Economic and Political Overview

flag Malawi Malawi: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response


Economic Indicators

Compared to other countries, Malawi's economy proved to be resilient to the Covid-19 crisis, mainly thanks to the dominant role played by the agricultural sector. Nevertheless, after a tepid rebound in 2021, Malawi’s economy entered another slowdown in 2022, when GDP grew an estimated 0.9% due to external shocks (particularly the global impacts of the Russia-Ukraine war) and a worsening balance-of-payments crisis caused by sustained fiscal and external imbalances. The country implemented significant measures to stabilize its economy; however, 2023 posed considerable economic hurdles with GDP growth reaching only 1.6% (World Bank). The restart of energy production at the Kapichira Hydroelectric Power Plant enhanced electricity accessibility, bolstering industry and services sectors. Nonetheless, scarcity of production inputs persisted across sectors due to foreign exchange shortages, dampening overall growth. The IMF expects economic growth to pick up to 3.3% this year and 3.8% in 2025.

Government expenditure consistently outpaced revenue growth, leading to a rising fiscal deficit, surpassing 10% of GDP in FY2022/23. Meeting financing needs became challenging, particularly in FY2023/24, with domestic market resources falling short. However, net borrowing is projected to moderate in FY2023/24 as part of the government's fiscal reform efforts. It's expected to reach 7.4% of GDP, an improvement from 10.4% in FY2022/23, marking the first decline in six years. This improvement is supported by a slight decrease in expenditure and a revenue increase of 2.4% of GDP. Tax revenue is projected to rise to 12.7% of GDP, driven by enhanced collection in various categories. The 44% kwacha adjustment is anticipated to benefit international trade and transaction taxes. With expected budget support and exchange rate gains, grants disbursement is forecasted to exceed the approved target, reaching 3.7% of GDP. Other revenue is also anticipated to improve, reaching 1.2% of GDP from an approved target of 0.7%. The public and publicly guaranteed debt stock continues to grow, fueled by higher utilization of both domestic and external borrowing. Public debt is estimated to have risen from 75.7% of GDP in 2022 to 81.3% in 2023. Increasing fiscal deficits and reliance on costly domestic borrowing have driven up domestic debt, climbing from 30% of GDP in 2021 to 42% in 2023 (data World Bank). In November 2023, financing assurances were secured from China and India, which will aid in the debt restructuring process. Following a prior decline, the 44% adjustment of the kwacha in November 2023 heightened inflationary pressures, driven by price hikes for commodities bought at the official rate. Consequently, food inflation surged, reaching a peak of 43.5% in December 2023.

While no reliable figures are available for the unemployment rate, poverty has been increasing in rural areas where 85% of the population lives, compared to urban areas where it fell significantly in the last decade. However, in 2023, an estimated 71.7% of the population were living below the international poverty line (World Bank). The country has one of the lowest GDP per capita (PPP) in the world, estimated at USD 1,732 in 2022 (World Bank). Other challenges include addressing scarce skilled human resources, providing healthcare, and managing population growth.

Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 12.5413.1811.0411.3111.79
GDP (Constant Prices, Annual % Change)
GDP per Capita (USD) 567580472470477
General Government Gross Debt (in % of GDP) 75.278.677.477.475.5
Inflation Rate (%) n/a27.719.812.28.1
Current Account (billions USD) -0.42-0.77-0.94-1.03-0.85
Current Account (in % of GDP) -3.4-5.9-8.5-9.1-7.2

Source: IMF – World Economic Outlook Database , Latest available data

Note: (e) Estimated Data

Main Sectors of Industry

With about 80% of the population living in rural areas, the economy of Malawi is predominantly agricultural: the primary sector is estimated to account for 21.8% GDP, 80% of export revenues, and 62% of employment (World Bank, latest data available). The main export and most cultivated crop is tobacco, while other revenue-generating crops include corn (maize), tea, coffee, sugarcane, cotton, sorghum, and potatoes. Historically, the country produces enough food to feed its population, though harvests can be seriously affected by adverse weather conditions, as was the case in 2015 and 2016 with El Niño-induced droughts. According to data from FAO, total production is estimated to be approximately 3.8 million tonnes, marking a 3% decrease from the previous five-year average. Within this volume, maize production constitutes the largest portion, estimated at a below-average level of 3.5 million tonnes in 2023. The reduced maize output is mainly attributed to decreased yields, compounded by localized crop losses and damage in southern districts resulting from flooding triggered by Cyclone Freddy in March.

