Government of Malawi

2020 Malawi Poverty Report

AUGUST 2021

NATIONAL STATISTICAL OFFICE

P.O. BOX 333
ZOMBA
For More Information, please contact:

The Commissioner of Statistics

National Statistical Office
Chimbiya Road,
P.O. Box 333,
Zomba. Malawi
Tel: +265 (0) 1 524 377/111
Fax: +265 (0) 1 525 130
E-mail: [email protected]
website: www.nsomalawi.mw
Preface

I am pleased to release the findings of the Malawi Poverty Estimates 2020.

The estimates have been generated from the results of the Fifth Integrated
Household Survey (IHS5) conducted by the National Statistical Office
(NSO) over a period of one year, from April 2019 to April 2020. The survey
is a multi-topic data collection instrument that is conducted once in every
three years and the main objective is to provide timely and reliable
information on welfare and socio-economic indicators. The indicators produced from the survey
are key to monitoring and evaluation of national and international development frameworks such
as Malawi 2063 and Sustainable Development Goals (SDGs).

The survey also collects comprehensive data on consumption patterns of households both in terms
of food and non-food items over a period of one year. This facilitates further analysis of the survey
data to produce poverty profile of the country. The poverty estimates generated from the profile
will enable the government and other stakeholders to formulate and implement appropriate micro
and macro-economic policies for the country’s development.

I would like to thank the Malawi Government and the World Bank for the financial and technical
support on the production of this report.

Mercy Kanyuka (Mrs.)

COMMISSIONER OF STATISTICS

i
Executive Summary

Poverty figures were computed using food, non-food and national poverty lines. The data used
came from Fifth Integrated Household Survey (IHS5-2019/2020).

 The proportion of population that was poor was 50.7 percent in 2019/2020 (IHS5). This was
slightly lower than 51.5 percent which was reported during 2016/2017 (IHS4).
 Analysis by place of residence shows that 56.6 percent of people from rural areas were poor
compared to 19.2 percent in urban areas in 2019/2020.
 At regional level, Central region had the highest proportion of population that was poor (55.8
percent) followed by Southern region (51.0 percent) and Northern region (32.9 percent) in
2019/2020.
 Overall, 20.5 percent proportion of the population lived in extreme poverty in 2019/2020
compared to 20.1 percent recorded in 2016/2017.
 The level of ultra-poverty in rural areas was 23.6 percent compared to 3.3 percent in urban
areas in 2019/2020.
 At regional level, Central region had the highest ultra-poverty rate (25.4 percent) followed
by Southern region (19.1 percent) and Northern region (8.6 percent).
 At national level, poor population had a consumption of 17.0 percent below the poverty line.
Poverty was deeper in rural areas at 19.3 percent compared to 4.4 percent in urban areas.
 Analysis by region shows that poverty was deeper in the Central region at 20.1 percent
compared to the Southern and Northern regions at 16.3 percent and 8.8 percent, respectively.
 At national level, the degree of inequality declined to 0.379 in 2019/2020 from 0.423 in
2016/2017.
 Analysis by place of residence indicates that inequality was higher in urban areas at 0.390
compared to 0.332 in rural areas in 2019/2020.
 Across regions, results indicate that inequality was higher in the Central region (0.384)
compared to followed by the Southern region (0.374) and Northern region (0352).

ii
Abbreviations

CAPI Computer Assisted Personal Interviews

COICOP Classification of Individual Consumption by Purpose
CPI Consumer Price Index
IHS4 Fourth Integrated Household Survey
IHS5 Fifth Integrated Household Survey
LSMS Living Standards Measurement Surveys
MFEPD Ministry of Finance, Economic Planning and Development
MGDS Malawi Growth and Development Strategy
MWK Malawi Kwacha
NSO National Statistical Office
SDGs Sustainable Development Goals
WB World Bank

iii
Table of Contents

Preface................................................................................................................................................ i
Executive Summary ..........................................................................................................................ii
Abbreviations ...................................................................................................................................iii
Table of Contents ............................................................................................................................. iv
List of Tables .................................................................................................................................... v
List of Figures .................................................................................................................................. vi
1. Introduction ............................................................................................................................... 1
2. Methodology.............................................................................................................................. 2
2.1. Welfare Indicator .............................................................................................................. 2
2.2. Consumption Aggregates .................................................................................................. 2
2.2.1. Food Component ......................................................................................................... 2
2.2.2. Nonfood Component ................................................................................................... 3
2.2.3. Durable Goods ............................................................................................................ 4
2.2.4. Rent for Housing ......................................................................................................... 5
2.3. Adjustment for Household Size and Composition............................................................ 5
2.4. Adjustment for Cost of Living Differences ...................................................................... 6
2.5. The Poverty Line............................................................................................................... 7
2.6. Poverty Measurements ...................................................................................................... 8
3. Results of the Poverty Analysis for Malawi derived from the IHS5 ......................................... 9
3.1. Poverty lines...................................................................................................................... 9
3.2. Poverty Measurement (Poverty Head Count Ratios) ........................................................ 9
3.2.1. Poverty Incidence (Poverty Head Count Ratio).......................................................... 9
3.2.2. Ultra-Poverty Incidence (Ultra-Poverty Head Count Ratio) .................................... 14
3.3. Income inequality in Malawi .......................................................................................... 17
3.3.1. Poverty Gap and Squared Poverty Gap Indices ........................................................ 17
3.3.2. Ultra-Poverty Gap and Squared Ultra-Poverty Gap Indices ..................................... 19
3.3.3. Lorenz Curve ............................................................................................................ 20
3.3.4. Gini Coefficient ........................................................................................................ 21
3.4. Per Capita Consumption ................................................................................................. 23
Appendix A ..................................................................................................................................... 25
Appendix B ..................................................................................................................................... 36
Authors ............................................................................................................................ 36
Reviewers ........................................................................................................................ 36
References/Bibliography................................................................................................. 37
iv
List of Tables

Table 3-1: Poverty Line in Malawi Kwacha per Person per Year, Malawi 2020 ............................. 9

Appendix Tables

Table-A 1: Poverty Incidence by Place of Residence, Region and District, Malawi 2020 ............ 25
Table-A 2: Ultra-Poverty Incidence by Place of Residence, Region and District, Malawi 2020 ... 26
Table-A 3: Poverty Incidence and Share of Population Distribution by Place of Residence, Region
and District, Malawi 2020............................................................................................................... 27
Table-A 4: Gini Coefficient by Place of Residence, Region and District, Malawi 2020 ............... 28
Table-A 5: Mean and Median Consumption per Person by Place of Residence, Region and
District, Malawi 2020 ..................................................................................................................... 29
Table-A 6: Mean and Median Consumption per Person by Rural Regions and Consumption
Quintiles, Malawi 2020 ................................................................................................................... 30
Table-A 7: Classification of Items by COICOP and the Repetitive Modules in IHS5
Questionnaire, Malawi 2020 ........................................................................................................... 31

