【世界银行】马拉维经济监测2026年2月：正确改革-专题-扭转马拉维出口下滑-2026.2

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MalawiEconomnc

Monitor

FEBRUARY2026

GETTINGREFORMSRIGHT

SPECIALTOPIC:

REVERSINGMALAWI’SEXPORTDECLINE

THEWORLDBANK

IBRD.IDAlWORLDBANKGROUP

MalawiEcnmnc

Monitor

FEBRUARY2026

GETTINGREFORMSRIGHT

SPECIALTOPIC:

REVERSINGMALAWI’SEXPORTDECLINE

THEWORLDBANK

IBRD.IDAIWORLDBANKGROUP

©2026InternationalBankforReconstructionandDevelopment/TheWorldBank

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Telephone:202-473-1000

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Coverimage:

"EchoesofInstability:RethinkingMarketsforaJustRecovery”

byJimmyMalinga

Coverdesign,interiordesignandtypesetting:

PiotrRuczynski,London,UnitedKingdom

CONTENTS

Acknowledgements7

Abbreviations8

Overview9

1EconomicDevelopments18

1.1GlobalandRegionalContext19

Aresilientglobaleconomyfacesaworseningoutlook19

1.2RecentEconomicDevelopments21

Growthremainssubdueddespiteamodestreboundinagriculture21

Persistentdouble-digitdeficitsundermineMalawi’sfiscalstability25

Currentaccountdeficitdeepensasreservesremaincriticallylow31

Inflationismoderatingbutremainselevatedamidsupply-side,fiscal,andmonetarypressures32

Thebankingsectorhasperformedstrongly,butlargeexposuretogovernmentdebtisasourceofvulnerability33

