Economic and welfare implications of the reduction of US foreign assistance in Malawi

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cg.authorship.typesCGIAR and developing country instituteen
cg.authorship.typesCGIAR single centreen
cg.contributor.affiliationInternational Food Policy Research Instituteen
cg.contributor.affiliationNational Planning Commission, Malawien
cg.contributor.donorEmbassy of Irelanden
cg.contributor.donorGovernment of Flandersen
cg.contributor.donorForeign, Commonwealth and Development Office, United Kingdomen
cg.contributor.donorCGIAR Trust Funden
cg.contributor.programAcceleratorPolicy Innovationsen
cg.coverage.countryMalawien
cg.coverage.iso3166-alpha2MWen
cg.coverage.regionAfricaen
cg.coverage.regionEastern Africaen
cg.coverage.regionSub-Saharan Africaen
cg.creator.identifierJoachim De Weerdt: 0000-0002-5572-3332en
cg.creator.identifierJan Duchoslav: 0000-0001-5745-4183en
cg.creator.identifierKarl Pauw: 0000-0002-5104-173Xen
cg.creator.identifierJames Thurlow: 0000-0003-3414-374Xen
cg.creator.identifierLara Cockx: 0000-0002-7708-2791en
cg.howPublishedGrey Literatureen
cg.identifier.projectIFPRI - Development Strategies and Governance Uniten
cg.identifier.projectIFPRI - Foresight and Policy Modeling Uniten
cg.identifier.projectIFPRI - Malawi Strategy Support Programen
cg.identifier.publicationRankNot rankeden
cg.number53en
cg.placeLilongwe, Malawien
cg.reviewStatusInternal Reviewen
cg.subject.impactAreaPoverty reduction, livelihoods and jobsen
cg.subject.impactAreaNutrition, health and food securityen
dc.contributor.authorCockx, Laraen
dc.contributor.authorDe Weerdt, Joachimen
dc.contributor.authorDuchoslav, Janen
dc.contributor.authorJamali, Andrewen
dc.contributor.authorNagoli, Josephen
dc.contributor.authorPauw, Karlen
dc.contributor.authorThurlow, Jamesen
dc.date.accessioned2025-04-15T14:07:36Zen
dc.date.available2025-04-15T14:07:36Zen
dc.identifier.urihttps://hdl.handle.net/10568/174201
dc.titleEconomic and welfare implications of the reduction of US foreign assistance in Malawien
dcterms.abstractFor over a decade, the US has consistently ranked as either the largest or second-largest donor to Malawi. Annual foreign assistance disbursements have averaged over $360 million between 2020 and 2023. In January 2025 the US government suspended all US-funded foreign aid programs. As of April 2025, the available information suggests that funding for many of these programs in Malawi has been withdrawn, resulting in an estimated decline in US foreign assistance to Malawi of around 59% for 2025. As a result, Malawi faces a potential decline in foreign exchange inflows of around $177 million in 2025, a loss equivalent to approximately 6.3% of the annual merchandise import bill. With Malawi’s economy currently highly vulnerable, lacking the buffers needed to absorb shocks, the eco nomic and welfare implications of these recent events are concerning. The suspensions may lead to an economic contraction from reduced activities by US implementing partners, immediate pressure on the exchange rate (endangering the affordability or availability of critical imports) and declining productivity in key sectors such as agriculture. Deteriorating health and education outcomes could further affect the productivity of workers in the longer run. In this policy note we combine qualitative and quantitative information gathered in-country with modeled results of the possible economywide impacts of the reduction of US foreign assistance on key economic and welfare indicators over the next six years. We also discuss policy options that could help mitigate some of the adverse impacts.en
dcterms.accessRightsOpen Accessen
dcterms.audiencePolicy Makersen
dcterms.audienceDevelopment Practitionersen
dcterms.bibliographicCitationCockx, Lara; De Weerdt, Joachim; Duchoslav, Jan; Jamali, Andrew; Nagoli, Joseph; Pauw, Karl; and Thurlow, James. 2025. Economic and welfare implications of the reduction of US foreign assistance in Malawi. MaSSP Policy Note 53. Lilongwe, Malawi: International Food Policy Research Institute (IFPRI). https://hdl.handle.net/10568/174201en
dcterms.extent10 p.en
dcterms.isPartOfMaSSP Policy Noteen
dcterms.issued2025-04-15en
dcterms.languageenen
dcterms.licenseCC-BY-4.0en
dcterms.publisherInternational Food Policy Research Instituteen
dcterms.subjectwelfareen
dcterms.subjectaid programmesen
dcterms.subjecteconomic situationen
dcterms.subjectagricultureen
dcterms.subjectshocken
dcterms.subjectdevelopment aiden
dcterms.typeBriefen

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