SMEs bank on law to secure govt business

Harnessing Legislative Power: How Malawi’s SMEs CanTap into Lucrative Government Contracts

Post was last updated: October 21, 2025

Key Business Points

  • The new Micro, Small and Medium Enterprises (MSME) Act is set to unlock participation of small businesses in public procurement, providing a framework for their growth and development.
  • The regulations governing the law, to be implemented from April 2026, will encourage small businesses to register and obtain an SMEs certificate, positioning them for public procurement opportunities.
  • The MSME Act will strengthen the MSME sector by relieving Smedco’s role from providing business development services to regulating business development service providers, and promoting preferential treatment of SMEs in public procurement.

The Small and Medium Enterprise Development Corporation (Smedco) has welcomed the new Micro, Small and Medium Enterprises (MSME) Act, stating that it will provide the necessary framework to unlock participation of small businesses in public procurement. According to Smedco CEO Chezani Otaniele, the regulations governing the law will formalise the sector and encourage small businesses to register and obtain an SMEs certificate. This will position them as legitimate beneficiaries of public procurement, a critical driver of economic growth in Malawi, accounting for approximately 75 percent of the national budget.

The MSME Act is a significant development for Malawi’s business community, particularly small businesses, which have been facing challenges in accessing public procurement opportunities. The Act establishes Smedco as the principal institution responsible for implementing its provisions, including regulating business development service operators and business associations. Adebayo Akindeinde, leader of the Gopa Technical Assistance Team, emphasized the importance of understanding the Act and its implications for compliance.

The regulation is also expected to strengthen the MSME sector by relieving Smedco’s role from providing business development services to regulating business development service providers. Carol Chimkwita Kumakanga, Business Development Service Association interim committee vice-chairperson, noted that this will help to promote quality and impactful support to small businesses. James Chiutsi, Chamber for Small and Medium Businesses Association executive secretary, described the law as a significant step forward in supporting the growth and development of small businesses.

The MSME Act is particularly significant for women-led businesses, which have been struggling to access public sector contracts. A recent study revealed that women-led businesses access less than one percent of public sector contracts, despite women constituting 52 percent of the country’s population. The Act is expected to promote preferential treatment of SMEs in public procurement, providing opportunities for women-led businesses to participate in the economy. As zachuluka za kupanga bizinesi (business planning) and kuk zatiska za kubisa (entrepreneurship development) become more accessible, Malawi’s small businesses are poised for growth and development, driving the country’s economic growth and uchumi wa kuwизнесa (entrepreneurial economy).

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Vanessa Banda
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