholding rate if the interest is over 10,000 kwacha.

The income of individuals and partnerships is taxed according to a graduated scale with rates from 0–30%. For 2004, the government introduced a new top rate of 40%, and raised the threshold for taxable income from 30,000 kwacha to 36,000 kwacha (about $340 to $410). Municipal taxes are based on property valuations.

Malawi's main indirect tax is a 17.5% value-added tax (VAT) which applies to goods and selected services, including luxury goods and electronics, as well as imports.

CUSTOMS AND DUTIES

Trade licenses are required for the import and export of certain goods, including military uniforms, wild animals, some food, and military equipment. Malawi is a member of the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA), granting trade preferences to member states. The country also has bilateral trade agreements with Zimbabwe and South Africa, granting the duty-free exchange of goods.

In 1998, the government eliminated export taxes on tobacco, sugar, tea, and coffee. Machinery, basic foodstuffs, and raw materials are admitted with a 10–5% tax. In July 1999, the maximum tariff rate was reduced from 30% of value to 25%. Tariffs on intermediate goods and raw materials were reduced from 10% to 5% and from 5% to 0%, respectively.

Luxury goods are assessed at higher rates than ordinary consumer items. Excise duties are levied for revenue purposes on spirits, beer, cigarettes and tobacco, petroleum products, and certain other items.

FOREIGN INVESTMENT

The government actively encourages foreign investment, particularly in agriculture and in import-substitution and labor-intensive industries. Incentives such as exclusive licensing rights, tariff protection, and liberal depreciation allowances are offered. These incentives also include a tax allowance of 40% for new buildings and machinery, 20% for used buildings and machinery, and a 100% deduction for a manufacturing company's operating expenses for the first two years. Other incentives are: no import duty on heavy goods vehicles, raw materials for manufacturing, a maximum import tariff rate of 25%, no withholding tax on dividends, and tax holidays. Exporters do not have to pay the normal taxes or import duties. Repatriation of dividends and profits are freely permitted.

Encouraged by the formation of the Malawi Development Corp. and the implementation of a development plan, foreign investment increased in the mid-1960s. A sugar scheme on the lower Shire River was financed to a great extent by foreign investment, as were a distillery and a brewery. In 1987, Lever Brothers, Portland Cement, and David Whitehead and Sons had industrial plants in Malawi. The large plantation enterprises were originally established with capital largely from the United Kingdom. Exploration for oil under Lake Malawi began in 1999 but has not yielded any positive results so far.

Foreign direct investment (FDI) in Malawi was $22 million in 1997, but rose to $70 million in 1998. Annual FDI inflow averaged between $45 million and $60 million for the period 1999 to 2001.

ECONOMIC DEVELOPMENT

During the first decades of independence, agricultural development was emphasized. The government sought to implement this policy by providing the family farmer with basic agricultural support facilities, such as extension services, training, irrigation, and research, and by increasing the output of fertile areas through farm credit, marketing, and processing facilities. During this period, four major agricultural developments were sponsored: the Shire Valley Agricultural Development Project in the south; the Lilongwe Land Development Program and the Central Region Lakeshore Development Project, both in the Central Region; and the Karonga Rural Development Project in the north.

More recently, improvements in the transportation infrastructure, especially in roads, have been emphasized. In the manufacturing sector, the government has stressed diversification. With major constraints on its foreign exchange, Malawi aims to reduce the trade gap, encourage exports, and reduce government expenditures.

The United Kingdom has traditionally been Malawi's principal aid donor. South Africa has been a significant source of aid as well, especially in financing construction in the capital at Lilongwe and the railway extension from Lilongwe to Mchinji. Other significant aid donors have included the European Union, France, Canada, Germany, Japan, the United States, Denmark, the African Development Bank, and the World Bank/IDA. In 1998, Malawi started a six-month International Monetary Fund (IMF) macroeconomic program aimed at reigning in the almost 60% inflation rate, with little success as of 1999.

In 2000, Malawi was approved for $1 billion in debt service relief under the IMF/World Bank's Heavily Indebted Poor Countries (HIPC) initiative, to support poverty reduction efforts through expenditures on health, education, and rural development, among other areas. Also in 2000, Malawi negotiated a three-year $58 million Poverty Reduction and Growth Facility (PRGF) Arrangement with the IMF, which was to expire in December 2003. In September 2002, the IMF approved $23 million in emergency relief to support large imports of food due to shortages that year, and to fight malnutrition and starvation, particularly among those affected with HIV/AIDS. Recent government initiatives have targeted improvements in roads, and with participation from the private sector, improvements in railroads and telecommunications.

A new three-year PRGF was signed with the IMF, worth $56 million, which commenced in July 2005. The main aim of the new PRGF is to restore fiscal discipline, with the priority on reducing domestic debt. The signing of the new PRGF increased the probability that Malawi will reach completion point around mid-2006 under the IMF-World Bank heavily indebted poor countries (HIPC) debt relief initiative. Once this completion point is reached a reduction in debt stock will be awarded by the IMF-World Bank. However, as the Economist Intelligence Unit states, various criteria need to be achieved before this can occur. First, the government needs to have its first two PRGF reviews concluded successfully by the end of January 2006. Second, it needs to have achieved one year of successful implementation of the poverty reduction program, which could be met by the end of 2005. Third, it must complete 11 specific completion point triggers, which would take a minimum of one year. However, the most important thing is that donors have resumed financial assistance to Malawi following the recent IMF deal, with the UK Department of International Development the first to resume funding of £20 million ($37 million) for budgetary support.