1.3Medium-TermEconomicOutlook35

2ReversingMalawi’sExportDecline39

WhyexportingmattersforMalawi’sdevelopmentprospects40

UnderstandingMalawi’sdecade-longexportdeclineinfivestylizedfacts42

Policybarriersbehind,atandbeyondtheborderimpedeMalawi’sexportpotential50

Maintainingmomentumofemergingagro-processingvaluechains53

Recommendationstoincreaseanddiversifyexports55

References58

BOXES

BOX1.1Malawi’sLaborMarketShowsDeepStructural

WeaknessesDespiteaGrowingWorkforce23

BOX.1.2IntroductionofFreeSecondaryEducation

SupportsEquitybutRequiresManagingFiscalChallenges26

BOX1.3StrengtheningDecentralizationinMalawifor

GreaterAccountabilityandImprovedServiceDelivery27

FIGURES

FIGUREO.1ASnapshotofMalawi’sRecentEconomic

Developments17

FIGURE1.1Globalgrowthhasperformedbetterthan

expectedin2025 19

FIGURE1.2 amidhightradevolumes…19

FIGURE1.3 front-loadingofindustrialproduction

aheadofhighertarifs 19

FIGURE1.4 andimprovementsinfinancialmarket

conditions19

FIGURE1.5Inflationisonadownwardtrend 20

FIGURE1.6 ascommoditypricescontinuetoease20

FIGURE1.7Regionalgrowthtrendsareuneven20

FIGURE1.8InflationinMalawiremainsthehighestin

theregion,whileitissofteninginmostofitsneighbors20

FIGURE1.9Weakrecoveryinagricultureandindustry

stifledeconomicoutputin202521

FIGURE1.10Consumptionisthemaindriverof

economicactivity21

FIGURE1.11Spendingonfertilizersubsidieshaslittle

impactonmaizeproduction22

FIGURE1.12Mosthouseholdsdonotproduceenough

foodfortheirownneeds22

FIGURE1.13Maizepricesin2025weresignificantly

higherthaninthepreviousyears22

FIGURE1.14Maizeretailpriceshavecloselytracked

importparityprices22

FIGURE1.15Privatesectorperformanceismixed,

withlowsalesandexportsbutsolidemploymentgrowth22

FIGUREB1.1.1Themajorityoftheworkingage

populationremainsoutsidethelaborforce23

FIGUREB1.1.2MostruralMalawiansworkin

agriculturewhileurbanworkersprimarilyareemployedin

servicessectors23

FIGURE1.16Corruption,hightaxrates,andlimited

accesstofinanceremainthemostbindingconstraintsfor

Malawi’sfirms24

BOX1.4WhyMalawiNeedsDomesticDebt

Restructuring—andHowtoDesignItEfectively29

BOX2.1NewVisaRequirementsCouldNegatively

ImpacttheTourismSector41

BOX2.2Nigeria’sExperienceHighlightsthe

UnintendedConsequencesofImportBarriers52

FIGURE1.17Thereinstatementoftheautomatic

adjustmentmechanismforfuelwillhelpfuelpricesbe

costrecovery25

FIGURE1.18Since2022,Malawihashadoneofthe

highestbudgetdeficitsinSub-SaharanAfrica25

FIGURE1.19Expendituresremainsignificantlyhigher

thanrevenues 26

FIGURE1.20 andthefiscaldeficitin2025was

largerthaninthepreviousthreeyears26

FIGUREB.1.3.1Localgovernmentspendingasa

shareoftotalspendinghashalvedsince200527

FIGUREB.1.3.2Theshareoftransferstolocal

governmentsforrecurrentservicedeliveryhasfallen

dramatically27

FIGURE1.21Thegovernmentcontinuestoborrow

heavilyfromthefinancialsectorathighinterestrates28

FIGURE1.22 andtheRBMhasbeenamajorbuyer

ofpublicdebt28

FIGURE1.23Publicdebthasrisensignificantlyover

thepasttwodecades 28

FIGURE1.24 drivenbyhighandpersistentfiscal

deficits,lowgrowth,exchangeratepressuresandan

unidentifieddebt28

FIGUREB1.4.1Domesticdebtserviceistakingupa

growingshareofrevenue29

FIGUREB1.4.2Thebankingsectoristhelargest

holderofdomesticdebt29

FIGURE1.25Malawineedstorundebt-stabilizing

primarybalances29

FIGURE1.26Thecurrentaccountdeficitwidenedin

2024 31

FIGURE1.27 andimportscontinuetosignificantly

outpaceexportsin202531

FIGURE1.28Theparallel-marketFXpremium

remainslargealthoughitnarrowedinthesecondhalfof202532

FIGURE1.29Oficialreservesarecriticallylow

despiteamandatorysurrenderrequirement32

FIGURE1.30ExportsofkeycommoditiestotheUS

declinedfollowingtheintroductionnewtarifs32

