Navigating Malawi’s Trade Gap: Opportunities for Growth and Economic Resurgence

Key Business Points

• Malawi’s trade deficit has widened to $2.44 billion between January and November 2025, up from $2.32 billion during the same period last year, posing a significant challenge to the country’s economy.
• The country’s total imports have increased by 2 percent to $3.33 billion, while total exports have declined by 6.5 percent to $885.85 million, highlighting the need for diversification of export products and stimulation of production.
• Economists warn that the growing trade imbalance poses sustained pressure on foreign exchange availability and exposes the economy to external shocks, emphasizing the importance of import substitution and making capital available to support local production.

The latest trade statistics from the National Statistical Office have revealed a worrying trend for Malawi’s business community, with the trade deficit continuing to widen. The country’s total imports have reached $3.33 billion between January and November 2025, representing a 2 percent increase from the previous year. In contrast, total exports have declined to $885.85 million, marking a 6.5 percent drop. This decline in exports is largely due to the country’s narrow export base, which is heavily reliant on primary commodities such as tobacco. As economist Veli Nyirongo noted, "Export earnings remain narrowly concentrated in a few primary commodities, with tobacco dominating receipts."

The statistics also show a consistent pattern of growing trade imbalance in recent years, with the trade deficit standing at $2.1 billion in 2022, rising to $2.18 billion in 2023, and reaching $2.32 billion in 2024. This trend is zịchikula (concerning) for local businesses, as it poses sustained pressure on foreign exchange availability and exposes the economy to external shocks. As Nyirongo emphasized, "The overall impression from the trade performance is one of growing structural imbalance rather than temporary weakness."

To address this challenge, economists such as Maurry Siyasiya recommend stimulating production by making capital available and resorting to import substitution on some items, such as fertiliser. This approach can help kutengera kwa zana (enhance competitiveness) and reduce the country’s reliance on external markets. Furthermore, the government has acknowledged the need to diversify the export base and improve the reserve position, as highlighted by Minister of Finance Joseph Mwanamvekha in the Mid-year Budget Review Statement.

In the short term, businesses can explore opportunities for import substitution and export diversification, while also advocating for policy reforms that support local production and trade. As the economy continues to evolve, it is essential for businesses to stay informed about zithunzi za uchumi (economic trends) and adapt to changing market conditions. By doing so, they can kugwira ntchito (create opportunities) for growth and development, despite the challenges posed by the widening trade deficit.

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