[Malawi] World Bank economic analysis urges for more investments in nutrition for stronger human capital
Malawi’s high levels of stunting and under-nutrition have led to estimated losses of $597 million per year due to increased healthcare costs and lower labor productivity and will continue to lead to lower wages and lost economic output in the future, says a new edition of the World Bank Malawi Economic Monitor (MEM).
The 10th edition of the MEM, Strengthening Human Capital through Nutrition, observes how stunting bears a considerable ongoing consequence for children’s future development and health, with significant implications on economic and social development, including country-level economic losses from foregone income of up to 3 percent of GDP.
According to the MEM, it is crucial to interrupt the intergenerational transmission of stunting by prioritizing women’s health and nutrition. It is vital to reduce or eliminate early marriage, delay pregnancy among adolescents and ensure pregnant women have access to better nutrition and care throughout their pregnancy. The analysis further suggests that it is important to improve livelihoods and resilience to promote access to and consumption of diverse diets among young children, especially in the first 1000 days of life.
“Children born in Malawi today will on average be less than half as productive as they would have been with access to good health and quality education.” said Greg Toulmin, World Bank Country Manager for Malawi. “Investing in nutrition is an important part of a multisectoral approach to address this shortfall, and build Malawi’s human capital, so that the country can compete in the future, global economy.”
In monitoring recent economic developments, the MEM notes that with Malawi’s economic growth recovering and single digit inflation, the Government has an opportunity to rein in fiscal deficits and reduce domestic debt. Public domestic debt increased to 32.6% of GDP in 2019, up from 28.4% in 2018. Improving fiscal discipline is therefore necessary to sustain macro stability and to reduce domestic debt, thereby also reducing pressure on interest rates.
However, achieving the budgeted deficit of 2.5% for FY2019/20 will be a challenge, due to optimistic revenue projections for the budget, and it will call for carefully prioritizing expenditure over the fiscal year to avoid a sizeable fiscal deficit. If it can better control domestic debt levels, the Government could increasingly move towards creating the conditions for the private sector to increase investment, which can drive growth and job creation.
Policies could also be implemented to unlock the potential of the private sector in order to strengthen growth and diversification, and to create more productive jobs for Malawi's rapidly growing population.
The Malawi Economic Monitor provides a bi-annual analysis of economic and structural development issues in the country. Previous MEM editions published since 2015 include: Charting a New Course, Investing in Girls’ Education, Realizing Safety Nets’ Potential. Land for Inclusive Development, Harnessing the Urban Economy, Emerging Stronger, Absorbing Shocks, Building Resilience., Adjusting in Turbulent Times, and Managing Fiscal Pressures.