The International Food Policy Research Institute (Ifpri) has warned that Malawi is likely to experience significant economic and social impacts due to El Niño and rising fertiliser costs. According to the institute, nearly 495,000 additional people may fall into poverty in 2027, adding to the 17.3 million Malawians already expected to live below the $3-a-day poverty line. This projection is based on the institute's analysis of the potential effects of El Niño on Malawi's economy and food security.
The Ifpri analysis also projects that maize imports may nearly triple under the average El Niño scenario. A 25 percent increase in regional maize prices could push the number of additional undernourished people to around five million. The institute's modelling estimates that the combined impact of El Niño and rising fertiliser costs could reduce Malawi's gross domestic product (GDP) by between one and seven percent, averaging 2.9 percent. This would have a significant impact on the country's economic growth and poverty reduction efforts.
The poverty projections come as Malawi targets lower-middle-income status by 2030, with economic growth averaging 2.2 percent against the 14 percent rate estimated as necessary to reach that target. The country's poverty rate is currently 75.4 percent under the revised $3 international poverty line, compared with 70.1 percent under the previous $2.15 threshold. Malawi has faced repeated climate shocks, including Cyclone Idai in 2019, Cyclone Ana and Tropical Storm Gombe in 2022, Cyclone Freddy in 2023, and El Niño-induced droughts in 2024.
A 2025/26 Unicef climate financing budget brief estimates that Malawi loses about 1.7 percent of GDP annually due to climate shocks, with losses projected at three to nine percent by 2030 and up to 16 percent by 2050. The country's economic growth is also affected by climate change, which is already impacting Malawi's economic growth through losses in output, infrastructure, and public finances. Minister of Natural Resources Patricia Wiskes highlighted the issue at the 5th African Regional Conference on Loss and Damage in Lilongwe.
Centre for Social Concern economic governance officer Agnes Nyirongo said that to reverse these trends, Malawi must urgently rethink its economic strategy, moving beyond subsidy programmes. She also emphasised the need to stabilise the macroeconomic environment. The Ifpri analysis also notes that domestic agricultural commodity prices may rise by 5.4 percent to 52.3 percent across the El Niño scenarios, driven by reduced agricultural production resulting from increased input prices and poor rainfall.
The institute's modelling estimates that the Iran war-related shocks alone would reduce Malawi's GDP by about 0.9 percent in 2027. Agricultural GDP losses would average 8.1 percent, ranging from 2.7 percent to 19.6 percent. Local fertiliser costs for the coming season are estimated at 61 percent above the pre-war baseline. These projections highlight the need for Malawi to develop strategies to mitigate the impacts of climate change and economic shocks.
The Malawian government and development partners must work together to address the country's vulnerability to climate shocks and economic instability. This may involve investing in climate-resilient agriculture, improving macroeconomic management, and implementing policies to support economic growth and poverty reduction. By taking proactive steps, Malawi can reduce its vulnerability to shocks and achieve its development goals.
Key points
- Nearly 500,000 Malawians may fall into poverty in 2027 due to El Niño and high fertiliser costs.
- Malawi's economic growth and poverty reduction efforts are likely to be significantly impacted by El Niño and rising fertiliser costs.
- The country must urgently rethink its economic strategy to address climate change and economic instability.
