9.1 ASPIRATIONS FOR A FAIR AND EQUITABLE DISTRIBUTION OF INCOME

Malawians aspire to have a fair and equitable distribution of income and wealth. To this effect, they endeavour to reduce disparities in access to land, education, employment and business opportunities between urban and rural people, men and women, people with and without disabilities.

9.2 Strategic Challenges and Options

Incomes in Malawi are very low and unevenly distributed in comparison to other African countries. Trends in income indicate a worsening of income distribution in the country. The Gini coefficient, a measure of income inequality, has deteriorated from 0.45 in 1968 to 0.62 in 1995.

Strategic challenges for a fair and equitable distribution of income include: reducing unemployment; promoting enterprise development; improving productivity of smallholder farmers; addressing tenancy issues; continuing with the liberalization of markets of agricultural produce; improving access to land by the landless; reducing gender inequality; addressing disability issues; and allocating social expenditures equitably between rural and urban areas.

9.2.1 Reducing Unemployment

9.2.1.1 Strategic Challenge
According to the National Statistical Office only 12 percent of the labour force were in formal employment in 1995. These figures include employment in agricultural estates. Thus the majority of Malawians are employed in the smallholder agriculture sector. Low returns in this sector have led to underemployment.

The challenge is for the economy to generate jobs to absorb the unemployed.

9.2.1.2 Strategic Options
Strategic options for reducing unemployment include:

1. creating a conducive climate to attract private investment in labour intensive technology industries;
2. encouraging increased commercial farming to enhance employment in agriculture;
3. encouraging growth of small-scale enterprises such as food processing;
4. promoting cooperatives and business training; and
5. creating a data bank on strategic industries, which have a broader multiplier effect in employment.

Entrepreneurial training facilities are inadequate and demand for credit far outstrips supply. This leads to the marginalisation of certain sections or groups in society

9.2.2. 1 Strategic Challenge
The strategic challenge for enterprise development is to promote micro, small and medium-scale enterprises (MSMEs) to boost economic growth and create employment.

9.2.2.2 Strategic Options
Strategic options to enterprise development include:

1. strengthening existing training institutions and creating more where necessary;
2. encouraging lending institutions to have fair and transparent criteria for issuing loans.

9.2.3.1 Strategic Challenge
Most estates especially those growing tobacco use the (visiting) tenant system. Remuneration to tenants is generally low and their returns do fluctuate from year to year. Also in the event of crop failure or fall in prices, the uncompensated cost incurred during production is usually borne by the tenant.

The challenge is to ensure fair returns to those involved in production and marketing of tobacco.

9.3.2 Strategic options

Strategic options for addressing the tenancy issue include:

1. fixing prices to an agreed proportion of auction floor prices;
2. formalizing tenancy agreements through district commissioners;
3. encouraging tenants to form trade unions and associations;
4. increasing access to information regarding estates' financial position;
5. replacing tenancy system with a full share cropping system;
6. exploring and promoting more job creation programmes in order to abolish the tenancy arrangement.

9.2.4.1 Strategic Challenge
Over 80 percent of the total active population in the rural areas are smallholder farmers with very low levels of production. Most farmers are too poor to afford inputs such as hybrid seeds and fertilizer, and lack collateral as security for credit. There is also lack of sufficient extension advice extended to these farmers. These services tend to concentrate on modern farmers.

Given that 90 percent of the population resides in the rural areas, the challenge is how to raise incomes of smallholder farmers.

9.2.4.2 Strategic Options
Strategic options for improving smallholder agriculture include:

1. improving the supply and delivery of inputs, credit, technology and extension services by targeting poor farmers;
2. improving the link between researchers, extension workers and farmers with emphasis on the poor farmers;
3. encouraging and promoting mechanization of agriculture;
4.  increasing extension worker morale through higher wages, better living conditions and training;
5. empowering Chiefs to punish those who do not follow sound soil management practices; and
6. promoting the use of organic manure.

9.2.5.1 Strategic Challenges
Selling prices of most crops produced by smallholder farmers are very low. Although there have been some steps to liberalize the marketing system of agricultural produce, there remain some distortions in pricing and marketing of commodities such as maize and tobacco.

The strategic challenge is maintaining commodity prices in line with input prices and ensuring increased and evenly distributed private sector participation.

9.2.5.2 Strategic Options
Strategic options for improving marketing systems include:

1. improving the marketing of agricultural produce;
2. encouraging smallholder farmers to diversify to high value crops and livestock;
3. encouraging competition in the buying and selling of goods and services to discourage exploitation through monopoly practices;
4. encouraging farmers to form sellers cooperatives;
5. encouraging export promotion institutions to be more aggressive in identifying overseas markets.