v
List of Figures

Figure 3-1: Proportion of Poor Population (Poverty Head Count Ratio), Malawi 2020 ................ 10
Figure 3-2: Proportion of Poor Population (Poverty Head Count Ratio) by Place of Residence,
Malawi 2020 ................................................................................................................................... 10
Figure 3-3: Proportion of Poor Population (Poverty Head Count Ratio) by Region, Malawi 2020
......................................................................................................................................................... 11
Figure 3-4: Proportion of Poor Population (Poverty Head Count Ratio) by Rural Areas in the
Regions, Malawi 2020 .................................................................................................................... 11
Figure 3-5: Proportion of Poor Population (Poverty Head Count Ratio) by Districts, Malawi 2020
......................................................................................................................................................... 12
Figure 3-6: Proportion of Poor Population (Poverty Head Count Ratio) by Sex of Household
Head, Malawi 2020 ......................................................................................................................... 13
Figure 3-7: Proportion of Poor Population (Poverty Head Count Ratio) by Household Size,
Malawi 2020 ................................................................................................................................... 13
Figure 3-8: Proportion of Ultra-Poor Population (Ultra-Poverty Head Count Ratio), Malawi 2020
......................................................................................................................................................... 14
Figure 3-9: Proportion of Ultra-Poor Population (Ultra-Poverty Head Count Ratio) by Place of
Residence, Malawi 2020 ................................................................................................................. 14
Figure 3-10: Proportion of Ultra-Poor Population (Ultra-Poverty Head Count Ratio) by Region,
Malawi 2020 ................................................................................................................................... 15
Figure 3-11: Proportion of Ultra-Poor Population (Ultra-Poverty Head Count Ratio) by District,
Malawi 2020 ................................................................................................................................... 16
Figure 3-12: Proportion of Ultra-Poor Population (Ultra-Poverty Head Count Ratio) by Sex of
Household Head, Malawi 2020....................................................................................................... 16
Figure 3-13: Proportion of Ultra-Poor Population (Ultra-Poverty Head Count Ratio) by
Household Size, Malawi 2020 ........................................................................................................ 17
Figure 3-14: Poverty Gap Indices by Place of Residence and Region, Malawi 2020 .................... 18
Figure 3-15: Squared Poverty Gap by Place of Residence and Region, Malawi 2020 .................. 18
Figure 3-16: Ultra-Poverty Gap by Place of Residence and Region, Malawi 2020 ....................... 19
Figure 3-17: Squared Ultra Poverty Gap by Place of Residence and Region, Malawi 2020 ......... 20
Figure 3-18: Lorenz Curve: Rural and Urban Consumption by Population, Malawi 2020 ............ 21
Figure 3-19: Gini Coefficient at National Level, Malawi 2020...................................................... 22
Figure 3-20: Gini Coefficient by Place of Residence, Malawi 2020 .............................................. 22
Figure 3-21: Gini Coefficient by Region, Malawi 2020 ................................................................. 23
Figure 3-22: Mean Per Capita Consumption in Malawi Kwacha by Place of Residence and
Region, Malawi 2020 ...................................................................................................................... 24

vi
1. Introduction

The 2020 Malawi Poverty Estimates have been generated using socioeconomic data from the
Fifth Integrated Household Survey (IHS5) conducted by the National Statistical Office (NSO)
from April 2019 to April 2020. The survey is a multi-topic data collection instrument that is
conducted once in every three years.

The main objective of the survey is to provide timely and reliable information for generating the
country’s welfare and socio-economic indicators, which are key to monitoring and evaluation of
national and international development frameworks such as the Malawi Growth and Development
Strategy, Malawi 2063 and Sustainable Development Goals (SDG).

The survey collected comprehensive data on households’ consumption patterns of food and non-
food items over a period of one year. This has facilitated further analysis of the survey data to
produce poverty profile of the country.

There are two stages which are used in estimating poverty numbers in Malawi, the first stage
involves generating the per capita consumption that ranks all population accordingly, that is, from
the person with the lowest level of consumption to the person with the highest level of
consumption. The second stage involves generating an appropriate poverty threshold (poverty
line) to be compared against the per capita consumption in order to classify individuals as being
poor or non-poor.

The poverty line is defined as the monetary cost to a given person, of a reference level of welfare,
at a given place and time Ravallion (1998). For Malawi, the total poverty line comprises two
components: food and non-food. The food poverty line represents the cost of a food bundle that
provides the necessary energy requirements per person per day while the non-food poverty line
represents the cost of basic non-food needs.

The total poverty line is simply the sum of the food and non-food poverty lines. Individuals who
reside in households with consumption lower than the poverty line are then labelled “poor”.
Using the minimum food consumption as an additional measure, the “ultra-poor” can be identified
as households whose consumption per capita on food and non- food items is lower than the
minimum food consumption.

1
2. Methodology

2.1. Welfare Indicator

Previous poverty measurement studies have reached some consensus on the use of monetary values
as an indicator of welfare/living standard, and this approach is regularly employed for poverty
monitoring and analysis. Although the monetary indicator of welfare does not cover all aspects of
human well-being, it captures a central component of any assessment of living standards. In
developing countries such as Malawi, it is also a common practice to use consumption expenditure
as the preferred welfare indicator because it is likely to be a more accurate measure of living
standards than income. The following subsections describe the construction of aggregate
consumption expenditure by component: food, nonfood, durables, and rent expenditures.

2.2. Consumption Aggregates

2.2.1. Food Component

Measurement of food consumption is critical for poverty analysis as food is basic for human
survival and standard of living. The food module of IHS5 collects data on the food consumed in
the household over the past one-week recall period. More specifically, consumption information
was collected on 142 food items from the most knowledgeable member of the sampled household.
To make the data collection and analysis easier, these food items were organized into 11 categories:
cereals, grains, and cereals products; roots, tubers, and plantains; nuts and pulses; vegetables; meat,
fish, and animal products; fruits; cooked food from vendors; milk and milk products; sugar, fats,
and oil; beverages; and spices and miscellaneous.

During the construction of the food component of total consumption, several considerations and
adjustments were made. First, all major sources of food consumption were accounted for. These
included purchases, own-production, gifts, and other sources.

Second, the survey has focused on actual consumption of food items as opposed to total purchases
or total own-production. This distinction is important as not all purchased and/or own-produced
items get consumed over the same period by all households. Indeed, many farm households
cultivate crops not just for own consumption but for the market as well.

Third, to get aggregate food consumption, monetary values of both purchased and non-purchased
items were calculated. Because the survey collected information on both quantity and
expenditure on purchased food items, unit values were constructed by dividing expenditure with
quantity consumed. Consumed values, prices and quantities were winsorized at 5th and 95th
2
percentile to deal with exceptionally low or high levels. These unit values were then used to
calculate monetary values of non-purchased food items. However, adjustments must be made on
unit values as they reflect not only price differences between different items but could also capture
quality differences for the same item. This is particularly relevant if the item has many varieties
and the IHS survey instrument did not capture these varieties separately. To deal with quality
differences in unit values in IHS5, median unit values were calculated for each item at several
levels with both geographical and time dimensions. Geographical disaggregation includes
district, urban and rural areas, and national. In these disaggregations, the survey month and year
were taken into consideration. Thus, if a sampled household consumed a food item that was not
purchased, the median unit value from its district and matching survey time would be used to
value that consumption. If no other household consumed the same item in that district during the
same survey month, or if there were not enough observations to obtain a reliable unit value, the
median unit value from the immediate upper level (in this case urban or rural areas) during the
same survey month and year would be used to estimate the value of that consumption.

Finally, to reduce cognitive and informational burdens on surveyed households, respondents were
allowed to report their quantity consumption in nonstandard and local units such as heaps and
pails. These units were transformed into kilograms using new NSO conversion factors that were
collected from a supplementary survey. This standardization of consumption information was
necessary before unit values were calculated and expenditure on food was aggregated.

2.2.2. Nonfood Component

The nonfood consumption modules (Modules I–K) of IHS5 have detailed information on
household expenditure on various nondurable nonfood goods and services. We include household
expenditure on all nonfood items as described in the international standard for Classification of
Individual Consumption by Purpose (COICOP). Appendix A shows the COICOP classification of
items and the respective questions in the IHS5 questionnaire. Therefore, parts of the total nonfood
expenditure is made up of the value of expenditure on nonfood nondurable item groups such as
education; health services, including prescription and nonprescription drugs; housing utilities such
as water, electricity, gas, firewood, charcoal, and others; clothing and footwear; transport services
including operation cost of private vehicle/bicycle/motorbike, but not the actual purchase of these
durable items, and public transportation; communication services such as mobile phone services;
recreation and cultural services, except the purchase of durables such as televisions; hotel and
lodging; and miscellaneous goods and services such as personal care like soap and personal effects
such as umbrella. Expenditures on these goods and services were reported/collected in different

3
reference periods (past 7 days, 1 month, 3 months, and 12 months). For those items with a reference
period shorter than 12 months, the corresponding expenditure is annualized. The total annual
household expenditure on these goods and services is compiled to calculate the total expense on
nondurable nonfood items and matched with durable goods and rental/housing expense in the
corresponding COICOP code.

Some expenditures that are sporadic in nature such as wedding, funerals, and births are excluded
from consumption aggregate, which is intended to capture households’ regular expenditure, to
avoid overestimation of well-being. Remittance to others is excluded from consumption aggregate
as it does not imply welfare improving consumption. Expenditure to repair or upgrade dwelling
such as purchase materials and labor cost is also excluded from consumption as the housing/rental
expenditure, discussed below, captures the value gains from this repair/upgrade.

Finally, it is important to note that we rely on total expenditure values and that there is no unit
value data for nonfood goods and services. The diversity of nonfood items, both in quality and unit
price, makes it difficult to compute a standard price for these nonfood items. For instance, the type,
quality, and unit of measurement of prescription medicines are so diverse that it is not possible to
calculate their unit values.