Though still underdeveloped, the industrial sector contributes an estimated 18.3% of GDP, employing a mere 8% of the workforce. The majority of Malawi's industrial activity comes from manufacturing and food processing. Despite the government’s efforts to boost competitiveness, several challenges keep hindering the sector, including a poor business climate, a lack of well-developed infrastructure, and a shortage of skilled labor to operate machinery. Mining activities are at a small-scale level, as Malawi has no oil or precious metals (except for ruby). However, the country has some deposits of bauxite, asbestos, graphite, and uranium. According to data from the National Statistical Office (NSO), Malawi's industrial production, measured by the volume of output from industrial sectors, saw an average year-on-year increase of 8.8% in 2022. However, despite this growth, the overall industrial output across all sectors within the manufacturing sector declined, except for the manufacturing of tobacco (+72.9%), rubber, and plastic products (+7.8%).

The services sector is the major contributor to the economy, accounting for more than half of GDP (54.9%) and 30% of employment. The main activities include tourism, health services, the banking sector, telecommunications, and retail, with the government of Malawi holding significant shares in most of these sectors. Tourism is considered a priority economic sector in the country’s long-term development plan “Malawi Vision 2063”: prior to the COVID-19 pandemic, the sector accounted for more than 525,000 jobs, representing almost 7% of overall employment. After plummeting due to the pandemic, in 2022, the direct contribution of travel & tourism to GDP amounted to MWK 164.2 billion, accounting for 1.9% of GDP (data World travel & Tourism Council). Malawi's banking sector, overseen by the Reserve Bank of Malawi (RBM), is generally stable. However, only 25% of the adult population utilizes banking services. The sector comprises eight commercial banks, with the National Bank of Malawi and Standard Bank of Malawi dominating, holding a combined market share of 46% for total assets and 47% for total deposits. They also represent 56% of total loans and 58% of total equity capital (U.S. Trade Administration).

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 61.9 8.1 30.0
Value Added (in % of GDP) 21.8 18.3 54.9
Value Added (Annual % Change) -1.0 0.9 1.8

Source: World Bank - Latest available data.


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Monetary Indicators 20162017201820192020
Malawi Kwacha (MWK) - Average Annual Exchange Rate For 1 MUR 20.0821.1821.5821.0119.05

Source: World Bank - Latest available data.


Find out all the exchange rates daily on our service Currency Converter.

Indicator of Economic Freedom


The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

World Rank:
Regional Rank:

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation


Country Risk

See the country risk analysis provided by Coface.


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Foreign Trade in Figures

Malawi is relatively open to international trade: the country is a member of the WTO and has bilateral trade agreements with two of its main trade partners, South Africa and Zimbabwe. Malawi is also a beneficiary of the African Growth and Opportunity Act (AGOA), a U.S. trade preference program. As part of its trade policy, the country has been gradually reducing protections granted to domestic trade by shifting its sources of revenue from customs duties to consumption and direct taxes. Overall, Malawi's economy remains heavily dependent on agriculture, and its exports and imports reflect this reliance on primary and intermediate goods: tobacco accounts for almost half of total exports, as the country is one of the world's largest producers of tobacco. Other major exports include groundnuts, tea, dried vegetables, and agricultural products in general. Imports are led by refined petroleum (16.8% of total imports in 2022), machinery, transport equipment, fertilizers, and medicaments (data Comtrade).

According to the latest data available by Comtrade, the main export destinations of Malawi are Belgium (16%), Tanzania (9.4%), Kenya (6.9%), South Africa (6.4%), Zimbabwe (5.3%), and the United States (5.3%); whereas the top import origins are China (16.5%), the United Arab Emirates (14.0%), South Africa (14.0%), Kuwait (7.4%), India (5.5%), and Japan (3.2% - data 2022).

Malawi’s trade balance is structurally in deficit. In 2022, imports of goods declined to USD 1.5 billion, while the country exported goods for a value of around USD 800 million (-50.5% and -20.7% year-on-year, respectively – data WTO). Concerning services, imports stood at USD 1.3 billion against USD 417 million in exports (data WTO). The trade deficit has been contracting in recent years, a trend that was exacerbated in 2022 as imports collapsed reflecting the impact of foreign exchange shortages. While alleviating the external balance, the unavailability of foreign exchange led to shortages of imported goods (World Bank).

