Malawi is an agricultural country and agriculture is the most important sector in its economy as it employs about 90 percent of the population. Agriculture contributes more than 35 percent of Gross Domestic Product and accounts for almost 85 percent of the country's export earnings. Thus in 1997 for example, export earnings came from tobacco (59 percent), tea (19 percent), groundnuts (2 percent) and other crops (12 percent). The country's agricultural production derives from the smallholder agriculture and estate farming.

The smallholder agriculture accounts for over 85 percent of production which meets the country's demand for food staples and provides some export surplus. However, the bulk of Malawi's agriculture exports come from tobacco, the main earner of foreign exchange and an engine of growth for the country's development. The estates contribute 12 percent of total agricultural production but account for nearly 70 percent of all agricultural exports.

It is estimated that the total land under cultivation in the smallholder agricultural sector is 1,374852 hectares with other 646,976 hectares of unused good arable land which still remains uncultivated.

Maize is the main food crop and is grown on 95 percent of the cultivated area. Other crops are tobacco, tea, cotton, sugarcane, tung, cashew nuts, groundnuts, rice, coffee, cassava, pulses and macadamia nuts. Tobacco is the dominant export earner, accounting for more than 70 percent of agricultural exports. The other main cash crops are tea which makes up 7.5 percent, sugar at 7.4 percent, coffee peaking at 4.1 percent and cotton at 0.5 percent. Most of these exports are raw agricultural products which are processed elsewhere. This sector offers some of the greatest investment opportunities, especially in developing related industries such as manufacturing plants for fertiliser and pesticides, and expanding cash crop production.

Malawi is trying to intensify the growing of whatever crop is possible to achieve self-sufficiency. There is a programme to improve livestock production for milk and meat. Many Malawians keep cattle, goats, sheep and pigs. Malawi produces beef, pork, mutton and lamb. There is room for further expansion in beef production, particularly as an option to diversify away from tobacco for the larger estates. Malawi has a reasonably sized dairy sector which produces almost 8 million litres of milk every year. The commercial production of poultry and eggs has increased significantly since the mid-1980s.

The indigenous cattle is hard and disease resistant but its yield of meat and milk is limited. But villagers are nevertheless encouraged to dip their cattle and vaccinate them against tick-borne diseases. There is a nation-wide milk and egg marketing programme.

Agricultural reform was a key element of the programme of Economic Structural Adjustment agreed with the World Bank and the International Monetary Fund in 1981 which aimed to remove government regulations biased in favour of estates at the expense of smallholder farmers, and to improve the efficiency of estate land use. Smallholders may now grow burley tobacco and market directly to the auction floors. The transfer of traditional smallholder land to the estate sector has been halted.

Following these changes, Malawi has become of the world's largest producers of burley tobacco and is the world leader in the production of flue-cured tobacco. These policy reforms were followed by an agricultural services project which is designed to improve smallholder incomes and food security by increasing production and diversifying the cash crops. Sugar in Malawi is produced by two companies, the Sugar Corporation of Malawi and Dwangwa Sugar Corporation. Sugar is now the country's third largest export crop and Malawi has preferential access for its sugar in the USA and EU markets. These are plans to expand annual production levels over the next few years. Tea is the other main cash crop with production at around 35 million kilogrammes a year. Tea has been a major crop in Malawi for more than 80 years and production is of a high quality. It is grown mainly in Thyolo and Mulanje districts, to the south of Lake Malawi and the annual harvests are sold at auction floors, either in Limbe or Thyolo.

Most smallholder crops are sold through the Agricultural Development and Marketing Corporation (ADMARC) which has more than 50 storage depots around the country. Since 1987, the private sector has been able to market most crops, with notable exceptions of tobacco and cotton and can bid for produce in direct competition with ADMARC.

FISHERIES
Fish make up around 70 percent of the total animal-based protein consumption in Malawi. The annual catch from Lake Malawi is around 70,000 tonnes. The industry employs either directly or indirectly nearly 250,000 people. The Department of Fisheries has initiated a number of projects to increase production on a sustainable basis after production fell by 25 percent during the 1990s and exports, hitherto dropping dramatically, were brought to a halt in 1992-93.

WATER
Water supply in Malawi is governed by the Water Resources Act, the Blantyre Water Works Act and the Lilongwe Water Works Act. Overall national water resources management is carried out by the Ministry of Water Development which is responsible for the provision of water services through 52 urban supply schemes and 50 rural gravity-led piped water schemes. Connections are carried out by the local water board in each particular area and any enquiries about water availability should be made at the pre=feasibility study stage to ensure supply is connected before construction begins.

Tap water is normally drinkable in main towns, although bottled water is sometimes advisable when travelling. Clear river and lake water should be boiled.

ELECTRICITY
Malawi has developed a number of hydroelectric schemes since independence. These have enhanced electricity generating capacity. The power station in Tedzani on the Shire River has a capacity of 40 megawatts. The Nkula Falls scheme, which opened in 1968, has been extended following the construction of the Nkula B power station which has five units of 20 megawatts each.

These three hydroelectric power stations have been constructed on the Shire River and another at Wovwe (capacity 45 megawatts). One is planned at Tedzani III (two 25 megawatts units). In total, the new station will add 160 megawatts by 1996 in the country's present capacity of 164 megawatts. Plans to link up to the Zambian and Cabora Bassa grid are underway. To finance the expansion in the electricity sector, tariffs have been raised considerably. One of the key challenges facing the Government at present is to complete the rural electrification programme. The project has been progressing extremely slowly and at present, only three percent of rural households have access to electricity.

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