Malawi’s Economic Destiny: Threats to Growth Exposed – A Call to Action for Business Leaders

Key Business Points

• Formalise and digitise to reduce informality and boost economic growth, with potential tax revenue increases of up to 40 percent.
• Leverage digital financial services to increase efficiency, accessibility, and interoperability, with transaction volumes increasing by 38.8 percent in 2024.
• Address the digital divide by improving equal access to affordable internet, devices, and digital skills to ensure inclusive growth and financial inclusion.

Malawi’s economy is facing a significant obstacle to development, with the Reserve Bank of Malawi (RBM) Governor Macdonald Mafuta Mwale identifying informality as the biggest challenge. To address this, Mwale is calling for urgent digitisation to formalise the economy, which he believes is crucial for connecting with the digital economy. Formalisation through digitisation has the potential to increase tax revenue by up to 40 percent, making it a key strategy for economic growth.

The Bank’s Governor emphasized that no country can develop with the level of informality currently existing in Malawi’s economy, and that reducing informality is essential for growth. The transformative impact of digital financial services was evident in 2024, with transaction volumes increasing by 38.8 percent to 1.97 billion transactions, with a total value of K187 trillion. This points to a maturing digital financial ecosystem that is more efficient, accessible, interoperable, safe, and trusted.

Digital financial services recorded 1.92 billion transactions, up from 1.3 billion in 2023, with transaction values increasing by 73.7 percent. Mobile money subscriptions have risen by 27.6 percent to reach 16.2 million users, enabling the financial inclusion rate to reach 83.3 percent of the population. The Malawi Interbank Transfer and Settlement System (MITAS) has processed K128 trillion in value, representing 68.6 percent of total transactions.

However, challenges remain, particularly the digital divide caused by unequal access to affordable internet, devices, and digital skills. To address this, the ICT Association of Malawi is dedicated to playing a pivotal role in turning around the economy by working hand-in-hand with the government and the private sector. The three-day 2025 International ICT Expo in Lilongwe, themed ‘Accelerating Malawi’s Digital Economy: Innovation, Inclusion and Sustainable Growth’, directly aligns with the Malawi Digital Economy Strategy (2021- 26), and provides a platform for industry, government, development partners, academia, and the public to converge and shape a future-ready digital Malawi.

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