2.2.3. Durable Goods

The ownership and utilization of durable goods is a crucial component of consumption aggregate
as these goods improve the well-being of households. However, these goods are often purchased
occasionally and used over extended periods. To properly account for the welfare of households,
it is important to impute the use value of (or utility derived from) these goods in each year of
service—not at the time of purchase. The utility derived from the use of these goods could be
imputed using the purchase value and the expected lifetime of the goods.

Estimation of the use value derived from these durable goods is based on the information collected
in the data and certain assumptions outlined below. The durable goods module (Module L) of IHS5
collects information on home appliances and other durables used by households to improve their
daily lives.2 The information collected about these items include their age, estimated current
value, and number of each item owned by the household. Using the information on current value,
age, and number of goods and the following three important assumptions, we estimate the use
value.3

First, the purchase of these durables is assumed to be uniformly distributed over time. This
assumption allows us to estimate the lifetime of each durable good, except car and motorcycle,

4
as twice the current age of the item. For car and motorcycle, ownership of which are recent
phenomenon in rural Malawi, the distribution is likely skewed and hence we calculate lifetime of
these two durables as three time their current age.4

Second, the remaining service years left for each durable good is calculated as its current age
minus the estimated lifetime of the good. For goods that are very old, the estimated remaining
service left might be negative. In such cases, the remaining service year is replaced by two years.
Finally, the ratio of the current value and the remaining lifetime of services is used to approximate
the annual use value of each durable good.

2.2.4. Rent for Housing

Like durable goods, only the service derived from dwellings, not the construction or repair
expenses, needs to be included in the consumption basket. The residence of a household could either
be owned by the household itself or rented from others. The rental expenditure on dwellings rented
from other owners could be a good estimate of the service value of housing if the rental market is
competitive. The IHS5 housing module (Module F) collected rental expense for households that
rent their residences from others. However, most households, especially in rural areas, own their
dwellings. For these households, self-reported rental values were collected. The self-reported rental
data might, however, be inaccurate. To improve the accuracy of self-reported rent, information on
actual rental expense is used.

To improve the accuracy of self-reported rental expenses (as well as actual rent), a hedonic
regression is estimated using logarithm of rent (for those who are renting) and a theoric hedonic
rental value is estimated for each household. The estimation takes into account types of dwelling
(number of rooms and type of wall, roof, and floor), services available in the dwelling (source of
drinking water, type of toilet, and availability of electricity in the home and in the village/town),
and region and survey time fixed effects (urban, region, district, and survey year and month fixed
effects). Based on the regression coefficients and the characteristics of the dwellings, the predicted
rental value of the dwelling is estimated 5 .These estimates are used to replace outliers in self-
reported rent data.

2.3. Adjustment for Household Size and Composition

The next step in the construction of the welfare indicator requires adjusting consumption to account
for household size and demographic composition of households to make welfare comparisons
across individuals, not across households. This involves converting the standard of living defined

5
at the household level to an indicator defined at the individual level. In this report, consumption
expenditure per capita is used as indicator of individual welfare.

2.4. Adjustment for Cost of Living Differences

For poverty analysis using household surveys, the nominal consumption must be adjusted for
temporal and spatial differences in cost of living observed within the survey period and across
survey locations. The temporal adjustment deals with differences in cost of living over time (April
2019 to April 2020). For example, MWK 1,000 in April 2019, or at the start of the fieldwork for
IHS5, may not be worth the same value in April 2020, or at the end of the fieldwork for the survey.
The spatial adjustment deals with differences in cost of living over locations. For example, MWK
1,000 in a rural district may not be worth the same in a large city such as Blantyre.

Because temporal price variations can differ significantly across areas, a temporal adjustment is
implemented by using a combination of the unit values of food items from IHS5 and NSO nonfood
CPI. These itemized unit values are combined with their respective average food budget shares in
the household survey to calculate the monthly food price index. The food price index is then
combined with the nonfood CPI to calculate the overall monthly price index. The food price index
is calculated using unit values from the household survey— consistent with the price adjustment
across surveys described earlier. At the end of this exercise, consumption in IHS5 is adjusted to
prices of April/May 2019.

In addition, adjustments were also made for spatial cost-of-living differences across regions. To
do this, a spatial Paasche price index is estimated. Similar to the temporal price adjustments above,
food prices come from unit values from IHS5, while the price data for nonfood items come from
NSO CPI. Following the source of the prices, the weights of the items in the price index come from
IHS5 for food items and the weights for nonfood items comes from the weight of nonfood CPI. The
food and nonfood price indexes are then combined using the average budget shares of the two
consumption aggregates at the regional level.

The base for spatial price index is All-Malawi for April/May 2019, which were the beginning months
of fieldwork for IHS5. Average national prices are compared with average regional prices for the
same period. By having the same reference period at the national and regional levels, the difference
in prices in this calculation is attributable only to spatial differences. Spatial and temporal
differences in prices are combined to form the final price index.

6
2.5. The Poverty Line

The cost-of-basic-needs approach is most commonly used to establish a poverty line. In this
approach, the cost of acquiring enough food for adequate nutrition—in the case of Malawi 2215
calories per person per day—is first estimated and then an allowance for the cost of other basic
needs is added (Haughton and Khandker 2009; Ravallion 1998). Therefore, the total poverty line is
the cost meeting basic nutritional needs (that is, food poverty line) and then allowance for other
basic needs (that is, the nonfood poverty line). If a person’s total expenditure is below the poverty
line, the person is considered poor. An individual with consumption below the food poverty line is
considered ultra-poor.

First, the caloric requirements had to be set. For Malawi, the caloric requirements were set to 2215
kcal to reflect actual intake of Sub-Saharan African countries. Once set the daily caloric
requirements, the cost per calorie for a reference population has to be identified. A set of calories
can be consumed through many different combinations of food. In order to price calories, a
reference population needs to be identified. Ideally, the reference population would be households
who are not extremely poor (thus resorting to eating extremely cheap foods) nor wealthy
(consuming very expensive calories). The reference population was chosen to be the population in
the 5th and 6th deciles of the consumption aggregate distribution. In fact, these are households that
are close to/near the poverty line itself.

Then, the food poverty line is calculated as the price per calorie multiplied by the per capita daily
caloric requirement (2215 kcal). This food poverty line is also the ultra-poverty line. The ultra-poor
are those households whose total per capita expenditure levels are below the food poverty line.

Finally, the food poverty line is expanded using Ravaillon & Bidani’s (1994) estimation of the
Orshansky coefficient to obtain the poverty line. In this approach, the nonfood allowance was
estimated as the average nonfood consumption of the population whose food consumption is close
to the food poverty line. Once the poverty line is established, all households can be categorized as poor
or non-poor depending on whether their per capita expenditure (their welfare indicator adjusted for
household size) is below or above the poverty line. The poverty headcount, then, can be computed,
indicating the proportion of individuals living in poverty.

The poverty line is in essence absolute, and it also needs to be expressed in constant prices (that is,
real poverty line). In other words, the poverty line is absolute because it fixes the same standard of
living throughout Malawi—two persons with the same welfare level will be treated the same way

7
regardless of the location of their residence. Similarly, to ensure proper comparison of well- being
over time, the real poverty line is used.

2.6. Poverty Measurements

Poverty headcount ratios were generated using poverty measures proposed by Foster, Greer, and
Thorbecke (Foster et al., 1984). In addition to the poverty headcount index, the poverty gap and
severity indexes were also generated. This family of poverty indexes that were employed can be
summarized by the following equation:

𝑁
1 𝑧 − 𝑦𝑖 𝛼
𝑃𝛼 = ∑ ( ) ∗ 𝐼(𝑦𝑖 < 𝑧),
𝑁 𝑧
𝑖=1

where  is a nonnegative parameter that takes value 0, 1, or 2; 𝑧 is the poverty line; 𝑦𝑖 denotes
consumption of individual 𝑖; and 𝑁 is the total number of individuals in the population. 𝐼(𝑦𝑖 < 𝑧)
is an indicator function which is equal to 1 when individual 𝑖′s consumption is below the poverty
line and 0 when the consumption is above the poverty line.