FIGURE1.31Inflationremainedhighinthesecond

halfof2025 33

FIGURE1.32 driveninpartbyhighmoneysupply

growthtofinancethelargefiscaldeficit33

FIGURE1.33Thepolicyratehasremainedstable

sinceearly2024despiteinflationarypressures33

FIGURE1.37Bankcreditcontinuestobeskewed

towardgovernmentsecurities34

FIGURE1.36Creditallocationtotheprivatesector

hasincreasedfollowingalongperiodofstagnation34

FIGURE1.34Assetquality,lending,andliquidity

trendsinthebankingsectorremainstrong34

FIGURE1.35TheriskprofileofMalawianbanksis

highlyvaried34

FIGURE2.2Foreigninvestmenthaslaggedthe

regionandotherlow-incomecountries40

FIGURE2.1Exportshavebeenonasteadydecline

overthepastdecade40

FIGURE2.3Aviciouscycleofrestrictivetrade

policiesandweakoutcomes41

FIGURE2.4Exportshavestagnatedoverthepast

decade,whileimportshavesteadilyincreased42

TABLES

TABLEO.1PolicyPriorityAreasandKeyActions12

TABLE1.1FiscalAccounts30

TABLE1.2PolicyPriorityAreasandKeyActions37

TABLE1.3KeyMacroeconomicandFinancialIndicators38

TABLE2.1Malawi’sexportsarelow,with

manufacturesonlymakingupaminorshare43

TABLE2.2Almost600productsexportedby

Malawianfirmsin2009arenolongerexportedin202444

FIGURE2.5Tobaccocontinuestodominategoodexports43

FIGURE2.6Malawi’sexportshavebecomeless

diversifiedinthepastdecade44

FIGURE2.7Exportsareconcentratedamongafew

firmsandinafewproductsanddestinations45

FIGURE2.8ThedeclineinMalawianexporterswas

drivenbytheprimaryproductandmanufacturingsectors46

FIGURE2.9Exporterentryrateshavebeendeclining

andnewentrantsfacelowsurvivalrates46

FIGURE2.10GVCfirmshaveshownmorestability

andarenowexceedingexporter-onlyfirms48

FIGURE2.11ExportstoAfricancountrieshave

increasedbetween2006–2008and2022–202449

FIGURE2.12ExportstoAfricaincludefarmorefood

productsandmanufacturesthanthoseoftherestoftheworld-49

FIGURE2.13ExportvaluetoAfricahasbeenmore

stablebutexporternumbershavedeclined50

FIGURE2.14Malawi’sbordersare“thicker”than

thoseofmanyothercountriesintheregion51

FIGURE2.15Malawi’starifslagthoseofpeer

countriesduetopreferentialtradeagreements51

TABLE2.3MalawilagstheAfricanaverageintermsof

exportvalue,exportsvarietiesanddestinations45

TABLE2.4Diversificationcorrelateswithexport

survivalforMalawianfirms47

TABLE2.5Potentialrevenuelossesestimatedonthe

basisoftradegaps53

TABLE2.6Whatdrovethesuccessofthegroundnut,

macadamiaandsoybeanvaluechains54

7

ACKNOWLEDGEMENTS

TheMalawiEconomicMonitor(MEM)analyzeseconomicandstructuraldevelopmentissuesinMalawi.This22ndeditionwaspublishedinFebruary2026andispartofanongoingseriespublishedtwiceperyear.TheMEMaimstofosterinformedpol-icymakingandarobustdebateregardingthekeychallengesthatMalawifacesinitsefortstoachieveinclusiveandsustain-ableeconomicgrowth.

ThiseditionwaspreparedbyJakobEngel(SeniorCountryEconomist,TaskTeamLeader),AnwarMussa(Economist,co-TaskTeamLeader),EfremZephnathChilima(SeniorPrivateSectorSpecialist,co-TaskTeamLeader),LinaMarcelaCardona(SeniorEconomist),QursumQasim(SeniorFinancialSectorSpecialist),InnocentNjatiBanda(FinancialSectorSpecialist),MilesMcKenna(SeniorCountryOfficer),EvaMelis(SeniorPublicSectorSpecialist),NobuyukiTanaka(SeniorEconomist),OmerNasirElseed(SeniorEducationSpecialist),DavidMihalyi(SeniorEconomist),MichaelMasiya(Consultant),LaurynKuwalaNyasulu(Consultant),andAlexandraSoininen(Consultant).Chapter2drawsonthebackgroundpapers“Malawi’sExportDecline:Globaltradefootprint,performanceanddynamics”byProf.LawrenceEdwards(UniversityofCapeTown),JakobEngel,andAleksanderStojanov,“DataAnalyticsandMirrorAnalysistoSupportRiskManagementinCustomsControl”byChrisopherGrigoriou,andadditionalanalysisbyElizabethVenable(PalladiumInternational).ThereportwaseditedbyMarcelloArrigo(Consultant).

