Diversifying Malawi’s Economy: Breaking the Commodity Chain to Fuel Growth and Prosperity

Post was last updated: August 6, 2025

Key Business Points

  • Diversification is crucial: Malawi’s economy remains heavily dependent on commodity exports, with 91% of its merchandise exports consisting of primary products, highlighting the need for a diversified export base to mitigate risks from external shocks.
  • Export strategy implementation: The government’s National Export Strategy (NES 2021/26) and Buy Malawi Strategy aim to promote export diversification and manufacturing of ‘Made in Malawi’ products, but their implementation and effectiveness are yet to be fully realized.
  • Market exploration opportunities: Malawi’s participation in regional blocs such as the African Continental Free Trade Area and the Southern African Development Community presents opportunities for businesses to explore new markets for value-added products, which can help reduce the country’s reliance on commodity exports.

Malawi’s economy faces significant challenges due to its overdependence on commodity exports, with the country’s merchandise exports shrinking from $1.3 billion in 2014 to $958 million between 2021 and 2023. The United Nations Conference on Trade and Development (Unctad) data shows that commodity exports constituted $868.5 million, with agricultural products making up 89.5% of this total, and tobacco being the leading export at 45.3%. This lack of diversification raises concerns about the country’s vulnerability to external shocks, such as fluctuations in global commodity prices.

The World Bank projects that global commodity prices will decline by 12% in 2025 and a further 5% in 2026, which could weaken the economic prospects of many developing countries, including Malawi. According to Scotland-based Malawian economist Velli Nyirongo, lower revenues from agricultural and mineral exports will reduce foreign exchange earnings and widen the current account deficit, potentially delaying the government’s ambition to diversify exports through mineral development.

To address these challenges, the government has formulated strategies such as the Malawi National Export Strategy (NES 2021/26) and the Buy Malawi Strategy, which aim to promote export diversification and manufacturing of ‘Made in Malawi’ products. Additionally, Malawi’s participation in regional blocs such as the African Continental Free Trade Area and the Southern African Development Community presents opportunities for businesses to explore new markets for value-added products. The Ministry of Trade and Industry spokesperson, Patrick Botha, has highlighted the importance of regional integration in increasing exports of ‘Made in Malawi’ goods to regional and global markets.

The launch of NES II in 2021 aims to achieve export competitiveness by increasing the production and export of ‘Made in Malawi’ products, particularly in regional markets. As zinthu zokwana za malawi (Made in Malawi products) become more competitive, businesses can take advantage of these initiatives to thamangitsa malonda (diversify markets) and reduce the country’s reliance on commodity exports. By doing so, Malawi can promote kulimbikitsa kwa mawu (industrial development) and improve its fiscal stability, ultimately leading to tsoka lomwe lili pakhomo (prosperity in the country).

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Vanessa Banda
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