The poverty headcount index ( = 0) is the percentage of population whose consumption is below
the poverty line. This simple and easy-to-interpret index is the most widely used poverty measure.
However, it has some limitations in that it does not capture how close/far the poor are from the
poverty line and the distribution of consumption among the poor. Two other poverty indices, the
poverty gap and poverty gap squared address these limitations. The poverty gap ( = 1), which
is the average consumption shortfall of the poor relative to the poverty line, addresses the first
limitation by accounting for extent of consumption shortfall. Finally, the poverty severity ( =
2), which is also called poverty gap squared, accounts for the inequality among the poor. For
instance, redistribution of consumption among the poor will not be captured by both poverty
headcount and poverty gap. However, such a transfer, for example, transfer from a poor person
to somebody less poor, increases poverty severity but might not affect headcount or poverty gap.
In the poverty severity index, larger poverty gaps carry higher weight (Haughton and Khandker,
2009).

8
3. Results of the Poverty Analysis for Malawi derived from the IHS5

3.1. Poverty lines

This section provides comparisons in food, non-food and national poverty lines computed for
IHS4 and IHS5. The population that had a total consumption below K165, 879 was deemed poor
in 2019/2020 as compared to K137, 428 in 2016/2017. As regards to ultra-poverty, the population
that had a total consumption below K101, 293 in 2019/2020 was considered to be ultra-poor in
the IHS5 while in 2016/2017, this was at K85, 260 (Table 3-1).

Table 3-1: Poverty Line in Malawi Kwacha per Person per Year, Malawi 2020

POVERTY LINE IHS4 IHS5

(2016/2017) (2019/2020)
Food 85,260 101,293
Non-Food 52,168 64,586
Total 137,428 165,879
Source: Malawi Poverty Report 2020

3.2. Poverty Measurement (Poverty Head Count Ratios)

This section looks at how poverty and ultra-poverty rates vary across different locations in
Malawi. The section further presents these results by comparing IHS5 and IHS4 results.

3.2.1. Poverty Incidence (Poverty Head Count Ratio)

The proportion of population that was poor reduced from 51.5 percent in 2016/2017 to 50.7
percent 2019/2020. This means that slightly over half of the population in Malawi lived in poverty
(Figure 3-1).

9
Figure 3-1: Proportion of Poor Population (Poverty Head Count Ratio), Malawi 2020

50.7 51.5

2019/2020 2016/2017

Source: Malawi Poverty Report 2020

Analysis by place of residence shows that 56.6 percent of people from rural areas were poor
compared to 19.2 percent in urban areas in 2019/2020. The proportion of population that was
poor in urban areas was higher in 2019/2020 at 19.2 percent than 17.7 percent in 2016/2017
(Figure 3-2).

Figure 3-2: Proportion of Poor Population (Poverty Head Count Ratio) by Place of
Residence, Malawi 2020

56.6
Rural
59.5

19.2
Urban
17.7

2019/2020 2016/2017

Source: Malawi Poverty Report 2020

At regional level, Central region had the highest proportion of population that was poor (55.8
percent) followed by Southern region (51.0 percent) and Northern region (32.9 percent) in
2019/2020. The proportion of population that was poor in Northern region declined from 49.5
percent in 2016/2017 to 32.9 percent in 2019/2020 while for Central region the proportion
increased from 47.5 percent in 2016/2017 to 55.8 percent in 2019/2020 (Figure 3-3).

10
Figure 3-3: Proportion of Poor Population (Poverty Head Count Ratio) by Region, Malawi
2020

32.9
Northern Region
49.5

55.8
Central Region
47.5

51.0
Southern Region
56.0

2019/2020 2016/2017

Source: Malawi Poverty Report 2020

The proportion of population that was poor in rural north decreased from 59.9 percent in
2016/2017 to 35.9 percent in 2019/2020, in rural centre, the proportion increased from 53.6
percent in 2016/2017 to 62.8 percent in 2019/2020 while in rural south the proportion decreased
from 56.7 percent in 2016/2017 to 65.2 percent in 2019/2020 (Figure 3-4).

Figure 3-4: Proportion of Poor Population (Poverty Head Count Ratio) by Rural Areas in
the Regions, Malawi 2020

65.2
62.8
59.9
56.7
53.6

35.9

Rural North Rural Centre Rural South

2019/2020 2016/2017

Source: Malawi Poverty Report 2020

11
As regards districts, Mchinji registered the highest poverty rate at 68.5 percent in 2019/2020
followed by Kasungu at 67.0 percent and Dowa at 65.1 percent. Mzuzu City registered the lowest
poverty rate at 11.5 percent followed by Zomba City at 13.5 percent and Blantyre City at 14.9
percent (Figure 3-5).

Figure 3-5: Proportion of Poor Population (Poverty Head Count Ratio) by Districts,
Malawi 2020
68.5
67.0
65.1
63.7

63.5
63.5

62.8
62.7
62.5
62.3
61.7
61.2
56.8
55.2
54.8
49.4
48.8
47.1
43.9
43.0
41.1
40.1
38.6
38.6
38.4
26.4
25.9
22.0
15.6
14.9
13.5
11.5
Dowa

Machinga

Chikwawa

Chitipa

Rumphi
Mchinji

Ntchisi
Balaka
Phalombe

Karonga
Neno

Mzimba
Mulanje

Mwanza
Blantyre
Nsanje

Salima

Ntcheu

Nkhotakota

Chiradzulu

Blantyre City
Likoma

Zomba City
Mzuzu City
Zomba Rural
Kasungu

Lilongwe City
Lilongwe Rural

Dedza

Thyolo
Mangochi

Nkhatabay

Source: Malawi Poverty Report 2020

Analysis by sex of household head shows that 56.8 percent of people in female-headed households
were poor in 2019/2020 compared to 48.5 percent in male-headed households. The proportion of
people that were poor in female-headed households decreased from 58.3 percent in 2016/2017 to
56.8 percent in 2019/2020 (Figure 3-6).

12
Figure 3-6: Proportion of Poor Population (Poverty Head Count Ratio) by Sex of
Household Head, Malawi 2020

56.8
Female
58.3

48.5
Male
49.3

2019/2020 2016/2017

Source: Malawi Poverty Report 2020

Analysis by household size shows that 60.6 percent of the people in households that had five or
more members were poor in 2019/2020 compared to 44.2 percent in households with four
members and 2.4 percent in households with just one member (Figure 3-7).

Figure 3-7: Proportion of Poor Population (Poverty Head Count Ratio) by Household
Size, Malawi 2020

Five + Members 60.6

Four Members 44.2

Three Members 30.7

Two Members 15.5

One Member 2.4

Source: Malawi Poverty Report 2020

13
3.2.2. Ultra-Poverty Incidence (Ultra-Poverty Head Count Ratio)

Overall, 20.5 percent of the population lived in extreme poverty in 2019/2020 compared to 20.1
percent in 2016/2017 (Figure 3-8).

Figure 3-8: Proportion of Ultra-Poor Population (Ultra-Poverty Head Count Ratio),

Malawi 2020

20.5 20.1

2019/2020 2016/2017

Source: Malawi Poverty Report 2020

The level of ultra-poverty in rural areas was 23.6 percent in 2019/2020 and 23.8 percent in
2016/2017. In urban areas, the level of ultra-poverty decreased from 4.1 percent in 2016/2017 to
3.3 percent in 2019/2020 (Figure 3-9).

Figure 3-9: Proportion of Ultra-Poor Population (Ultra-Poverty Head Count Ratio) by

Place of Residence, Malawi 2020

23.6
Rural
23.8

3.3
Urban
4.1

2019/2020 2016/2017

Source: Malawi Poverty Report 2020

14
At regional level, Central region had the highest ultra-poverty rate in 2019/2020 (25.4 percent)
followed by Southern region (19.1 percent) and Northern region (8.6 percent) (Figure 3-10).

Figure 3-10: Proportion of Ultra-Poor Population (Ultra-Poverty Head Count Ratio) by

Region, Malawi 2020

25.4

19.1

8.6

Northern Central Southern

Source: Malawi Poverty Report 2020

Analysis by district shows that Mchinji registered the highest ultra-poverty rate in 2019/2020 at
33.7 percent followed by Lilongwe Rural at 32.8 percent and Salima at 31.8 percent. Mzuzu City
and Nkhata Bay registered the lowest ultra-poverty rate at 0.4 percent each followed by Blantyre
City at 1.5 percent and Lilongwe City at 2.3 percent (Figure 3-11).

