Local manufacturers have warned that Malawi risks becoming a distribution-based economy that exports jobs to neighbouring countries if the government fails to address bottlenecks constraining production.
Manufacturers Association of Malawi President Gloria Zimba said the harsh operating environment was pushing investors from manufacturing into distribution.
Zimba said 2025 has been a difficult year for the sector, citing persistent foreign exchange shortages, rising production costs and non-tariff barriers.
“Many investors are changing their business models from manufacturing to distribution. If everyone becomes a distributor, then we are exporting our jobs to neighbouring countries where these goods are produced.
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“Even where local raw materials are encouraged, some critical inputs such as plastic polymer are not produced in Malawi and must be imported using forex,” Zimba said.
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She said rising utility costs persistent in the just-ended year had forced firms to freeze hiring, pursue voluntary exits and, in some cases, retrench workers.
The local producers have since appealed to the government to change how it engages the private sector to achieve productive outcomes.
“We are pleading with the government for meaningful engagement sessions; not meetings held just to tick a box, a two-hour meeting where someone from the private sector is given only five minutes to speak because government officials are rushing to another meeting,” Zimba said.
Responding to the concerns, Ministry of Industry, Business, Trade and Tourism spokesperson Patrick Botha said support mechanisms already exist to ease pressure on manufacturers.
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He said the ministry remained accessible to the private sector and noted that the current minister, who comes from the private sector, has been engaging key industries including those in tea and sugar production.
“Most manufacturers operate under the Industrial Rebate Scheme administered by the Malawi Revenue Authority, which allows duty-free importation of raw materials. “We also have the Public Private Dialogue forums where there is direct dialogue at high level with the private sector,” Botha said.
Botha further urged manufacturers to embrace innovation and expansion, saying the government’s industrialisation drive was backed by continued engagement.
The manufacturing sector is projected to grow by 1.8 percent in 2025, down from the 2.4 percent forecast in May, but an improvement from the modest 0.2 percent growth recorded in 2024, according to the Reserve Bank of Malawi’s Financial and Economic Review for the third quarter.
RBM attributed the revision to persistent foreign exchange shortages and electricity supply disruptions that continue to limit access to imported raw materials, spare parts and machinery.
However, the sector’s performance is projected to strengthen further in 2026, with growth estimated at 2.5 percent, supported by improved agricultural output.
