Key Business Points
- Malawi has sufficient domestic capital to support economic recovery, but investment will remain locked in government securities unless credible reforms are implemented, according to the Malawi Confederation of Chambers of Commerce and Industry (MCCCI).
- Local investors prefer government instruments such as Treasury bills and Treasury notes, which offer higher and more predictable returns, rather than investing in production due to unattractive risk-return dynamics.
- Restoring macroeconomic stability and improving State-owned enterprises performance are essential to reviving growth, creating jobs, and easing fiscal pressure, as highlighted in the policy note titled ‘No time to waste: Policy priorities for Malawi’s recovery’.
The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has emphasized the need for credible reforms to unlock domestic capital and support economic recovery. According to MCCCI chief executive officer Daisy Kambalame, capital is already available domestically, but is being channelled away from production due to unattractive risk-return dynamics. Zikomo kwambiri, local investors are preferring government instruments such as Treasury bills and Treasury notes, which offer higher and more predictable returns. This has resulted in most firms operating below capacity, with the MCCCI Third Quarter Business Climate Survey finding that companies are running at less than 70 percent efficiency over the past year.
The World Bank country manager for Malawi, Firas Raad, presented a report that highlighted structural weaknesses in the financial system, which continue to constrain private sector investment and undermine competitiveness. Kusamala kwambiri, nearly 80 percent of domestic credit is absorbed by government borrowing, crowding out financing for the private sector and leaving businesses reliant on costly short-term loans. The report also noted that elevated inflation, foreign exchange distortions, and surrender requirements continue to deter investors and exporters.
Nico Capital Limited chief executive officer Misheck Esau emphasized that private investors would be willing to support priority sectors such as energy and infrastructure, but inefficiencies in State-owned enterprises remain a major deterrent. Tikukhuzire bizinesi, efficiency and governance discipline are critical, and investors need to have confidence that resources are being protected and managed professionally. The policy note argues that restoring macroeconomic stability, improving State-owned enterprises performance, and creating an enabling environment for private enterprise are essential to reviving growth, creating jobs, and easing fiscal pressure.
The debate comes at a time when the government faces limited fiscal space, leaving private capital as a critical, but currently underutilised engine for economic recovery. As Malawi kukhala na mpango, the country needs to have a plan to unlock domestic capital and support economic recovery. The MCCCI and other stakeholders are calling for credible reforms to address governance weaknesses and create investment models suited to Malawi’s economic context. By doing so, the country can unlock its potential and achieve sustainable economic growth.
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