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

cg.authorship.typesCGIAR and developing country institute
cg.authorship.typesCGIAR single centre
cg.contributor.affiliationInternational Food Policy Research Institute
cg.contributor.affiliationNational Planning Commission, Malawi
cg.contributor.donorEmbassy of Ireland
cg.contributor.donorGovernment of Flanders
cg.contributor.donorForeign, Commonwealth and Development Office, United Kingdom
cg.contributor.donorCGIAR Trust Fund
cg.contributor.programAcceleratorPolicy Innovations
cg.coverage.countryMalawi
cg.coverage.iso3166-alpha2MW
cg.coverage.regionAfrica
cg.coverage.regionEastern Africa
cg.coverage.regionSub-Saharan Africa
cg.creator.identifierJoachim De Weerdt: 0000-0002-5572-3332
cg.creator.identifierJan Duchoslav: 0000-0001-5745-4183
cg.creator.identifierKarl Pauw: 0000-0002-5104-173X
cg.creator.identifierJames Thurlow: 0000-0003-3414-374X
cg.creator.identifierLara Cockx: 0000-0002-7708-2791
cg.howPublishedGrey Literature
cg.identifier.projectIFPRI - Development Strategies and Governance Unit
cg.identifier.projectIFPRI - Foresight and Policy Modeling Unit
cg.identifier.projectIFPRI - Malawi Strategy Support Program
cg.identifier.publicationRankNot ranked
cg.number53
cg.placeLilongwe, Malawi
cg.reviewStatusInternal Review
cg.subject.impactAreaPoverty reduction, livelihoods and jobs
cg.subject.impactAreaNutrition, health and food security
dc.contributor.authorCockx, Lara
dc.contributor.authorDe Weerdt, Joachim
dc.contributor.authorDuchoslav, Jan
dc.contributor.authorJamali, Andrew
dc.contributor.authorNagoli, Joseph
dc.contributor.authorPauw, Karl
dc.contributor.authorThurlow, James
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 As of April 2025, the available information suggests that funding for many of these programs in Malawi has been withdrawn, resulting in an estimated decline in US foreign assistance to Malawi of around 59% for 2025.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 Access
dcterms.audiencePolicy Makers
dcterms.audienceDevelopment Practitioners
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.
dcterms.isPartOfMaSSP Policy Noteen
dcterms.issued2025-04-15
dcterms.languageen
dcterms.licenseCC-BY-4.0
dcterms.publisherInternational Food Policy Research Institute
dcterms.subjectwelfareen
dcterms.subjectaid programmesen
dcterms.subjecteconomic situationen
dcterms.subjectagricultureen
dcterms.subjectshocken
dcterms.subjectdevelopment aiden
dcterms.typeBrief

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