Measuring The Disparities In Sectoral Contribution To The Gdp Of Malawi

Abstract

Malawi’s is an agro-based economy as it heavily relies on agriculture for employment and foreign exchange generation. This dependence traces its origins from the time the country was under British Colonial rule which adopted an agriculture based economic model with estate farming and subsistence farming. Although a considerable period has passed since it gained independence in 1964, agriculture as a single sector continues to consistently dominate the economy of Malawi by contributing more to its GDP than other sectors. However, this paper shows that the share of agriculture is slowly reducing as that of services and industry is increasing but the disparity is still high.  Industry output has remained low since the trade liberalization under the Structural Adjustment Programme (SAPs). Other reasons for this disparity are Low levels of competitiveness, Limited investment in physical and human capital, and small and fragmented markets, there is lack of appropriate skills and uptake of technology, high costs of doing business and deficient support infrastructure, market access to export markets; barriers to MSME participation in manufacturing.