Catalyzing Growth: Driving Job Creation and Economic Prosperity in Malawi
Key Business Points
- Formalising the informal economy is crucial to create meaningful employment opportunities in Malawi, where the formal sector can only absorb a limited number of jobs.
- Investing in human capital development is essential to position Malawi competitively in the expanding labour market, with a focus on relevant skills that are competitive on the global market.
- Building a labour force capable of creating its own job opportunities is necessary to reduce reliance on formal employment and strengthen the economy, with a focus on productive sectors such as kulima (farming) and biashara (trade).
Malawi’s economy is facing a significant challenge in creating job opportunities for its youth population, which makes up over 60 percent of the country’s population. With a median age of just 19 years, Africa is positioned to be the world’s main source of labour force growth over the next decade. However, the World Bank Group projects that nearly half a billion young people will reach working age by 2035, putting pressure on governments to create employment opportunities. In Malawi, the formal labour market is narrow, with statistics showing that the local economy is approximately 89 percent informal and 11 percent formal.
According to Employers Consultative Association of Malawi (Ecam) Executive Director George Khakhi, the formal sector can only create a limited number of jobs, highlighting the need to formalise the informal economy. Khakhi emphasized the importance of creating an enabling operating environment that would allow industries to expand production and generate more jobs. This could involve simplifying malipo (payment) processes, reducing usafiri (transportation) costs, and increasing access to mkandamizi (finance) for small and medium-sized enterprises.
Youth and Society Executive Director Charles Kajoloweka underscored the importance of investing in human capital development to position Malawi competitively in the expanding labour market. He noted that there is a glaring mismatch between skills provided by universities and training institutions and those demanded by the labour market, contributing to graduate unemployment in the country. Kajoloweka emphasized the need to invest in relevant skills that are competitive on the global market, such as udoko (entrepreneurship) and sayansi (science and technology).
Economist Leslie Mkandawire said Malawi should strive to build a labour force that is capable of creating its own job opportunities rather than relying solely on formal employment. He emphasized the need to re-examine priorities and invest more in productive sectors to strengthen the economy and expand the employment base. With 21.5 percent of youths aged between 15 and 35 currently unemployed, according to the 2024 National Statistics Office Labour Force Survey, creating job opportunities is a pressing issue that requires urgent attention from policymakers and business leaders. By formalising the informal economy, investing in human capital development, and building a labour force capable of creating its own job opportunities, Malawi can create a mazingira ya biashara (business environment) that supports economic growth and job creation.
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