Malawi’s manufacturing sector is expected to grow by 2.5 percent this year, up from 1.8 percent in 2025, according to the Ministry of Finance, Economic Planning and Decentralisation.
In its 2026 Annual Economic Report, the ministry projects that the sector will expand further to 4.7 percent in 2027.
Manufacturing is one of Malawi’s priority growth areas alongside agriculture, tourism and mining under the ATMM strategy.
“This recovery is expected to be driven by improvements in agricultural productivity, facilitated by mega farm investments and irrigation.
“Furthermore, the anticipated stabilization of the foreign exchange market along with consistent power and fuel supply, will support the industry’s recovery,” the report says.
- Advertisement -
The expected improvement in manufacturing comes despite the private sector continuing to struggle with a foreign exchange crunch that has left many firms unable to import raw materials, constraining production capacity.
The report says the agriculture sector grew by 1.3 percent in 2025, recovering from a contraction of 0.2 percent in 2024.
The crop subsector registered positive growth, driven largely by Malawi’s main export crops such as tobacco, sugar and tea.
However, the report says growth would have been stronger if not for rising agricultural input prices due to inflation and delays in the onset of rains at the start of the 2024-25 growing season.
- Advertisement -
- Advertisement -
“In 2026 and 2027, the agriculture industry is projected to rebound modestly at 2.8 percent and grow further to 3.8 percent respectively. This is reflective of the industry’s recovery from climate shocks and increased resilience.
“The industry expects to establish fertilizer factory during this period. This is likely to reduce the price and increase the supply of agricultural inputs,” the economic report says.
The Ministry of Finance also expects strong growth in the mining sector over the next two years.
Mining is projected to expand by 5.9 percent this year, up from 5.3 percent in 2025, before rising to 6 percent in 2027.
“The mining industry has also been identified as a strategic priority under the Government’s Economic Recovery Plan, with a focus on expanding production and value addition in rare earth elements, graphite, and uranium,” the report says.
The ministry also expects the accommodation and food services industry, the core of the tourism sector, to grow by 5.3 percent this year, up from 4.9 percent in 2025.
Growth is projected to accelerate to 5.9 percent next year.
“This is on account of expected disinflation and increased foreign exchange availability.
“The improved growth will also be supported by increased activities in industries linked to tourism: agriculture, electricity and water, wholesale and retail, and transportation,” the report says.
In the 2026-27 National Budget, Finance Minister Joseph Mwanamvekha allocated a combined total of K1.334 trillion to the ATMM sectors, representing 12.2 percent of the total budget.
Mwanamvekha said the government continues to prioritise the key productive sectors under ATMM because of their potential to stimulate socioeconomic growth and development.
Speaking during a Monetary Policy Technical Forum in Lilongwe on Wednesday, Esmie Kanyumbu, executive director of the Economics Association of Malawi, welcomed the significant total allocations to ATMM sectors but said allocations to the TMM remain worrying.
