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Human Development Index (HDI)
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0.512 (2021)
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Population
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20.4 million (2022), annual growth rate of 2.6 per cent
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Food systems
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Rain-fed agriculture, subsistence farming and food insecurity
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Energy systems
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Low electricity access (14.9 per cent overall, up to 54 per cent in urban areas), mainly from hydropower (69 per cent), which is at risk from natural disasters. Charcoal and wood used for heat and cooking.
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Water, sanitation and health
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Basic water delivery 70 per cent, sanitation access 27 per cent (2022)
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Water stress
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Freshwater withdrawal as a proportion of available freshwater resources: 17.5 per cent (2020)
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Water stressors and climate risks
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Pollution, deforestation, droughts and floods
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Export markets
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UK, EU, Russia, United Arab Emirates (UAE), Egypt, South Africa
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Exports
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Unprocessed agricultural products (tobacco, coffee, tea), minerals
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Source: Compiled by the authors, see footnotes for specific references.
Infrastructure development – from transportation to energy – is an important national priority. Households rely on charcoal and firewood for cooking and heating, which is a major factor driving deforestation. Such deforestation negatively impacts water resources, resulting in intensified flooding, landslides, lower hydropower productivity, and lower soil fertility and water retention for farmers, thereby increasing food insecurity. The government aims to tackle deforestation with amendments to the Forestry Act, which require forest management plans and licences for charcoal as well as the prosecution of cases of illegal deforestation, supported by international partners including the UK.
Droughts and floods are a further challenge that worsen critical issues. Major floods have killed hundreds and destroyed livelihoods, leading to displacement, sanitation problems and energy outages. Floods and droughts are the main cause of chronic food insecurity issues in Malawi, which will worsen with climate change if rainy seasons grow shorter and maize cultivation fails. Irregular and extreme weather is causing GDP losses of 1 per cent every year, posing a serious problem for Malawi’s export-oriented agricultural industry.
Agriculture
While agricultural products, such as tobacco, make up 60 per cent of Malawi’s export earnings, these industries have put a strain on the country’s water systems. A typical cigarette’s water footprint is around 3.7 litres, a large proportion of this amount is from the tobacco cultivation and curing processes. Tobacco drives deforestation through land cleared for crops and wood used as fuel to cure tobacco. Furthermore, pollution from pesticides used on these crops causes direct harms to humans and ecosystems.
Improving the sustainability of the tobacco industry is difficult because of its uneven power relations. This factor has traditionally allowed buyers to set low prices (as little as $0.50 per kilogram). Although it is difficult to find consistent data on tobacco pricing, one analysis notes that Malawi’s average tobacco auction price tends to be lower than the global price due to national conditions including the monopolistic market structure. A 2014 study found that Alliance One International and Limbe Leaf Tobacco Company are major players in the Malawi market, British American Tobacco is a key customer for both companies. British American Tobacco is estimated to control 90 per cent of Malawi’s tobacco market. Most farmers (around 80 per cent) contract directly with leaf-buying companies, which strengthens the control of large companies and their oversight of supply chains. However, legislation in importing countries relating to practices in the locations of production has been deployed in the case of tobacco, affecting market access. In 2019, US Customs and Border Protection suspended Malawian tobacco imports, ‘based on information collected by the agency that reasonably indicates the tobacco from Malawi is produced using forced labor and forced child labor’.
Tea and cocoa are also important exports, but supply chains are also buyer-driven, making it difficult for smaller producers to raise their prices. Other important sources for agricultural diversification of exports include beans, groundnuts and macadamia nuts. Some macadamia plantations in Malawi require the construction of further water infrastructure that may conflict with local water needs, although such plantations are less water-intensive than tobacco.