AbhaPrasad(PracticeManagerforFiscalPolicyandGrowth),AlwaleedAlatabani(PracticeManagerforFinance,CompetitivenessandInvestment),FirasRaad(CountryManagerforMalawi),HassanZaman(RegionalPracticeDirector),andNathanM.Belete(DivisionDirector)providedoverallguidance.TheteamwishestothankAghassiMkrtchyan(LeadCountryEconomist)andpeerreviewersMiguelSalagarridaNoel(SeniorEconomist)andAleksanderStojanov(SeniorEconomist)fortheirconstruc-tiveinput.EarliercommentsfromAngellaFaithMontfaucon(SeniorEconomist)andBlertaQerimi(SeniorPrivateSectorSpecialist)aregratefullyacknowledged.

ThisreportbenefitedfrominputprovidedbyrepresentativesoftheMinistryofFinance,EconomicPlanningandDecentralisation;theMinistryofIndustrialisation,Business,TradeandTourism;theReserveBankofMalawi;theNationalStatisticalOffice;othergovernmentministries,departments,andagencies;aswellastheInternationalMonetaryFund.TheteamwouldliketothankrepresentativesoftheprivatesectorandcivilsocietyorganizationsinLilongweandBlantyrefortheirhelpfulcontributions.

HenryChimbali(ExternalAfairsOfficer),KarimaLaoualiLadjo(TeamAssistant),andDemisterMisomali(TeamAssistant)assistedwithexternalcommunications,design,andadditionalproductionsupport.

Thefindings,interpretations,andconclusionsexpressedinthispublicationdonotnecessarilyreflecttheviewsoftheWorldBank’sExecutiveDirectorsorthecountriestheyrepresent.ThereportisbasedoninformationcurrentasofFebruary14,2026.

TheWorldBankteamwelcomesfeedbackonthestructureandcontentoftheMalawiEconomicMonitor.PleasesendcommentstoJakobEngel(jengel@),EfremChilima(echilima@),andAnwarMussa(amussa@).

