Malawi Govt in Wealth Creation Initiatives to Close the Rich-Poor Gap - Minister

11 December 2019

Minister of Information, Civic Education and Communications Technology Mark Botomani has said government is working on several wealth creation programmes to reducing inequality and poverty, and promoting equity.

Botomani, who is government spokesperson, said there are social protection programmes for the poor to narrow the gap between the haves and the better-off.

The minister cited Farm Input Subsidy Programme (Fisp) as one of the programmes aimed at ensuring food security.

"The economy has been stable for the past years. Inflation is at single digit. This means the country has created conducive environment for private sector growth which would translate into job creation," said Botomani.

He stressed that government is geared to stimulate inclusive growth and reduce the income gap between the rich and the poor.

Parliament's Budget and Finance Committee bemoaned the glaring income inequalities in Malawi, warning that the situation is a potential recipe for conflict between the rich and the poor if not managed properly.

Committee chairperson Sosten Gwengwe said: "Income inequality erodes social cohesion in society and this is a potential source of conflict between the haves and have nots [the rich and the poor] if not managed properly."

In Malawi, wealth inequality as measured by a generic measure called Gini-coefficient has worsened over the past years, according to recent studies. Gini-coefficient refers to the distribution of money across a nation, State or specific geographic region.

If a country has a Gini-coefficient of zero, it means that the country has perfect equality in terms of distribution of wealth among its citizens while the opposite holds true if a country's Gini-coefficient is positive one, meaning that the country has high inequality such that the national income is shared by only a few elites.

Data from National Statistical Office (NSO) shows that Malawi's Gini-coefficient has moved from 38 percent as established in the Integrated Household Survey (IHS3) conducted in 2010/11 to 41.4 percent based on the IHS4 conducted in 2016/17.

On the other hand, the World Bank puts Malawi's Gini-coefficient at 46.1 percent as of this year, signalling the continued widening of the gap between the rich and the poor.

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