9.2.6.1 Strategic Challenges
The results of the 1992/93 National Sample Survey of Agriculture (NSSA) show that the poorest and the most vulnerable households in Malawi are the landless who hold less than 0.5 hectare of land. The production levels of these poor households are extremely low.

The challenge is to improve access to land by the landless and to shift the landless from the high to the low population density areas.

9.2.6.2 Strategic Options
Strategic options for improving access to land include:

1. reviewing land rent to reflect real opportunity cost of land;
2. developing a land monitoring system to ensure maximum utilization of land;
3. redistributing unutilized land.

9.2.7.1 Strategic Challenges
In Malawi, gender inequalities are apparent in all spheres. Women have limited access and control to means of production such as land, credit and technology, and limited rights and control on their reproductive health.

There is a tendency to favour men over women in the provision of credit and extension services despite the fact that in Malawi women are key producers of food.

The challenge for reducing gender inequality is to mainstream gender issues in all aspects of development.

9.2.7.2 Strategic Options
Strategic options for reducing gender inequality include:

1. increasing women's access and control of land;
2. creating women farmers' clubs to facilitate access to inputs and credit;
3. removing any laws and customary practices that discriminate on the basis of gender;
4. increasing access to quality education and health services and expanding micro-credit schemes with more targeting on women and their groups;
5. facilitating women's access to employment and self employed income earning opportunities; and
6. encouraging women's participation in politics and decision-making.

9.2.8.1 Strategic Challenge
People with disabilities represent about 2.9 per cent of the total Malawi population. Of these 93 percent live in rural areas where their problems are further aggravated by lack of appropriate infrastructure to enable them access various social services in health, education and training.

The strategic challenge is to formulate a coherent national policy that clearly addresses issues concerning people with disabilities.

9.2.8.2 Strategic 0ptions
The strategic options for addressing disability issues include:

1. reviewing the institutional framework in order to meaningfully plan, coordinate and advocate issues affecting people with disabilities;
2. enacting a law that enshrines a Disabled Persons Equality Act (Services and Assistance to Disabled Persons) to ensure that people with disabilities have equal status and where necessary provide for affirmative action;
3. formulating a policy for the socioeconomic and political empowerment of people with disabilities; and
4. inculcating a sense of confidence and spirit of responsibility among people with disabilities.

9.2.9.1 Strategic Challenge
Social services are sparsely situated and are of poor quality especially in rural areas. Over half of Malawian households live 5 kilometers or more from a health centre. In education, although enrolment rates have improved significantly following the introduction of free primary school in 1994, other education Indicators are poor.

The strategic challenge for increasing social services is ensuring that health and education services are equitably distributed both in urban as well as in rural areas.

9.2.9.2 Strategic Options
The strategic options for increasing social services include:

1. increasing investments in health education and water;
2. allocating more resources to the rural areas;
3. promoting decentralization; and
4. controlling population growth.

9.2.10.1 Strategic Challenge
The challenge is to increase the quantity and quality of water, transport and housing infrastructure in rural areas.

9.2.10.2 Strategic Options
The following strategic options will increase the quantity and quality of water;

1. augmenting, rehabilitating and expanding of gravity-fed schemes;
2. rehabilitating boreholes and shallow wells, as well as the addition of new ones;
3. providing more water kiosks in urban slums;
4. constructing additional dams and reservoirs;
5. developing smallscale irrigation schemes;
6. establishing rural water fund to be directly financed by communities and non-governmental organizations.

9.2.11.1 Strategic Challenge
The challenge to be addressed in providing rural transport is promoting efficient and affordable rural transport.

9.2.11.2 Strategic Options
The strategic options to improving rural transport include:

1. constructing all-weather roads in rural areas;
2. expanding the labour intensive district roads improvement programme;
3. providing fiscal incentives to small and medium scale t transporters to operate in rural areas;
4. finding ways for lowering transport costs to enhance competitiveness, efficiency, and growth of the economy.

9.2.12.1 Strategic Challenge
The strategic challenge to improving housing is how to promote better and affordable housing for low-income segments of the population.

9.2.12.2 Strategic Options
The strategic options to improving housing for low-income people include:

1. embarking on a study of the housing sector, with a view to identifying constraints to the adequate provision of urban and rural housing;
2. examining ways to increase the scope for private participation in the sector;
3. supporting the community-based initiatives in waste removal and sanitation;
4. reviewing mortgage rates charged by financial institutions;
5. providing easy access to loans for building low cost houses;
6. reducing cost of building materials;
7. encouraging research in technologies that will use locally available building materials.