15
Figure 3-11: Proportion of Ultra-Poor Population (Ultra-Poverty Head Count Ratio) by
District, Malawi 2020
33.7
32.8
31.8
29.5
29.1
28.1
27.4
27.3
26.2
24.5
24.0
23.4
22.9
21.7
20.9
19.7
19.7
17.4
14.7
14.3
13.4
13.0
12.3
10.6
8.0
5.3
3.1
2.9
2.3
1.5
0.4
0.4
Chitipa
Chikwawa

Ntchisi
Dowa

Mzimba
Mchinji

Phalombe
Machinga

Mulanje

Nkhotakota
Nsanje

Ntcheu

Balaka

Mwanza

Karonga
Neno

Zomba City

Blantyre City
Rumphi

Mzuzu City
Salima

Dedza

Kasungu

Blantyre
Chiradzulu

Likoma
Zomba Rural

Lilongwe City
Lilongwe Rural

Thyolo
Mangochi

Nkhatabay
Source: Malawi Poverty Report 2020

Analysis by sex of household head shows that 25.3 percent of female-headed households were
ultra-poor in 2019/2020 compared to 21.5 percent in 2016/2017. As regards male-headed
households, 18.6 percent were ultra-poor in 2019/2020 compared to 16.8 percent in 2016/2017
(Figure 3-12).

Figure 3-12: Proportion of Ultra-Poor Population (Ultra-Poverty Head Count Ratio) by

Sex of Household Head, Malawi 2020

25.3

21.5
18.6
16.8

2019/2020 2016/2017

Male Female

Source: Malawi Poverty Report 2020

16
Analysis by household size shows that 26.7 percent of the people in households that had five or
more members were ultra-poor in 2019/2020 compared to 14.1 percent in households with four
members and 2.4 percent in households with two members (Figure 3-13).

Figure 3-13: Proportion of Ultra-Poor Population (Ultra-Poverty Head Count Ratio) by

Household Size, Malawi 2020

Five + Members 26.7

Four Members 14.1

Three Members 8.2

Two Members 2.4

One Member -

Source: Malawi Poverty Report 2020

3.3. Income inequality in Malawi

Poverty estimates that have been presented show the share of the population below the poverty
line. However these estimates fail to reveal any information about the distribution of income
above or below the threshold. Inequality measures, instead, reveal the inequality in the
distribution of income for the entire population.

This section presents measures of income inequalities such as poverty pap, squared poverty gap,
Lorenz curve and Gini coefficient.

3.3.1. Poverty Gap and Squared Poverty Gap Indices

Poverty measurement is not limited to headcount ratios, it is also very important to look into the
depth (poverty gap) and severity of poverty (squared poverty gap).

Poverty gap is the average consumption shortfall of the population relative to the poverty line.
Poverty gap index estimates the depth of poverty by considering how far, on the average, the poor
are from that poverty line.

Squared poverty gap, on the other hand, measures the severity of poverty and this is computed by
squaring the poverty gap index. This measure gives greater weight to individuals/households that
fall far below the poverty line than those that are closer to it.
17
At national level, poor population had a consumption of 17.0 percent below the poverty line in
2019/2020. Poverty was deeper in rural areas at 19.3 percent compared to 4.4 percent in urban
areas.

Analysis by region shows that poverty was deeper in the Central region at 20.1 percent compared
to the Southern and Central regions at 16.3 percent and 8.8 percent, respectively (Figure 3-14).

Figure 3-14: Poverty Gap Indices by Place of Residence and Region, Malawi 2020

Malawi 17.0

Rural 19.3

Urban 4.4

Northern 8.8

Central 20.1

Southern 16.3

Source: Malawi Poverty Report 2020

Overall, the squared poverty gap was 7.6 percent in 2019/2020. Poverty was severe in rural
areas at 8.7 percent compared to 1.5 percent in urban areas.

The severity of poverty was higher in the Central region at 9.4 percent compared to 7.0 percent
in the Southern region and 3.4 percent in the Northern region (Figure 3-15).

Figure 3-15: Squared Poverty Gap by Place of Residence and Region, Malawi 2020

Malawi 7.6

Rural 8.7

Urban 1.5

Northern 3.4

Central 9.4

Southern 7.0

Source: Malawi Poverty Report 2020

18
3.3.2. Ultra-Poverty Gap and Squared Ultra-Poverty Gap Indices

Ultra-poverty gap was at 4.8 percent below the ultra-poverty line in 2019/2020. Ultra-poverty
was deeper in rural areas at 5.6 percent compared to 0.5 percent in the urban areas.

Analysis by region shows that ultra-poverty was deeper in the Central region at 6.4 percent
compared to 4.2 percent in the Southern Region and 1.8 percent in the Northern region (Figure
3-16).

Figure 3-16: Ultra-Poverty Gap by Place of Residence and Region, Malawi 2020

Malawi 4.8

Rural 5.6

Urban 0.5

Northern 1.8

Central 6.4

Southern 4.2

Source: Malawi Poverty Report 2020

Overall, squared ultra-poverty gap was 1.7 percent in 2019/2020. Ultra-poverty was severe in
rural areas at 2.0 percent compared to 0.1 percent in urban areas.

The severity of ultra-poverty was high in the Central region at 2.3 percent compared to 1.4
percent in the Southern region and 0.6 percent in the Northern region (Figure 3-17).

19
Figure 3-17: Squared Ultra Poverty Gap by Place of Residence and Region, Malawi 2020

Malawi 1.7

Rural 2.0

Urban 0.1

Northern 0.6

Central 2.3

Southern 1.4

Source: Malawi Poverty Report 2020

3.3.3. Lorenz Curve

Lorenz curve is a graphical representation of the distribution of income (consumption per capita)
associated with a given share of the population. The diagonal line in the graph represents perfect
equality and it depicts any percentage of the population that would receive the same share in total
consumption. The red dashed line below the diagonal line shows how far the population at
national level is from perfect equality. The closer the curved line is to the diagonal line, the more
equal the distribution is.

The solid curved line (green) is somehow closer to the perfect equality relative to the dashed
(blue) curved line. This implies that the degree of inequality was high for urban population
compared to the rural population (Figure 3-18).

20
Figure 3-18: Lorenz Curve: Rural and Urban Consumption by Population, Malawi 2020

1.2
Cumulative proportion of expenditure

0.8

0.6

0.4

0.2

0
0 0.2 0.4 0.6 0.8 1 1.2
Cumulative proportion of population

Inequality National Rural Urban

Source: Malawi Poverty Report 2020

3.3.4. Gini Coefficient

Another measure of income inequality is the Gini coefficient. A Gini coefficient is a standard
measure of the amount of inequality and is based on the mathematical measure of the Lorenz
curve. The Gini coefficient is the area between the Lorenz curve that would exist in a perfect
equality and the Lorenz curve that does exist, divided by the area under the Lorenz curve that
would exist in a perfect equality. The coefficients are normalized to run from zero in a perfect
equality in income, to one, in a society where the richest person holds all the income.

Overall, the degree of inequality declined from 0.423 in 2016/2017 to 0.379 in 2019/2020 (Figure
3-19).

21
Figure 3-19: Gini Coefficient at National Level, Malawi 2020

0.423
0.379

2019/2020 2016/2017

Source: Malawi Poverty Report 2020

Analysis by place of residence indicates that the degree of inequality decreased from 0.499 in
2016/2017 to 0.390 in 2019/2020 in urban areas. As regards to rural areas, the degree of inequality
increased from 0.320 in 2016/2017 to 0.332 in 2019/2020 (Figure 3-20).

Figure 3-20: Gini Coefficient by Place of Residence, Malawi 2020

0.320
Rural
0.332

0.499
Urban
0.390

2016/2017 2019/2020

Source: Malawi Poverty Report 2020

Analysis by region indicates that inequality was higher in the Central region (0.384) in 2019/2020
followed by the Southern region (0.374) and Northern region (0.352) (Figure 3-21).

22
Figure 3-21: Gini Coefficient by Region, Malawi 2020

0.384 0.374
0.352

Northern Central Southern

Source: Malawi Poverty Report 2020

3.4. Per Capita Consumption

Market prices were used to record the value of all purchased items and the same prices were
used to impute values for all in-kind and gifts.

Average annual per capita consumption in Malawi was MK218, 222 suggesting that on average,
a Malawian consumed about MK598 per day in 2019/2020.

The mean annual per capita consumption for urban areas was higher at MK395, 706 compared
to MK185, 418 in rural areas suggesting that on average a person in urban areas consumed about
MK1, 084 per day while in rural areas consumed about MK508 per day.