Mining
The government has also announced its plans to expand the extractive industries sector, which currently makes up around 1 per cent of GDP and includes phosphate, uranium, iron and precious stones, with explorations for rare earth and niobium underway. Artisanal mining – mostly individuals mining without mechanization – is also present in Malawi, impacting water pollution and deforestation. However, its impacts are hard to quantify as it is informal and sometimes illegal. According to a 2016 investigation by Human Rights Watch, mining has a negative impact on water access and causes environmental harms for local communities, disproportionately impacting women. Human Rights Watch also notes that the three major companies operating in Malawi at the time (Paladin, Eland and Malcoal) did not disclose their environmental impacts. Companies are required by law to disclose environmental impacts. Since the HRW report was published, MEPA has taken over auditing such projects and is said to be increasing its capacity and scrutiny of projects.
Trade and virtual water
Malawi’s main exports are agricultural commodities, and in 2020 its top export markets were Belgium and the UK. International partners aim to promote trade for economic development in Malawi, such as the Fairtrade Foundation, but have faced implementation barriers and require support for capacity development, technical exchanges and traceability. Transparency is an especially important concern for Malawi, given issues with child labour in the supply chains of its main commodities.
The main exports to the UK from Malawi in 2022 were agricultural products including coffee, tea, cocoa, sugar, fruit and vegetables. As an LDC, Malawi has comprehensive preferences under the UK Developing Countries Trading Scheme (DCTS), which came into force in June 2023, meaning there are no import tariffs on Malawian goods entering the UK, except for weapons. Several major UK firms operate in Malawi, including in manufacturing, agriculture, agro-processing and mining.
Both the Malawian government and UK partners have highlighted the importance of attracting investment and diversifying exports to compete in regional and global markets. Under the DCTS, LDCs like Malawi retain comprehensive preferences for goods like cocoa and sugar, while other trading partners remain subject to tariffs. So far, public statements from Malawi’s minister of trade about the DCTS have been largely positive and the scheme is seen as an opportunity to facilitate trade linkages. Given that the DCTS does not have any specific sustainability provisions, it is unclear what increased Malawi–UK trade would mean for sustainable water use.
Potential policy impacts
Disclosures and due diligence
UK companies that do business in Malawi must comply with the Taskforce on Climate-related Financial Disclosures (TCFD) by documenting their sustainability objectives, progress and management approach. However, the level of detail in these records is insufficient to accurately capture the impacts of UK trade on water issues in Malawi. As the UK Sustainability Disclosure Requirements will only apply to UK investments and do not require detailed disclosure or auditing, they are unlikely to impact water issues in Malawi.
Supply chain governance
If further legislation emerges that includes due diligence and enforcement mechanisms, the UK Environment Act could drive more sustainable practices for imported commodities such as cocoa, coffee and tobacco. Improved legislation could compel UK-based importers of high-risk goods to perform enhanced due diligence, which could help reduce the overall pressure from deforestation on Malawi’s water systems and boost flood resilience. However, much will depend on the enforcement mechanisms – if it is not possible to hold companies that violate these standards to account, such policies will likely have lower or no impact.
Improved legislation could compel UK-based importers of high-risk goods to perform enhanced due diligence, which could help reduce the overall pressure from deforestation on Malawi’s water systems and boost flood resilience.
The case of child labour and forced labour – still prevalent in Malawi according to UN human rights experts – is an illustrative case that could provide lessons on how to better influence environmental violations in the export sectors. If strengthened or more rigorously enforced, the UK’s Modern Slavery Act could provide a backstop to prevent labour violations in value chains for imported products. The UK government could monitor modern slavery statements and apply for injunctions if companies do not disclose potential hazards when doing business in higher-risk contexts like Malawi. Coordination of labour and sustainability standards would be crucial. Further legislation could mandate more detailed reporting on specific due diligence measures around material environmental risks and ensure third-party auditing.
Challenges associated with UK trade and policies
If policies increase certification requirements and international standards, smaller businesses in Malawi may struggle to comply with the additional red tape. In the past, increased costs associated with stricter standards have presented barriers to participation in voluntary initiatives like Fairtrade. Public bodies such as MEPA may also face resource challenges to enforce additional standards. To counter this, the UK government could support capacity-building measures and increase engagement in development assistance for water sustainability. The UK could scale up and expand existing engagement in energy access and deforestation prevention programmes, as well as initiatives like Water Tracker that support water management planning.