8

ABBREVIATIONS

AfCFTA

AfricanContinentalFreeTradeArea

MEM

MalawiEconomicMonitor

AGOA

AfricanGrowthandOpportunityAct

MERA

MalawiEnergyRegulatoryAuthority

APES

AgriculturalProductionEstimatesSurvey

MFMOD

WorldBankMacro-FiscalModel

APM

AutomaticPricingMechanism

MITC

MalawiInvestmentandTradeCentre

ASM

ArtisanalandSmall-ScaleMiner

MMTZ

Malawi,Mozambique,TanzaniaandZambia

ASYCUDA

AutomatedSystemforCustomsData

MoA

MinistryofAgriculture

CDF

ConstituencyDevelopmentFund

MoFEPD

MinistryofFinanceEconomicPlanning

CDSS

CommunityDaySecondarySchools

andDecentralization

COGA

ControlofGoodsAct

MRA

MalawiRevenueAuthority

COMESA

CommonMarketforEastern

andSouthernAfrica

MT

MT/ha

MetricTons

MetricTonsPerHectare

COMTRADE

UnitedNationsCommodityTradeStatisticsDatabase

MWKNES

MalawiKwacha

NationalExportStrategy

DFI

DevelopmentFinanceInstitution

NGO

Non-GovernmentalOrganization

DRC

DemocraticRepublicoftheCongo

NLGFC

NationalLocalGovernmentFinance

DSA

DebtSustainabilityAnalysis

Committee

EMDE

EmergingMarketsandDevelopingEconomies

NPL

Non-PerformingLoan

EPZ

ExportProcessingZone

NSO

NationalStatisticalOffice

FDI

ForeignDirectInvestment

NSW

NationalSingleWindow

FSE

FreeSecondaryEducation

NTB

Non-TarifBarrier

FX

ForeignExchange

OECD

OrganisationforEconomicCo-operationand

FTA

FreeTradeArea

Development

FY

FinancialYear

OSBP

OneStopBorderPost

GDP

GrossDomesticProduct

PPP

PurchasingPowerParity

GoM

GovernmentofMalawi

PSF

PriceStabilizationFund

GVC

GlobalValueChain

PSIP

PublicSectorInvestmentProgramme

HACCP

HazardAnalysisandCriticalControlPoints

RBM

ReserveBankofMalawi

HIPC

HeavilyIndebtedPoorCountries

RHS

RightHandSide

HS

HarmonizedSystem

ROA

ReturnonAssets

ICT

InformationandCommunicationTechnology

ROE

ReturnonEquity

ID

IdentityDocument

SADC

SouthernAfricanDevelopmentCommunity

IFPRI

InternationalFoodPolicyResearchInstitute

SEZ

SpecialEconomicZone

IGFTF

IntergovernmentalFiscalTransferFormulae

SITC

StandardInternationalTradeClassification

IMF

InternationalMonetaryFund

SME

SmallandMedium-SizedEnterprise

KG

Kilogram

SPS

SanitaryandPhytosanitary

LA

LocalAuthority

SSA

Sub-SaharanAfrica

LB

Pound

TBT

TechnicalBarrierstoTrade

LAPA

LocalAuthorityPerformanceAssessment

US

UnitedStates

LHS

LeftHandSide

US$

UnitedStatesDollar

LIC

Low-IncomeCountry

USAID

UnitedStatesAgencyforInternational

LMIC

Low-andMiddle-IncomeCountry

Development

MALGA

MalawiLocalGovernmentAssociation

VAT

ValueAddedTax

MCCCI

MalawiConfederationofChambersofCommerceandIndustry

WTO

WorldTradeOrganization

9

OVERVIEW

PARTI:EconomicDevelopments

Thenewadministrationhasinitiatedaseriesofimportantpolicyreforms,butsluggishgrowth,

heightenedinflationarypressures,andinsuficientinvestmentcontinuetounderminelivingstandards

Thenewlyelectedadministrationhasinitiatedimportantpolicyreformstosupportmacroeco-nomicstabilizationsincetheSeptember2025elections,buteconomicfundamentalsremainweak.

Malawi’seconomycontinuestostruggletokeepupwithpopulationgrowth,resultinginerodinglivingstandards.Realgrossdomesticproduct(GDP)isestimatedtohavegrownbyonly1.9percentin2025,upslightlyfrom1.7percentin2024—butwiththepopulationexpandingbyaround2.6percent,GDPpercapitafellforthefourthconsecutiveyear.ThemodestimprovementinrealGDPin2025reflectedapar-tialrecoveryinagricultureafterthe2024drought.However,outputremainsconstrainedbybelow-av-eragerainfallandshortagesofinputs,includingfertilizer,andweakindustrialactivityamidfuelandpowersupplydisruptions,acuteforeignexchangeshortages,andotherstructuralchallenges.

Malawi’sinflationrateremainsthehighestintheregion,thoughithastrendeddownwardslightlyinrecentmonths.Headlineinflationaveraged28.4percentin2025,drivenbyhighfoodpricesandrapidmoneycreationlinkedtolargefiscaldeficits,especiallyinthepre-electionperiod.Thepolicyratehasstayedat26percentforovertwoyears.Asinflationhasdeclinedinrecentmonths,therealpol-icyrate(measuredagainstheadlineinflation)turnedpositiveforthefirsttimesince2021inJanuary.

Despitesubstantialpublicspending,agriculturaloutputremainslow.Althoughagricultureabsorbsmorethan10percentofthenationalbudget,maizeyieldsaverageonly2.1metrictonsperhectare(MT/ha),wellbelownationaltargetsofmorethan4MT/ha.Fertilizersubsidieshaveprovenlargelyinefec-tiveinsignificantlyincreasingproduction.Weathervolatility,delayedinputdelivery,limiteduptakeofimprovedtechnologies,andsubsidyadministrationinefficiencieskeepharvestsunstableandfoodinsecurityelevated.