Analysis by regions shows that the mean annual per capita consumption for the Northern region
was higher at MK269, 983 compared to that for Southern region and Central region at MK219,
106 and MK201, 719 respectively. This implies that the mean consumption per person per day
in the Northern region was MK739, MK600 in the Southern Region and MK553 in the Central
region (Figure 3-22).

23
Figure 3-22: Mean Per Capita Consumption in Malawi Kwacha by Place of Residence and
Region, Malawi 2020

Malawi 218,222

Rural 185,418

Urban 395,706

Northern 269,893

Central 201,719

Southern 219,106

Source: Malawi Poverty Report 2020

________________________________________
1 The list of items and their respective trimming threshold is available upon request.

2 The survey collects information on durable assets used for productive purposes. However, these goods are not
directly used to improve welfare and hence are not included in the consumption aggregate.

3 Due to lack of data on purchase value, the estimated current value is used for approximating the total value of
the durable goods.

4 The decision to use a different approach for car and motorcycle gives a more reasonable estimated lifetime: 11.8
years and 9.0 years, respectively. However, if we decide to adopt uniform distribution assumption, the estimated
lifetime for car and motorcycle becomes only 7.9 years and 6.0 years, respectively.

5 The predicted rent in logarithm is converted into normal scale.

24
Appendix A

Table-A 1: Poverty Incidence by Place of Residence, Region and District, Malawi 2020

IHS4 IHS5

95% Conf. Interval 95% Conf. Interval

Background Std.
Estimate Std. Err. Lower Upper Estimate Lower Upper
Characteristics Err.
Malawi 51.5 0.8 49.9 53.2 50.7 0.5 49.8 51.7
Rural 59.5 0.9 57.6 61.3 56.6 0.5 55.6 57.6
Urban 17.7 1.7 14.4 21.1 19.2 0.9 17.5 20.9
Region
Rural North 59.9 2.0 56.0 63.9 35.9 1.2 33.6 38.2
Rural Centre 53.6 1.5 50.6 56.5 62.8 0.8 61.1 64.4
Rural South 65.2 1.2 62.8 67.6 56.7 0.7 55.3 58.2
District
Chitipa 73.8 2.5 68.9 78.7 38.6 2.5 33.7 43.5
Karonga 57.1 4.9 47.6 66.7 41.1 2.5 36.1 46.0
Nkhatabay 57.7 4.7 48.4 67.0 22.0 2.3 17.5 26.4
Rumphi 53.6 4.2 45.4 61.7 26.4 2.4 21.6 31.1
Mzimba 42.9 5.7 31.7 54.2 38.6 2.7 33.3 43.9
Likoma 31.4 5.5 20.6 42.2 25.9 7.9 10.5 41.3
Mzuzu City 9.7 2.7 4.5 15.0 11.5 1.6 8.3 14.7
Kasungu 53.0 3.8 45.6 60.4 67.0 2.4 62.3 71.7
Nkhotakota 53.4 5.2 43.1 63.7 43.0 2.6 37.8 48.1
Ntchisi 53.5 5.0 43.7 63.2 55.2 2.7 49.9 60.5
Dowa 48.8 3.9 41.1 56.5 65.1 2.6 60.0 70.2
Salima 58.4 4.1 50.3 66.5 62.4 2.5 57.5 67.4
Lilongwe 47.9 3.9 40.3 55.6 63.5 2.0 59.5 67.4
Mchinji 50.5 4.7 41.3 59.8 68.5 2.5 63.6 73.3
Dedza 63.1 2.9 57.4 68.7 61.6 2.6 56.6 66.7
Ntcheu 54.1 4.4 45.5 62.7 56.8 2.6 51.6 62.0
Lilongwe City 18.0 2.7 12.6 23.4 15.6 1.6 12.6 18.7
Mangochi 59.5 4.8 50.0 68.9 63.5 2.5 58.7 68.4
Machinga 72.4 3.8 64.9 79.8 62.3 2.6 57.2 67.3
Zomba 55.9 3.3 49.5 62.4 48.8 2.7 43.5 54.0
Chiradzulu 66.4 3.5 59.6 73.2 38.4 2.6 33.3 43.4
Blantyre 38.9 3.5 32.1 45.7 43.9 2.6 38.8 49.0
Mwanza 53.6 4.6 44.5 62.6 47.0 2.8 41.6 52.5
Thyolo 67.3 3.7 60.0 74.6 49.4 2.6 44.4 54.4
Mulanje 69.2 3.7 62.0 76.4 54.8 2.6 49.7 59.9
Phalombe 83.2 2.5 78.2 88.1 63.7 2.6 58.7 68.8
Chikwawa 63.2 3.9 55.4 70.9 61.2 2.6 56.1 66.3
Nsanje 74.3 3.7 67.2 81.5 62.8 2.6 57.7 67.9
Balaka 61.3 4.3 52.8 69.8 62.7 2.5 57.8 67.7
Neno 46.9 3.6 39.8 53.9 40.1 2.7 34.7 45.4
Zomba City 15.8 2.5 10.8 20.8 13.5 1.9 9.8 17.1
Blantyre City 8.0 2.1 3.9 12.2 14.9 1.9 11.2 18.6
Source: Malawi Poverty Report 2020

25
Table-A 2: Ultra-Poverty Incidence by Place of Residence, Region and District, Malawi 2020

IHS4 IHS5
95% Confidence 95% Confidence
Interval Interval
Rural and Urban, Region Standard Standard
and District Estimate Error Lower Upper Estimate Error Lower Upper
Malawi 20.1 0.6 18.8 21.3 20.5 0.4 19.7 21.2
Rural 23.8 0.8 22.3 25.3 23.6 0.4 22.8 24.5
Urban 4.1 0.7 2.8 5.5 3.3 0.4 2.6 4.1
Rural North 23.2 1.6 20.1 26.2 9.8 0.7 8.4 11.2
Rural Centre 18.9 1.2 16.6 21.2 29.5 0.8 28.0 31.1
Rural South 28.8 1.1 26.6 31.0 22.0 0.6 20.8 23.2
Chitipa 33.8 3.1 27.7 40.0 14.3 1.8 10.8 17.8
Karonga 22.7 3.7 15.5 30.0 10.6 1.6 7.5 13.7
Nkhatabay 16.3 3.3 9.9 22.7 0.4 0.3 -0.3 1.0
Rumphi 17.3 3.4 10.6 24.0 2.9 0.9 1.1 4.7
Mzimba 16.8 3.5 10.0 23.7 12.3 1.8 8.7 15.9
Likoma 4.4 2.5 -0.5 9.2 5.3 4.0 -2.6 13.2
Mzuzu City 2.0 1.1 -0.1 4.1 0.4 0.3 -0.2 1.1
Kasungu 14.5 2.7 9.2 19.8 26.2 2.2 21.8 30.6
Nkhotakota 25.1 5.6 14.1 36.1 19.7 2.1 15.6 23.9
Ntchisi 22.8 5.4 12.2 33.4 20.9 2.2 16.5 25.2
Dowa 15.6 3.1 9.6 21.6 27.4 2.4 22.6 32.1
Salima 26.6 3.3 20.1 33.0 31.8 2.4 27.0 36.5
Lilongwe Rural 13.9 2.4 9.2 18.6 32.8 2.0 29.0 36.6
Mchinji 17.4 3.1 11.3 23.5 33.7 2.5 28.7 38.6
Dedza 25.6 3.6 18.5 32.7 29.1 2.4 24.3 33.9
Ntcheu 19.2 3.0 13.4 25.1 27.3 2.4 22.6 32.0
Lilongwe City 4.7 1.2 2.3 7.1 2.3 0.6 1.0 3.5
Mangochi 22.8 3.1 16.7 29.0 29.5 2.3 24.9 34.1
Machinga 28.5 3.1 22.4 34.6 24.0 2.3 19.5 28.5
Zomba Rural 19.3 2.9 13.6 25.0 17.4 2.0 13.5 21.4
Chiradzulu 28.0 3.4 21.2 34.8 13.0 1.8 9.5 16.5
Blantyre 11.5 2.5 6.7 16.4 13.4 1.8 9.9 16.9
Mwanza 16.0 3.1 9.9 22.0 19.7 2.2 15.3 24.1
Thyolo 29.3 4.7 20.2 38.4 14.7 1.8 11.2 18.3
Mulanje 35.8 4.6 26.8 44.8 21.7 2.2 17.5 25.9
Phalombe 50.6 3.2 44.2 56.9 24.5 2.3 20.0 29.0
Chikwawa 34.6 3.9 26.8 42.3 23.4 2.3 19.0 27.9
Nsanje 37.0 4.1 29.0 45.1 28.1 2.4 23.4 32.8
Balaka 21.5 2.8 16.0 27.1 22.9 2.2 18.6 27.2
Neno 16.6 2.6 11.5 21.7 8.0 1.5 5.0 11.0
Zomba City 3.9 1.5 1.0 6.8 3.1 1.0 1.3 5.0
Blantyre City 1.0 1.0 -0.9 2.9 1.5 0.6 0.2 2.8
Source: Malawi Poverty Report 2020

