Driving Business Resilience in Malawi Amidst the Forex Crisis

Post was last updated: August 1, 2026

Key Business Points

  • Prioritise export diversification to boost foreign exchange earnings
  • Implement phased exchange rate adjustments to protect local traders
  • Strengthen production capacity and supply side policies before devaluing

The Economics Association of Malawi Ecama recently warned that exchange rate adjustments alone cannot solve the nation’s persistent foreign exchange shortages unless they are paired with reforms that expand production and diversify exports. In a written response to a questionnaire Ecama president Bertha Bangara-Chikadza observed that repeated devaluations have failed to improve the trade balance because Malawi lacks the productive capacity to increase exports while remaining dependent on essential imports. She said “Without addressing the structural export challenge the country risks remaining in a perpetual cycle of devaluations that delivers little economic benefit.” Her caution aligns with research from Phiri of the Malawi Economic Justice Network which indicates that a ten percent depreciation of the kwacha can lift non food inflation by three to five percent within twelve months. Bangara-Chikadza told policymakers that export strategies have consistently missed their targets; the first National Export Strategy aimed for 2.7 billion USD in new exports by 2018 but actual earnings fell from 1.2 billion to 879 million USD and exports represented only ten point six percent of gross domestic product in 2025 against a National Export Strategy II target of twenty percent. The Confederation of Chambers of Commerce and Industry has been urging a phased exchange rate realignment arguing that the widening gap between official and parallel market rates has worsened forex scarcity. According to the chamber eighty eight point two percent of businesses listed foreign exchange scarcity as their biggest challenge in the first half of 2026. Prior to securing the previous Extended Credit Facility with the International Monetary Fund in November 2023 Malawi devalued the kwacha twice; first by twenty five percent in May 2022 and then by forty four percent in November 2023. Malawi is now discussing a new ECF with the IMF and Finance Minister Joseph Mwanamvekha has assured that any new conditions will prioritise measures that do not hurt the masses already struggling with a high cost of living. For local entrepreneurs this means that growth opportunities may emerge when export performance improves, when financing becomes more accessible, and when market reforms reduce bottlenecks. In particular sectors such as agriculture processing, renewable energy, and tourism show strong potential for value adding and job creation if supply chains are strengthened and if investors can confidently repatriate returns. Business leaders are therefore encouraged to explore partnerships that enhance product quality, to seek financing through emerging micro finance schemes, and to engage with trade associations that lobby for policy stability. The message from Ecama and the chambers is clear: structural reforms that unlock productive capacity and diversify the export base. Only then will Malawian firms be able to compete regionally and attract the investment needed for long term prosperity

Entrepreneurs should also watch for upcoming tenders in the agricultural inputs sector which the Ministry of Agriculture plans to launch in the next quarter. Engaging early can secure preferential access to subsidised seed and fertilizer packages and open channels for export contracts with regional buyers. Leveraging these openings can accelerate growth and reinforce the country’s push toward a more resilient economic foundation. These measures will empower merchants and boost sustainable future growth

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Vanessa Banda
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