Read the source material carefully before answering Question 1. Source material: Changes in the Malawian economy Malawi fact file Population Percentage of population with access to electricity Deficit on the current account of the balance of payments 2022 22m 15% 12.9% of GDP Malawi is a low-income East African country. It is often affected by natural disasters including droughts, floods and storms. In January 2022, Malawi was hit by Storm Ana. This damaged agricultural crops, factories, forests and power stations. More than three-quarters of Malawi's labour force are employed in agriculture. Two of the country's main crops are tea and sugar. The quantity of tea offered for sale is affected by weather conditions, government subsidies and the price of fertilisers. The global market for sugar has been affected by health reports which identified the possible harmful effects of consuming too much sugar. Three of the priorities of the Malawian Government are to develop new industries, raise education standards and develop more sustainable sources of energy. The proportion of Malawian children who finish their primary education (5–11 years of age) is relatively low. Table 1.1 shows GDP per head and the percentage of children who complete primary education in selected countries in 2022. Table 1.1 GDP per head and the percentage of children who complete primary education in selected countries in 2022 Country GDP per head ($) Children who complete primary education (%) Malawi 650 35 Mauritania 2200 70 Namibia 4900 78 Senegal 1640 60 South Africa 7060 99 Uganda 890 22 Only a small proportion of Malawi's population has access to electricity. Most households rely on wood and charcoal for cooking and heating. Using wood as a fuel contributes to the destruction of the country's forests and reduces air quality. The country does, however, get 3000 hours of sunshine a year. This means it could develop solar energy. There would be an initial cost to install solar panels and to reduce the risk of storm damage. Solar energy plants (also known as solar farms) can take up a large area and create visual pollution. However, a successful solar energy industry could decrease Malawi's imports of fuel and might affect its exchange rate. Malawi's foreign exchange rate fell in 2022. The country's currency, the kwacha, bought fewer US dollars. This depreciation affected Malawi's current account of the balance of payment, its inflation rate and its economic growth rate. Some economists suggested that the Malawian Government should stop the kwacha falling further in value.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2025). The mark or mark type is shown in brackets.

1. [1] 3.3 m or 3 300 000.
2. [1] Factories
3. [1] power stations
4. [1] solar panels
5. [1] electricity
6. [1] fertilisers.
7. [1] It is likely to have shifted to the left / inside / inwards / contract (1).
8. [1] due to natural disasters / Storm (Ana) / resources destroyed / productive capacity (or land) reduced / less labour (1).
9. [1] good weather conditions (1) would increase crop yields / prevent crops being destroyed (1).
10. [1] government subsidies (1) provide a financial incentive / additional payment to that received from consumers / reduce costs of production (1).
11. [1] fall in price of fertiliser (1) which reduces cost of production / increase crop yields / allows farmers to purchase more fertiliser (1).
12. [1] fall in exchange rate (1) higher demand for Malawian tea (1).
13. [1] Axes correctly labelled – price and quantity or p and q (1).
14. [1] Original demand and supply curves correctly labelled (1).
15. [1] New labelled demand curve shifted to the left (1).
16. [1] Equilibriums – shown by lines P₁ and Q1 and P2 and Q2 or equilibrium points marked as E1 and E2 (1).
17. [1] Generally, a direct / positive relationship (1) the higher the GDP per head, the higher the percentage of children who complete primary education (1).
18. [1] Four countries with the highest GDP per head had the highest percentage of children who complete primary education / Malawi / Uganda have the lowest of both (1).
19. [1] South Africa had the highest GDP per head and the highest percentage of children who complete primary education (1).
20. [1] Comparison of two countries (e.g. Namibia and Senegal where GDP falls as does percentage of children completing primary education).
21. [1] Parents in countries with high incomes are more likely to be able to afford to keep their children in primary education (1).
22. [1] Government tax revenue is likely to be higher in countries with high incomes and so will be able to spend more on primary education (1).
23. [1] Completing primary education may increase the chance of skilled / occupationally mobile high income earning workers (1).
24. [1] Malawi / Uganda (1) Malawi has a lower GDP per head but a higher percentage of children who complete primary education than Uganda (1).
25. [1] A higher percentage of children may complete primary education but the quality of the education may be low leading to a low GDP per head / GDP per head may be high but there may be a high degree of inequality with a relatively high proportion of the population unable to keep their children in primary education (1).
26. [1] a sustainable source of energy (1) enables future generations to access energy (1)
27. [1] would create less pollution / external costs than burning wood and charcoal / improve air quality (1) reduce deforestation (1) improve health (1)
28. [1] may enable more Malawian households to gain access to electricity (1) increase living standards / reduce inequality (1)
29. [1] setting up solar panels creates jobs (1) leads to increased output / economic growth / access to electricity for Malawian firms (1)
30. [1] long hours / 3000 hours of sunshine (1) a good / viable source of energy (1)
31. [1] less need to import energy (1) reduce current account deficit (1)
32. [1] develops employment opportunities (1) raising incomes (1).
33. [1] opportunity cost of installing (1) example (1)
34. [1] opportunity cost of land use (1) reduced agricultural output (1)
35. [1] dependent on weather / sunshine and days lost (1) unstable supply (1) may experience storm damage / natural disasters (1)
36. [1] visual pollution (1) might reduce tourism / reduce house prices (1)
37. [1] cost of developing an electricity distribution network may be prohibitive
38. [1] cost of switching from fossil-fuel burning domestic appliances to electrical ones may not be affordable to households (1) limiting the impact of the switch (1)
39. [1] expensive to install (1) worsen government budget position (1)
40. [1] visual pollution (1) might reduce tourism / reduce house prices (1)
41. [1] solar panels could be damaged by storms (1) making them inefficient (1).
42. [1] will increase import prices (1) reducing imports (1) may increase cost of imported raw materials and capital goods cost (1) cause cost-push inflation (1) cause slow economic growth (1)
43. [1] may reduce pressure on domestic firms to keep prices low (1) quality high (1)
44. [1] may reduce confidence in the economy (1) reduce investment (1) increase debt (1).
45. [1] will reduce export prices (1) increase exports (1) reduce imports (1)
46. [1] make domestic goods more competitive (1) reduce a current account deficit / improve the balance of payments (1)
47. [1] may increase economic growth (1) reduce unemployment (1) attract MNCs / attract investment (1) increase tourism (1)
48. [1] opportunity cost / costly for government to intervene (1) e.g. less funding for education / healthcare / housing (1)
49. [1] may increase government tax revenue (1).