Foreign Trade Indicators 20182019202020212022
Imports of Goods (million USD) 2,6862,8922,6783,0731,520
Exports of Goods (million USD) 8388997711,009800
Imports of Services (million USD) 3894595845911,330
Exports of Services (million USD) 229373442462417
Trade Balance (million USD) -1,658-1,733-1,797-1,914n/a
Trade Balance (Including Service) (million USD) -1,819-1,819-1,940-2,043n/a

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data


Main Partner Countries

Main Customers
(% of Exports)
Belgium 16.0%
Tanzania 9.4%
Kenya 6.9%
South Africa 6.4%
Zimbabwe 5.3%
See More Countries 55.9%
Main Suppliers
(% of Imports)
China 16.5%
United Arab Emirates 14.0%
South Africa 14.0%
Kuwait 7.4%
India 5.5%
See More Countries 42.6%

Source: Comtrade, Latest Available Data


Main Products

0.9 bn USD of products exported in 2022
Unmanufactured tobacco; tobacco refuseUnmanufactured tobacco; tobacco refuse 45.3%
Groundnuts, whether or not shelled or broken (excl...Groundnuts, whether or not shelled or broken (excl. roasted or otherwise cooked) 9.0%
Tea, whether or not flavouredTea, whether or not flavoured 8.5%
Dried leguminous vegetables, shelled, whether or...Dried leguminous vegetables, shelled, whether or not skinned or split 6.0%
Oilcake and other solid residues, whether or not...Oilcake and other solid residues, whether or not ground or in the form of pellets, resulting from the extraction of soya-bean oil 2.8%
See More Products 28.4%
1.6 bn USD of products imported in 2022
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 16.8%
Mineral or chemical nitrogenous fertilisers (excl....Mineral or chemical nitrogenous fertilisers (excl. those in pellet or similar forms, or in packages with a gross weight of <= 10 kg) 8.0%
Mineral or chemical fertilisers containing two or...Mineral or chemical fertilisers containing two or three of the fertilising elements nitrogen, phosphorus and potassium; other fertilisers (excl. pure animal or vegetable fertilisers or mineral or chemical nitrogenous, phosphatic or potassic fertilisers); animal, vegetable, mineral or chemical fertilisers in tablets or similar forms or in packages of a gross weight of <= 10 kg 5.4%
Palm oil and its fractions, whether or not refined...Palm oil and its fractions, whether or not refined (excl. chemically modified) 2.6%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 2.3%
See More Products 64.8%

Source: Comtrade, Latest Available Data


To go further, check out our service Import Export Flows.


Main Services

Source: United Nations Statistics Division, Latest Available Data

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Sources of General Economic Information

List of Malawi's Ministries
Statistical Office
National Statistical Office of Malawi
Central Bank
Reserve Bank of Malawi
Stock Exchange
Malawi Stock Exchange
Search Engines
Google Malawi
Biz Malawi
Economic Portals

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Political Outline

Current Political Leaders
President: Lazarus Chakwera (since 28 June 2020)
Vice President: Saulos Chilima (since 3 February 2020)
Next Election Dates
Presidential Election: 2025
National Assembly: May 2024
Main Political Parties
Malawi is a multi-party state system. The main political parties include:

- Malawi Congress Party (MCP): centre-right (current President Lazarus Chakwera belongs to the MCP)
- Democratic Progressive Party (DPP): liberal
- United Transformation Movement (UTM): centre to centre-right
- United Democratic Front (UDF): centre-left
- People's Party (PP): centre-right
- Alliance for Democracy (AFORD): centre-left.
Type of State
Malawi is a presidential republic.
Executive Power
The executive power is exercised by the government. The President of Malawi, elected through universal direct suffrage every 5 years, is both chief of state and head of the executive power. The President appoints his Cabinet, whose members can be drawn from either within or outside of the Parliament.
Together with the President, a vice-president is elected. The president can choose to appoint a second vice president, who must be from a different party.
Legislative Power
Legislative power is vested in the Parliament, which under the Constitution has two chambers: the National Assembly - with its 193 members elected for a five-year term in single-seat constituencies - and the Senate - which was originally meant to have 80 seats and had to represent traditional leaders, different geographical districts and special interest groups (such as women, the disabled, young people), but which has never been created.

Indicator of Freedom of the Press


The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:

Indicator of Political Freedom


The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Partly Free
Political Freedom:

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House


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COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Malawi, please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.


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Latest Update: April 2024