By Mcloyd Chilangiza:
The World Bank has warned that policy-related constraints are stifling Malawi’s export performance, despite vast potential in sectors like agriculture to spearhead growth.
In its Malawi Economic Monitor (MEM) issued last week, the Bretton Woods institution says only about six percent of Malawian firms are involved in exports, with tobacco accounting for 61 percent of exports in 2024, slightly lower than the 69 percent recorded in 2009.
Titled ‘Reversing Malawi’s Export Decline,’ the World Bank observes that apart from structural challenges, policy distortions such as non-tariff barriers, export licensing requirements and macroeconomic instability are discouraging private sector participation in international trade.
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Figures provided show that the country has only 3.2 exporters per 100 000 people, compared to an African average of 28.
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The report comes amid a glaring gap between exports and import, with statistics from the National Statistical Office showing that in 2025, Malawi exported goods worth $900 million (about K1.5 billion) against $3.4 billion (about K5.9 trillion) worth of imports.
According to the World Bank report, frequent ad-hoc export restrictions and lengthy administrative procedures are also among barriers to growth of exports.
It says export-related processes in the country can take a minimum of four weeks and often longer even when exporters fully comply with regulations.
This has pushed some firms to scale down operations, shift into informality or resort to illicit trade channels.
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Speaking at the launch of the report in Lilongwe, World Bank Senior Economist Jakob Engel said structural weaknesses, micro-instability and restrictive trade policies continued to affect growth of exports.
Illovo Sugar (Malawi) plc Managing Director Ronald Ngwira attributed the situation to economic volatility and policy inconsistencies among other factors.
Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha said the desire in fiscal policy is to preserve the situation and rechannell credit towards productive sectors for growth of exports.
Commenting on the MEM findings, agricultural policy expert Tamani Nkhono Mvula said non-tariff barriers and restrictive licensing procedures shrinks private sector growth if not carefully designed.
“Every time there are tariff or non-tariff barriers, they tend to have a negative effect on private sector growth because they limit easy access to international markets. If the resources that firms could reinvest into expansion are instead spent navigating administrative hurdles, then growth is stifled.
“The government and the private sector must analyse these restrictions and ensure that the net effect of any policy is to promote not hinder growth,” he said.
In his commentary to the MEM report, economist Donasius Pathera observed that the current trade policy environment and macroeconomic instability are discouraging the country from competing effectively on the international market.
Pathera warned that exchange rate volatility, foreign exchange shortages and policy unpredictability are discouraging firms from investing in value addition and agro-processing.
“In practical terms, the country needs a shift from control-oriented trade governance to competitiveness oriented trade governance.
“Strong regulation is important, but it should enable exporters to meet international requirements efficiently, not trap them in procedural bottlenecks,” Phathera said.
Economics Association of Malawi President Bertha Bangara Chikadza also faulted current trade policies while observing that they are increasing transaction costs, delaying shipments and reducing predictability for exporters, particularly in agriculture.
Chikadza called for balancing regulatory oversight with trade facilitation that requires focusing inspections and controls on high risk products while fast tracking low risk compliant exporters.
“But above all, if Malawi is to address its structural trade imbalance and strengthen export led growth, reforms must focus on improving predictability and restoring macroeconomic stability,” she said.
Data from the National Statistical Office show that in 2025 Malawi’s trade deficit widened by 15 percent to $2.67 billion (about K4.6 trillion), from $2.2 billion (about K3.8 trillion), the previous year, driven by rising imports and declining exports.
International merchandise trade statistics for December 2025 indicate that total imports reached $3.6 billion in 2025 from $3.2 billion in 2024, while exports slightly dropped to $936.3 million from $947.2 million the previous year.