Theprivatesectorfacesanexceedinglydifficultbusinessenvironment.Firmscontinuetostruggle,withannualrealsalesgrowthofjust3.0percent—wellbelowregionalcomparators—andonly6.0per-centoffirmsexportdirectly.Mostfirmsareoperatingatbelow50percentcapacity.Inconsistentandoftenrestrictivepolicies,highborrowingcosts,persistentforeignexchangeshortagesdrivenbythecontinuedexchangeratemisalignment,andpervasivedemandsforinformalpaymentsandbribesraisecosts,incentivizesmugglingandinformality,anddepressproductivity.Thislimitstheexpansionofbusinessesandthecountry’sgrowthpotential.

Macroeconomicstabilizationremainsthecentralpriorityasthenewadministrationfacesdifficultchoices,whilemanaginggrowingpublicpressurefollowingtaxincreasesandpriceadjustments.

Thegovernmenthasinitiatedlong-overduereformstorestorespendingdiscipline,increaserevenues,reprofiledomesticdebt,andrestorepolicydiscipline.However,fiscalandexternalimbalancesremainlarge.Despitesomeprogress,thechallengesofhighborrowing,highrecurrentspendingonrigidexpen-ditures,weakexportearnings,andconstrainedprivateinvestmentremainlargelyunresolved.Inturn,morewillneedtobedonetoadvancethenecessarymacro-fiscalandstructuralreformsthatcanbol-sterinvestment,supportexports,createjobsandenablethehigherlevelsofeconomicgrowthneededtoachievetheaimssetoutinMalawi2063.

EconomicDevelopments10

Persistentfiscaldeficitsandhighdomesticborrowinghavepushedpublicdebttounsustainablelevelsandcrowdedoutprivateinvestment

Malawi’sfiscalpositionhasdeterioratedsharplyinrecentyears.Since2022,fiscaldeficits,drivenbyrigidexpendituressuchaspublicsectorwagesandinterestpayments,haveaveraged10.9percentofGDP,rankingamongthelargestinSub-SaharanAfrica.Thiscontrastswiththe2.9percentofGDPrecordedonaverageover2010–2019,aperformancethatexceededmostregionalpeersandbroadlyalignedwiththeSADCconvergencetargetofnomorethan3.0percent.Regionalexperience,includ-inginLesotho,Eswatini,EquatorialGuinea,theDemocraticRepublicofCongo(DRC),andMalawi’sownhistoryshowthatrestoringfiscalsustainabilityisachievable.Strongerexpenditurecontrolsandrevenuemeasures,underpinnedbypolicyconsistencyandcredibleadjustmenteforts,canreestablishsoundfiscalmanagement.

Persistentlylargefiscaldeficitshavedrivenuppublicdebt,crowdedoutsocialanddevelopmentspending,andreducedtheavailabilityofcredittotheprivatesector.Heavyrelianceondomesticborrowingatelevatedinterestratesdivertsbanklendingfrombusinessestogovernment.Nearlyhalfofalldomesticrevenuegoestowardinterestpayments,squeezingfundingforessentialservicesandpublicinvestment.Theauthoritieshavemadenotableprogresstowardcompletingtherestructuringofbilateraldebt,butprioritynowliesinconcludingnegotiationsonexternalcommercialdebt,andreprofilingdomesticdebttolowerinterestcosts.

Whilethebankingsector’sheadlineperformanceremainsstrong,lendingpatternsrevealstructur-alweaknesses.Profitabilityhasimproved,largelyduetostrongdemandforhigh-yieldgovernmentse-curitiesthatdominatebankportfoliosrelativetoprivate-sectorcredit—thoughthisconcentrationofassetsisalsoasourceofvulnerability.Withinterestmarginsrisinganddecliningnon-interestexpens-es,keyprofitabilityindicatorssuchasreturnonassets(7.7percent)andreturnonequity(60.9per-cent)strengthenedthrough2025andremainamongthehighestintheregion.Concurrentdeclinesinnon-performingloans(whichmakeup4.6percentoftotalloans)andstrongerprovisioningsignalen-hancedbalance-sheetquality.Althoughcreditallocationtomanufacturingincreasedduring2025,over-allaccesstoafordablecreditremainshighlyconstrained.Thelimiteddepthofprivates