A Dangerous Divide The State Of Inequality In Malawi

Author: Richard Mussa

Year: Unknown

Category: Corporate Reports

Abstract

Economic inequality has worsened significantly in Malawi in recent years. In 2004, the richest 10 percent of Malawians consumed 22 times more than the poorest 10 percent. By 2011 this had risen to see the richest 10 percent spending 34 times more than the poorest. Yet even this shocking statistic is likely to be a significant underestimate1. Anyone who has seen the many large mansions springing up on the edges of Lilongwe and Blantyre, and the plethora of new shopping malls being opened, knows that conspicuous consumption amongst the richest is dramatically growing. Malawi’s Gini coefficient, the key measure of inequality, also shows the extent to which robust economic growth is benefiting the rich whilst leaving the poor behind. In seven years of impressive growth, the Gini has leapt up from 0.39, on a par with Cameroon, to 0.45, on a par with the Democratic Republic of Congo2. This study modelled the link between inequality, growth and poverty in Malawi over the next five years. In 2015, 8 million people – 50 percent of the country’s population - live in poverty. Yet if inequality continues to rise as it has in recent years, by 2020 1.5 million more Malawians will be poor3. Even if inequality stays broadly at the level it is now, there will still be 400,000 additional people living in poverty in Malawi by 20204. Unless Malawi acts now to reduce inequality, even rapid economic growth will fail to reduce poverty in the country.

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