The people and economy of Malawi are highly dependent on the country's natural resources, and this is particularly true of the fish provided by Malawi's waterways. Fisheries create jobs for 400,000 people and provide livelihoods for two million Malawians. Fish provides up to 40 percent of the protein consumed in the country. However, increasing populations and dependence on fish as a resource has led to over-fishing. This problem is now being worsened by continued population increases as well as climate change, which has produced shorter rainy seasons and therefore led to reduced water levels in lakes. This decrease in water disrupts fish breeding and eliminates many fish nursery sites, all of which lead to further decreased fish stocks.

Malawi is also dependent on its forests. Forest resources contribute to 6.1 percent of the country’s GDP and fuel wood and charcoal provide 98.7 percent of the total energy needs of the country. The dependence on solid fuels has led to high rates of deforestation, respiratory diseases from indoor air pollution and increased workloads for women who now have to walk further distances to collect firewood. To turn this trajectory around, in June 2016 the Government of Malawi adopted new policies for fisheries and aquaculture as well as forestry that better link the issues of environmental sustainability, livelihoods and poverty reduction.

The UNDP-UNEP Poverty-Environment Initiative (PEI) has worked with the Government of Malawi to ensure that the revised policies include mechanisms for community benefit sharing and community based natural resource management. During the drafting process of the policies, PEI encouraged and supported the government in consulting with local stakeholder groups. During these outreach efforts, one local district leader observed that if natural resources were managed by the communities in collaboration with the government and under the guidance of a strong legal and policy framework, illegal charcoal and timber production could be reduced and poverty alleviated.

The resulting revised forestry policy notes that the contribution of forestry to Malawi's GDP are included as agriculture and do not take into account the value of non-wood forest products, processed timber or the informal trade in fuel wood and charcoal. As a result, the potential of the forestry sector to contribute to poverty reduction is significantly underestimated. This is in line with the findings of the PEI Economic Valuation Report on Sustainable Natural Resources Use in Malawi(Link downloads a pdf report). To address this issue, the revised policy aims to ‘Promote the development of initiatives for adequate and sustainable short, medium and long term financing mechanisms for the forestry sector and its contribution to GDP.’