SOCIAL DEVELOPMENT

Pensions systems exists for public employees only. Government hospitals and clinics provides some medical services free to residents. Employers are required to obtain private worker's injury insurance. Worker's compensation is provided for disability and survivor benefits.

The constitution specifies equal rights for women and minorities, but women face widespread discrimination in the home and in employment opportunities. Spousal abuse is common, and the authorities rarely intervene. Inheritance practices often leave widows without their share of the family's assets. Women are much more likely to be illiterate than their male counterparts. In 2004 the government addressed women's concerns, focusing on gender balance in political representation.

Some human rights abuses continued to occur under the democratic government. The use of excessive force and the mistreatment of prisoners is reported. Human rights organizations are free to operate openly and without restrictions.

HEALTH

Health services, which rank among the poorest in Africa, are under the jurisdiction and supervision of the Ministry of Health and are provided to Africans free of charge. Approximately 80% of the population had access to health care services. As of 2004, it was estimated that there were fewer than two physicians 100,000 people. In 2000, 57% of the population had access to safe drinking water and 77% had adequate sanitation. Access to safe water and sanitation at times has been severely impeded by war.

The major health threats are malnutrition, malaria, tuberculosis, measles, dysentery, and bilharzia. Hookworm and schistosomiasis are widespread. The HIV/AIDS prevalence was 14.20 per 100 adults in 2003. As of 2004, there were approximately 900,000 people living with HIV/AIDS in the country. There were an estimated 84,000 deaths from AIDS in 2003. Malawi has taken an aggressive approach to AIDS prevention and allocates a substantial portion of its health budget on treatment.

As of 2002, the crude birth rate and overall mortality rate were estimated at, respectively, 37.13 and 23.2 per 1,000 people. About 31% of married women were using contraceptives as of 2000. The infant mortality rate in 2005 was 96.14 per 1,000 live births. The major cause of infant death in Malawi is diarrheal disease. The maternal mortality rate was 580 per 100,000 live births. An estimated 48% of children under five years old were considered malnourished. Immunization rates for children up to one year old were: tuberculosis, 100%; diphtheria, pertussis, and tetanus, 95%; polio, 94%; and measles, 87%. Life expectancy was 41.43 years in 2005.

HOUSING

About 90% of the population live in rural areas. The traditional dwelling, used by anywhere from 45–65% of the total population, is a single-family home made of mud brick walls and a thatched roof. There are some more permanent structures, which are made with concrete, stone, or burnt brick walls and iron sheet, concrete, or asbestos roofs. Most dwellings have two or three rooms and the average household size is about 4.3 people. In 1998, at least 86% of dwellings were owner occupied. Only about 2.5% of residences had access to indoor piped water. Most drinking water was taken from boreholes, unprotected wells, and/or rivers and streams. About 74% of the population (both urban and rural) used pit latrines. About 22% had no toilets at all. Only 4.9% of the population had access to electricity. Wood is typically used for cooking fuel and paraffin is used for lighting.

Government-built houses are either rented or sold. The Malawi Housing Corp. has also developed housing plots in order to relocate urban squatters.

EDUCATION

Control of education, including mission schools, is in the hands of the Ministry of Education. Attendance is compulsory for eight years at the primary level. Secondary education lasts for four years. The academic year runs from September to July.

As of 1999, 69% of primary-school-age children were enrolled in school. Most children in remote rural areas do not attend school. In 2003, secondary school enrollment was about 29% of age-eligible students. It is estimated that about 71% of all students complete their primary education. The student-to-teacher ratio for primary school was at about 70:1 in 2003; the ratio for secondary school was about 46:1.

The University of Malawi, inaugurated at Zomba on 6 October 1965, has four constituent colleges at Zomba, Lilongwe, and Blantyre. A new medical school was established in Blantyre. In 2003, less than 1% of the tertiary age population were enrolled in some type of higher education program. The adult literacy rate for 2004 was estimated at about 64.1%, with 74.9% for men and 54% for women.

As of 2003, public expenditure on education was estimated at 6% of GDP, or 24.6% of total government expenditures.

LIBRARIES AND MUSEUMS

The Malawi National Library Service, founded in 1968, has more than 804,000 volumes and maintains a nationwide interloan system with headquarters in Lilongwe, regional branches in Blantyre, Mulanje, Luchenza, Mzuzu and Karonga, and a number of smaller rural libraries and library centers. The largest library is that of the University of Malawi (375,000 volumes). The US Information Agency maintains a small library in Lilongwe, and the British Council has libraries in Blantyre and in the capital. The National Archives are in Zomba and contain 40,000 volumes.

