Malawi Forestry Investment Opportunities

Key Business Points

• Malawi is seeking private investors for a decade long forestry turnaround while public funding stays weak.
• Forestry exports have dropped. Export permits fell by about 44 percent between 2022 and 2025 while licences stayed stable.
• Funding and tax rules are blocking growth. Investors should study plantations, sawmills, processing and tax incentives.

Malawi is seeking private sector investors to help finance a decade long forestry turnaround. The government budget releases averaged just 40 percent of planned allocations over the past five years, it has emerged. The Draft Malawi Forestry Sector Turnaround Strategy 2026/36 shows that inadequate funding has constrained forest protection, plantation development, research and law enforcement. The country continues to lose 11,565 hectares of forest annually. In the 2024/25 financial year, the Department of Forestry received 30 percent of its approved budget requirement.

Business Review calculations show that in the past five years to 2022, the number of export permits fell by about 44 percent between 2022 and 2025 while the number of export licences remained stable. Treasury data show that in 2025, the government issued 38 export licences and 478 export permits to various exporters, including Raiply Malawi Limited, Vizara Timber Plantations and other small scale exporters. In 2022, the sector issued 37 licences and 858 permits. Exports went to South Africa, Tanzania, Zambia, Mozambique and Kenya.

The draft strategy has identified commercial plantations, replanting and tree nurseries as investment opportunities. It also sees timber processing, modern sawmills, furniture manufacturing, bamboo processing and other wood based industries. These could create jobs and increase value addition.

Minister of Natural Resources Patricia Wiskes said the strategy recognises forests not merely as natural ecosystems, but as strategic national assets and natural capital. She said: “Malawi’s forests are among our nation’s most valuable natural assets. Their contribution to national development extends far beyond the forestry sector, making them indispensable to the realisation of Malawi 2063 (MW2063) and broader aspirations for sustainable economic growth and environmental stewardship.”

The ministry concedes that forestry has not fully capitalised on emerging financing opportunities such as climate finance, carbon markets, biodiversity finance, payments for ecosystem services, green bonds and blended finance. At the same time, existing taxation policies, including VAT on specialised forestry machinery and equipment, have further discouraged investment in commercial forestry and plantation developments.

In its policy brief, Mwapata Institute said tax policies on forestry products are discouraging local and international investors. Researcher Maggie Munthali recommended a conducive policy and regulatory environment to increase private sector investment through fiscal instruments such as VAT exemptions and tax breaks.

The strategy covers 2026 to 2036 and aligns with Malawi 2063, First 10 Year Implementation Plan, Sustainable Development Goals, Paris Agreement and Kunming Montreal Global Biodiversity Framework.

For local entrepreneurs, the message is clear: this is about chuma, not just trees. The private sector can enter through commercial plantations, replanting, tree nurseries, timber processing, modern sawmills, furniture manufacturing, bamboo processing or wood based industries. Success will depend on reliable funding, tax relief, export clarity and access to climate finance. The ministry has named these areas as priority. The draft strategy gives a long term view, while budget gaps remain. Businesses should track the final strategy, tax proposals and financing deals. They should also watch export rules and market demand in existing and new forestry markets.

For those with capital, the opening is to consider sustainable forestry projects that meet national goals and create jobs.

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