26
Table-A 3: Poverty Incidence and Share of Population Distribution by Place of Residence,
Region and District, Malawi 2020

Poverty Ultra-poverty Population Poor Ultra-poor

Rural and Urban, (% of
Region and District (% of population) population) (%) (%) (%)
Malawi 50.7 20.5 100 100 100
Urban 19.2 3.3 15.6 5.9 2.5
Rural 56.6 23.6 84.4 94.1 97.5
Northern Region 32.9 8.6 13.0 8.4 5.4
Central Region 55.8 25.4 42.9 47.2 53.3
Southern Region 51.0 19.1 44.1 44.4 41.3
Chitipa 38.6 14.3 1.3 1.0 0.9
Karonga 41.1 10.6 2.1 1.7 1.1
Nkhatabay 22.0 0.4 1.6 0.7 0.0
Rumphi 26.4 2.9 1.3 0.7 0.2
Mzimba 38.6 12.3 5.3 4.0 3.2
Likoma 25.9 5.3 0.1 0.0 0.0
Mzuzu City 11.5 0.4 1.3 0.3 0.0
Kasungu 67.0 26.2 4.8 6.3 6.2
Nkhotakota 43.0 19.7 2.2 1.9 2.2
Ntchisi 55.2 20.9 1.8 2.0 1.9
Dowa 65.1 27.4 4.4 5.7 5.9
Salima 62.5 31.8 2.7 3.4 4.3
Lilongwe Rural 63.5 32.8 9.3 11.7 14.9
Mchinji 68.5 33.7 3.4 4.6 5.6
Dedza 61.7 29.1 4.7 5.7 6.7
Ntcheu 56.8 27.3 3.8 4.2 5.0
Lilongwe City 15.6 2.3 5.7 1.8 0.6
Mangochi 63.5 29.5 6.6 8.3 9.5
Machinga 62.3 24.0 4.2 5.2 5.0
Zomba Rural 48.8 17.4 4.2 4.1 3.6
Chiradzulu 38.4 13.0 2.0 1.5 1.3
Blantyre 43.9 13.4 2.6 2.2 1.7
Mwanza 47.1 19.7 0.8 0.7 0.7
Thyolo 49.4 14.7 4.1 4.0 2.9
Mulanje 54.8 21.7 3.9 4.2 4.1
Phalombe 63.7 24.5 2.5 3.1 2.9
Chikwawa 61.2 23.4 3.2 3.9 3.7
Nsanje 62.8 28.1 1.7 2.1 2.3
Balaka 62.7 22.9 2.5 3.1 2.8
Neno 40.1 8.0 0.8 0.6 0.3
Zomba City 13.5 3.2 0.6 0.2 0.1
Blantyre City 14.9 1.5 4.5 1.3 0.3
Source: Malawi Poverty Report 2020

27
Table-A 4: Gini Coefficient by Place of Residence, Region and District, Malawi 2020

Background Characteristics GE(-1) GE(0) GE(1) GE(2) Gini

Malawi 0.265 0.237 0.277 0.561 0.379
Rural 0.202 0.181 0.198 0.281 0.332
Urban 0.291 0.253 0.296 0.642 0.390
Northern Region 0.227 0.205 0.237 0.413 0.352
Central Region 0.271 0.244 0.296 0.778 0.384
Southern Region 0.253 0.229 0.264 0.426 0.374
Chitipa 0.178 0.159 0.176 0.260 0.306
Karonga 0.180 0.169 0.186 0.249 0.324
Nkhatabay 0.129 0.121 0.127 0.156 0.275
Rumphi 0.180 0.170 0.201 0.339 0.320
Mzimba 0.203 0.179 0.189 0.245 0.329
Likoma 0.198 0.155 0.151 0.179 0.296
Mzuzu City 0.301 0.266 0.314 0.577 0.400
Kasungu 0.146 0.135 0.143 0.179 0.289
Nkhotakota 0.219 0.185 0.191 0.249 0.331
Ntchisi 0.151 0.138 0.143 0.170 0.292
Dowa 0.180 0.162 0.176 0.246 0.312
Salima 0.277 0.249 0.280 0.420 0.391
Lilongwe 0.206 0.193 0.220 0.331 0.345
Mchinji 0.183 0.163 0.169 0.207 0.318
Dedza 0.239 0.200 0.209 0.276 0.346
Ntcheu 0.188 0.165 0.169 0.202 0.318
Lilongwe City 0.279 0.253 0.330 0.988 0.388
Mangochi 0.200 0.178 0.193 0.265 0.329
Machinga 0.167 0.147 0.154 0.190 0.299
Zomba 0.208 0.189 0.209 0.290 0.339
Chiradzulu 0.210 0.185 0.204 0.305 0.332
Blantyre 0.258 0.237 0.283 0.507 0.379
Mwanza 0.206 0.197 0.233 0.371 0.348
Thyolo 0.155 0.140 0.146 0.180 0.292
Mulanje 0.185 0.168 0.179 0.231 0.322
Phalombe 0.183 0.174 0.212 0.375 0.321
Chikwawa 0.150 0.142 0.159 0.216 0.295
Nsanje 0.207 0.189 0.209 0.293 0.340
Balaka 0.205 0.194 0.223 0.325 0.347
Neno 0.172 0.165 0.193 0.283 0.317
Zomba City 0.311 0.252 0.257 0.334 0.390
Blantyre City 0.272 0.235 0.252 0.361 0.379
Source: Malawi Poverty Report 2020

28
Table-A 5: Mean and Median Consumption per Person by Place of Residence, Region and
District, Malawi 2020
Average Median
Background Characteristics
IHS4 IHS5 IHS4 IHS5
Malawi 226,172 218,222 149,320 163,778
Rural 167,986 185,418 134,100 151,157
Urban 473,402 395,706 261,697 296,627
Northern Region 200,630 269,893 154,205 211,506
Central Region 204,794 201,719 156,549 150,759
Southern Region 251,555 219,106 141,023 163,575
Chitipa 133,834 215,500 118,393 188,728
Karonga 169,793 231,352 141,908 191,024
Nkhatabay 175,355 285,487 139,770 251,921
Rumphi 187,258 282,220 145,781 239,045
Mzimba 196,245 237,055 164,591 196,131
Likoma 222,406 276,140 176,821 235,189
Mzuzu City 353,493 491,272 292,309 367,724
Kasungu 173,136 157,485 146,940 133,867
Nkhotakota 192,326 209,290 146,825 179,828
Ntchisi 177,626 180,638 144,318 153,326
Dowa 185,874 161,977 152,659 141,472
Salima 158,795 185,406 133,171 134,557
Lilongwe Rural 175,650 168,274 149,810 133,987
Mchinji 187,339 154,883 148,312 126,599
Dedza 166,301 173,683 124,892 142,232
Ntcheu 179,486 173,566 151,311 143,588
Lilongwe City 368,747 406,334 271,102 308,839
Mangochi 235,209 173,988 134,042 141,018
Machinga 134,103 169,759 115,929 145,925
Zomba Rural 165,756 211,528 141,136 170,233
Chiradzulu 143,908 231,906 124,404 187,551
Blantyre 202,545 241,456 173,425 178,098
Mwanza 186,710 208,466 146,151 172,135
Thyolo 153,412 198,982 123,871 167,540
Mulanje 155,750 188,657 113,507 151,433
Phalombe 112,483 173,324 94,245 146,375
Chikwawa 159,914 170,486 125,957 146,083
Nsanje 154,309 172,087 110,126 136,118
Balaka 168,752 183,361 132,531 138,360
Neno 185,567 222,941 154,209 184,123
Zomba City 421,789 446,577 286,159 322,709
Blantyre City 760,778 432,077 296,151 321,024
Source: Malawi Poverty Report 2020

