By Kingsley Jassi:
Both capital formation and the external sector took dives between 2017 and 2025.
However, the level of consumption is the only thing Malawians managed to increase exponentially during that period.
Malawi’s consumption cost was valued at K11.92 trillion last year as compared to K6.39 trillion in 2017, at constant prices (2017), according to a review by National Statistical Office (NSO).
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That sharp increase in final consumption was not supported by domestic production as reflected by capital formation—which represents the total value of investments in the industrial sector—and increased reliance on imports.
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“The (consumption) growth was driven mainly by private final consumption, which increased from K4.76 trillion in 2017 to K8.97 trillion in 2024 and K10.73 trillion in 2025,” the NSO report shows.
As exports struggled over that period from K797.1 billion in 2017 to a peak of K989.7 billion in 2023, and down to K718.5 billion in 2025, import levels grew by about 300 percent over the period.
The trade imbalance is said to have caused a net drag to gross domestic product.
Capital formation was estimated at K1.39 trillion in 2025, which is less than K1.54 trillion that was estimated in 2018, although it has now taken a two-year recovery trend from a fall to K940 billion in 2023.
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“The recovery was mainly supported by increased investment in dwellings and machinery and equipment,” NSO says.
The statistics, therefore, show a net drag of the gross domestic product by the external sector, as seen in a sharp growth in imports compared to exports during the eight-year period under review.
“Over the same period, imports of goods and services also measured at constant (2017) prices increased much more rapidly, from K2.08 trillion to K4.88 trillion in 2024 and K6.13 trillion in 2025.
“Consequently, imports consistently exceeded exports, resulting in persistent negative net exports,” the NSO report reads.
With that consumption possibly being supported by foreign aid, the current aid decline, which is expected to exacerbate over the period to 2030—when all development partners have indicated would not continue with social support programmes—may further affect outcomes.
Meanwhile, economist Velli Nyirongo has said the real test will be whether Malawi can move from financing poverty towards reducing the structural causes of poverty.
“Without stronger productivity, exports, employment and private-sector investment, donor withdrawal will remain a significant threat to social protection.
“Sustainable financing ultimately depends on building a stronger economy capable of generating the resources needed to protect its own citizens,” Nyirongo said.