The Museum of Malawi (1959), in Blantyre, has a collection displaying the nation's archaeology, history, and ethnography. The Cultural & Museum Center Karonga serves as a museum of natural history, including dinosaur fossils and other prehistoric remains. Other museums include the Lake Malawi Museum in Mangochi and a regional museum in Mzuzu. There is also a postal museum in Namaka housed in a traditional postal carrier's rest hut.

MEDIA

In 2003, there were an estimated eight mainline telephones for every 1,000 people; about 17,400 people were on a waiting list for telephone service installation. The same year, there were approximately 13 mobile phones in use for every 1,000 people.

Radio broadcasting services were provided in English and Chichewa by the state-owned Malawi Broadcasting Corp. over two stations in 2004. The same year, there were 14 private FM stations with limited coverage, including 6 religious stations. State-owned Television Malawi was he only national television broadcaster. In 2003, there were an estimated 499 radios and 4 television sets for every 1,000 people. The same year, there were 1.5 personal computers for every 1,000 people and 3 of every 1,000 people had access to the Internet. There was one secure Internet server in the country in 2004.

The Daily Times, published in English in Blantyre, appears Monday through Friday and had a circulation of 22,000 in 2002. The other major daily publications were Computer Monitor, Michiru Sun, The Enquirer, and U.D.F. News (United Democratic Front). The Malawi News, a weekly, had a circulation of 30,000. Other weeklies include The Independent, The Nation, and The New Express.

Though previously strictly controlled by the government, the media enjoy new constitutional provisions suspending censorship powers. The government is said to respect these new provisions.

ORGANIZATIONS

The Malawi Chamber of Commerce and Industry has its headquarters at Blantyre. A branch of the British Medical Association has been organized in Zomba. In the larger towns, musical societies and theater clubs have been established.

The League of Malawi Women and the League of Malawi Youth are active. Other national youth organizations include the Catholic Students Community of Malawi, Malawi Young Pioneers, Student Alliance for Rural Development, and the Student Christian Organization of Malawi. A variety of sports associations are also active.

Service clubs include the Rotary, Lions Clubs, and the British Empire Service League. Some social welfare and economic development groups have organized under the umbrella of the Council for Nongovernmental Organizations in Malawi, established in 1985. International organizations with active chapters include the Salvation Army, Habitat for Humanity, UNICEF, and the Red Cross.

TOURISM, TRAVEL, AND RECREATION

Tourist facilities are improving with the development of Malawi. The major cities and resorts are not as limited as the smaller, rural areas. The main tourist attraction in Malawi is Lake Malawi; the visitor is well served there by hotels and recreational facilities. There are also eight-day excursions around the lake available. Game parks, Mt. Mulanje, and Mt. Zomba also attract the tourist trade.

In 2003, there were 420,911 tourists who arrived in Malawi, almost 21% of whom came from Mozambique. Tourist receipts totaled $43 million that year. Hotel rooms numbered 59,396 with 63,585 beds and an occupancy rate of 27% in 2002. The average length of stay was eight nights. A passport, proof of sufficient funds, and onward/return ticket are required for entry into Malawi. Upon entry, a 30-day visa is issued. Proof of vaccination against yellow fever is required for travelers from infected areas.

In 2004, the US Department of State estimated the daily cost of staying in Mangochi at $224; in Lilongwe, $180; and in Blantyre, $167.

FAMOUS MALAWIANS

The dominant historic political figure is Dr. Hastings Kamuzu Banda (1906–1997). After a long period of medical practice in England, and a brief one in Ghana, he returned to Nyasaland in 1958 to lead the Malawi Congress Party. Following the declaration of a state of emergency, Banda was detained from March 1959 to April 1960. He became Malawi's first prime minister in 1963, and in 1966 he became Malawi's first president; he was named president for life in 1971 and ruled without interruption until ousted in a 1994 election mandated by constitutional reform. Bakili Muluzi (b.1943) was president from 1994–2004. Bingu wa Mutharika (b.1934) won a disputed election to become president in 2004.

DEPENDENCIES

Malawi has no territories or colonies.

BIBLIOGRAPHY

Decalo, Samuel. The Stable Minority: Civilian Rule in Africa, 1960–1990. Gainesville, Fla.: FAP Books, 1998.

Democracy and Political Change in Sub-Saharan Africa. New York: Routledge, 1995.

Else, David. Malawi, Mozambique, and Zambia. Oakland, Calif.: Lonely Planet, 1997.

Harmon, Daniel E. Southeast Africa: 1880 to the Present: Reclaiming a Region of Natural Wealth. Philadelphia, PA: Chelsea House Publishers, 2002.

Kalinga, Owen J. M. and Cynthia A. Crosby. Historical Dictionary of Malawi. 3rd ed. Lanham, Md.: Scarecrow Press, 2001.

McElrath, Karen (ed.). HIV and AIDS: A Global View. Westport, Conn.: Greenwood Press, 2002.

Spring, Anita. Agricultural Development and Gender Issues in Malawi. Lanham, Md.: University Press of America, Inc., 1995.

Zeilig, Leo and David Seddon. A Political and Economic Dictionary of Africa. Philadelphia: Routledge/Taylor and Francis, 2005.