Malawi’s manufacturing sector is expected to register strong growth in 2024 from 0.3 percent last year to 2.1 percent this year, the Reserve Bank of Malawi has predicted.
In its Financial and Economic Review published on Friday, the bank says the improved growth estimate is primarily caused by several factors, including improved electricity supply, slightly better foreign exchange accessibility and fuel availability.
“However, the still sluggish growth is explained by poor performance of the agricultural industry, which provides inputs to the industry, and the continued shortage of foreign currency, making it difficult for companies to import raw materials for production.
“Meanwhile, 2025 growth is anticipated to be at 5.6 percent. This forecast is based on expectations of an improved foreign exchange situation, consistent power supply, fuel availability and enhanced agricultural production,” the bank says.
Scotland-based economist Velli Nyirongo said the anticipated strong growth in manufacturing this year is exciting.
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“This growth signifies more jobs across the sector, a less agriculture-dependent economy and increased foreign exchange through exports. New technologies and skills from foreign investment can further boost productivity.
“Additionally, growth in manufacturing strengthens supporting industries like suppliers and distributors.
“While challenges remain, this significant rise in manufacturing paves the way for a more prosperous Malawi,” Nyirongo said.
Looking at agriculture, forestry and fishing, the bank says it expects growth in the sector to remain constant at 0.7 percent.
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The projection is mainly reflective of the El-Nino weather conditions experienced during the 2023-24 agriculture season which affected crop output.
“However, the positive growth is anchored on the estimated increased production in agricultural industry as a result of increased investment in the irrigation and mega farms initiatives and improved performance in forestry and animal production.
“Looking ahead, the sector is expected to rebound and grow by 4.3 percent in 2025.
The uptick is expected to stem from the full utilisation of the mega farms and anticipated favourable weather conditions,” the bank says.
According to the Financial and Economic Review in 2024, the country’s GDP is expected to grow at a moderate pace of 2.3 percent, from an estimated growth of 1.9 percent in 2023.
The 2024 growth is lower than 3.2 percent projected in November 2023.
“The downward revision for growth in 2024 is due to a lower performance in the agriculture sector and spillovers to other sectors on account of El-Nino weather conditions,” the bank says.
RBM has predicted the growth rate for 2025 at 4.3 percent buoyed by anticipated good weather conditions and positive benefits from the full operationalisation of the mega farms investments, which will support growth in the agriculture industry and all other industries which depend on the agriculture industry for raw materials.
