Agriculture accounts for 30% of Malawi’s GDP and generates over 80% of national export earnings.

The agriculture sector employs 80% of the country’s workforce and contributes to food and nutrition security. Agriculture relies mainly on rain-fed crop production whereas production and consumption of animal products are very low. As a result, the country continuously faces food shortages at national and household levels.

Malawi is susceptible to adverse climate disaster risks which are exacerbated by climate change. These disasters include dry spells, seasonal droughts, excessive rainfall, river floods and flash floods (World Bank, 2021). It is reported that between the years 1979 and 2008, over 21.7 million people were affected adversely by these disasters while 2,596 lost their lives. Since Malawi is an agriculture-based economy, these disasters have also profoundly affected the country’s food security and Gross Domestic Product (GDP).

The following study examines the growing impact of climate induced disaster on the agriculture sector in Malawi and explores financial gaps that could feasibly be filled through climate risk insurance (CRI) solutions.

By shedding light on the intricate interplay between demand and supply, this study aims to inform the 'Climate Risk Insurance' Programming under UNCDF's ‘Climate Agenda’ about the state of climate and risk insurance in Malawi, with the ultimate goal of enhancing resilience and adaptation in the face of an increasingly uncertain climate future through targeted CRI instruments.