Climate and disaster risk finance in Malawi: Stocktake report

This publication covers Malawi’s vulnerability to natural hazards and climate-related risks, with a particular focus on droughts and floods and their implications for the country’s economy and public finances. With nearly three quarters of the population living in hazard-prone areas and agriculture forming the backbone of the economy, climate shocks continue to threaten livelihoods, development gains and fiscal stability. The publication examines the current state of Malawi’s climate and disaster risk financing (CDRF) framework, highlighting both progress and persistent challenges in strengthening financial resilience.

It identifies key barriers to effective implementation, including limited domestic financial resources, low insurance penetration, gaps in financial protection mechanisms, and weak coordination across disaster risk management institutions. The analysis also explores the need for improved data collection, stronger early warning systems (EWSs), and enhanced technical capacity in risk and macroeconomic assessment. In addition, it considers the implications of Malawi’s high fiscal deficit and the growing financial pressures associated with recurrent disasters. The publication provides insights and recommendations to support policymakers, development partners and financial institutions in advancing more effective and inclusive climate and disaster risk financing strategies in Malawi.