Key Business Points
- SMEs in Malawi remain cautiously optimistic about 2026 despite facing significant challenges in 2025, including foreign exchange shortages and high inflation.
- Improved policy coordination and targeted support to productive sectors, such as agro-processing and light manufacturing, could create a more enabling environment for SME growth.
- Access to affordable finance and forex allocation are key areas that need to be prioritized to support SME development and business continuity.
The National Association of Business Women (NABW) and the SME Chamber have expressed cautious optimism about the outlook for small and medium enterprises (SMEs) in Malawi in 2026. Despite a challenging 2025, SMEs have demonstrated resilience by exploring local sourcing, import substitution, and value addition, particularly in agro-processing and light manufacturing. The enactment of the MSME Bill has also provided a boost to the SME ecosystem, strengthening advocacy, collaboration, and networking.
According to NABW Executive Director Barbara Banda, foreign exchange shortages were a significant challenge for SMEs in 2025, particularly those dependent on imported raw materials and merchandise. High inflation also pushed up prices of both imported and locally sourced inputs, further constraining SMEs. However, many SMEs have embraced digital platforms for marketing and sales, and some have leveraged associations and cooperatives for collective procurement and market access.
The SME Chamber’s Executive Director, James Chiutsi, is hopeful that good harvests and improved forex availability in 2026 will support SME growth. He also expects the Micro, Small and Medium Enterprises Bill to be fully recognized by the government and other players, leading to improved access to finance. The chamber plans to work with universities and other centers of higher learning to fabricate machinery and pursue import substitution, addressing equipment and machinery shortages.
To support SME development, prioritizing SMEs in forex allocation, expanding access to affordable finance, stabilizing the macroeconomic environment, and strengthening structured public-private dialogue are essential. As Chiutsi noted, skills development, particularly in specialized sectors like mining and artificial intelligence, is also crucial. By addressing these challenges and leveraging opportunities, SMEs in Malawi can thrive and contribute to the country’s economic growth, creating a more enabling environment for business continuity and development. Kusintha kwa mafuko, or "thinking outside the box," will be essential for SMEs to navigate the challenges and opportunities in 2026.
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