29
Table-A 6: Mean and Median Consumption per Person by Rural Regions and Consumption
Quintiles, Malawi 2020
Average Median
Background Characteristics
IHS4 IHS5 IHS4 IHS5
Rural North 159,643 242,366 134,187 197,897
Rural Centre 171,945 166,751 143,152 137,568
Rural South 165,698 186,615 125,148 152,265
Consumption Quintiles
1st (Lowest) 71,007 76,823 73,728 79,445
2nd 109,873 121,091 109,800 120,955
3rd 150,136 165,025 149,324 163,778
4th 209,716 231,286 206,329 228,286
5th (Highest) 590,440 496,998 355,175 398,789
Source: Malawi Poverty Report 2020

30
Table-A 7: Classification of Items by COICOP and the Repetitive Modules in IHS5
Questionnaire, Malawi 2020
Module (M), question
(Q) and label/code
COICOP
Description
code (L): in this sequence
MQ-L
01 Food and nonalcoholic beverages
01.1 Food
Cereals, tubers, nuts, vegetables, fruits, oil, sugar, and so on G02-101 to G02-818
01.2 Nonalcoholic beverages
Tea; coffee; cocoa, Milo; squash; thobwa; fruit juice; freezes; soft G02-901 to G02-907,
drinks; bottled water; maheu; and other G02-909 to G02-G910,
G02-912, G02-916

02 Alcoholic beverages and tobacco

02.1 Alcoholic beverages
Bottled or canned beer, traditional beer (masese), wine or G02-G908, G02-G911,
commercial liquor, locally brewed liquor (kachasu), and chibuku G02-G913 to G02-
(commercial traditional-style beer) G915
02.2 Tobacco
Cigarettes or other tobacco I02-103

03 Clothing and footwear

03.1 Clothing
Infant clothing J02-301
Baby nappies/diapers J02-302
Boy's trousers J02-303
Boy's shirts J02-304
Boy's jackets J02-305
Boy's undergarments J02-306
Boy's other clothing J02-307
Men's trousers J02-308
Men's shirts J02-309
Men's jackets J02-310
Men's undergarments J02-311
Men's other clothing J02-312
Girl's blouse/shirt J02-313

31
 Module (M), question

COICOP Description (Q) and label/code

code
(L): in this sequence
MQ-L
Girl's dress/skirt J02-314
Girl's undergarments J02-315
Girl's other clothing J02-316
Lady's blouse/shirt J02-317
Chitenje cloth J02-318
Lady's dress/skirt J02-319
Lady's undergarments J02-320
Lady's other clothing J02-321
Cloth, thread, other sewing material J02-326
Laundry, dry cleaning, tailoring fees J02-327
03.2 Footwear
Boy's shoes J02-322
Men's shoes J02-323
Girl's shoes J02-324
Lady's shoes J02-325

04 Housing, water, electricity, gas and other fuels

04.1 Actual rents for housing
Actual rent payment F04
04.2 Imputed rents for housing
Estimated the rent for non-renters F03
04.4 Water supply
Water for cooking, bathing, and so on F37
04.5 Electricity, gas and other fuels
Value of the firewood used in the past week F18
Electricity F25
Charcoal I02-101
Paraffin or kerosene I02-102
Candles I02-104
Matches I02-105
Light bulbs I02-209
Solar panel L02-531
Generator L02-532

05 Furnishings, household equipment, and routine home maintenance

05.1 Furniture, furnishings, carpets, and other floor coverings
House decorations J02-338
Carpet, rugs, drapes, curtains K02-401
Mat - sleeping or for drying maize flour K02-403
Mosquito net K02-404
32
 Module (M), question

COICOP Description (Q) and label/code

code (L): in this sequence
MQ-L
Mattress K02-405
Bed L02-502
Table L02-503
Chair L02-504
05.2 Household textiles
Linen - towels, sheets, blankets K02-402
05.3 Household appliances
Repairs to household and personal items (radios, watches, and so I02-218
on)
Fan L02-505
Air conditioner L02-506
Sewing machine L02-511
Kerosene/paraffin stove L02-512
Electric or gas stove; hot plate L02-513
Refrigerator L02-514
Washing machine L02-515
05.4 Glassware, tableware, and household utensils
Bowls, glassware, plates, silverware, and so on J02-328
Cooking utensils (pots, stirring spoons, whisks, and so on) J02-329
05.5 Tools and equipment for home
Batteries I02-220
Recharging batteries of cell phones I02-221
Torch/flashlight J02-331
Paraffin lamp (hurricane or pressure) J02-333
Mortar/pestle (mtondo) L02-501
05.6 Goods and services for routine home maintenance
Milling fees, grain I02-201
Wages paid to servants I02-215
Cleaning utensils (brooms, brushes, and so on) J02-330

06 Health
06.1 Medical products, appliances, and equipment
Expenditure for nonprescription medicines (Panadol, Fansidar, D12
cough syrup, and so on)
06.2 Out-patient services
Expenditures for illnesses and injuries (medicine, tests, D10
consultation, and in-patient fees)
Expenditure not related to an illness (preventative health care, pre- D11
natal visits, check-ups)
Stay(s) at the traditional healer or faith healer D19
Stay(s) at the traditional healer or faith healer, transport costs D20

33
 Module (M), question

COICOP Description (Q) and label/code

code (L): in this sequence
MQ-L
Stay(s) at the traditional healer or faith healer, food costs D21
06.3 Hospital services
Hospitalization(s) or overnight stay(s) in a medical facility D14
Hospitalization(s) or overnight stay(s) in a medical facility, D15
transport costs
Hospitalization(s) or overnight stay(s) in a medical facility, food D16
costs

07 Transport
07.1 Purchase of vehicles
Bicycle L02-516
Motorcycle/scooter L02-517
Car L02-518
07.2 Operation of vehicles
Petrol or diesel I02-212
Motor vehicle service, repair, or parts I02-213
Bicycle service, repair, or parts I02-214
07.3 Transport services
Public transport - bicycle, taxi I02-107
Public transport - bus, minibus I02-108
Public transport - other I02-109

08 Communication
08.1 Postal services
Postage stamps or other postal fees I02-210
08.3 Telephone and fax services
Cell phone F35

09 Recreation and culture

09.1 Audio-visual, photographic and information processing equipment
Music or video cassette or CD J02-336
Film, film processing, camera K02-407
Radio (wireless) L02-507
Tape or CD player; HiFi L02-508
Television L02-509
VCR L02-510
Computer equipment and accessories L02-529
Satellite dish L02-530
09.2 Durables for recreation and culture, including repairs
Sports and hobby equipment, musical instruments, toys K02-406
09.3 Other recreational items and equipment, gardens and pets
34
 Module (M), question

COICOP Description (Q) and label/code

code (L): in this sequence
MQ-L
Expenditures on pets I02-219
09.4 Recreational and cultural services
Tickets for sports / entertainment events J02-337
09.5 Newspapers, books, stationery
Newspapers or magazines I02-106
Stationery items (not for school) J02-334
Books (not for school) J02-335

10 Education
10.1 Education, all levels
Tuition, including any extra tuition fees C22A
After school programs and tutoring C22B
School books and stationery C22C
School uniform and clothing C22D
Boarding school fees C22E
Contributions for school building or maintenance C22F
Transport C22G
Parent association and other school related fees C22H
Other school expenses C22I

11 Restaurants and hotels

11.1 Vendors, cafes, restaurants
Vendor consumption: maize (boiled or roasted), chips, cassava, G820-G830
eggs, chicken, meat, fish, mandazi, samosa, meals eaten at
restaurants, other
11.2 Accommodation services
Night's lodging in rest house or hotel J02-339

12 Miscellaneous goods and services

12.1 Personal care
Bar soap (body soap or clothes soap) I02-202
Clothes soap (powder) I02-203
Toothpaste, toothbrush I02-204
Toilet paper I02-205
Glycerine, Vaseline, skin creams I02-206
Other personal products (shampoo, razor blades, cosmetics, hair I02-207
products, and so on)
12.3 Personal effects
Umbrella J02-332

35
Appendix B

Authors

Bright Mvula Chief Statistician Economics

Twikaleghe Mwalwanda Statistician Economics
Imran Chiosa Statistician Economics
Samuel Chipokosa Statistician Economics

Reviewers

Mercy Kanyuka Commissioner of Statistics

Lizzie Chikoti Director of Agriculture and Economic Statistics

36
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