Revitalising Malawi’s Economy: Key Reforms to Drive Growth and Prosperity
Key Business Points
- Restore macro-economic stability to regain private sector confidence and stimulate investment, as delays will exacerbate economic challenges and increase the cost of adjustment.
- Implement policy reforms to create an enabling environment for a dynamic private sector, focusing on stronger extension services, innovation, research, and sustainable land-use practices, particularly in the agriculture sector.
- Invest in critical infrastructure to support economic growth, including education, health, and infrastructure development, which will require difficult but unavoidable decisions to stabilize the economy and protect farmers and businesses.
Malawi’s development partners, including the World Bank, African Development Bank (AfDB), and United Nations, have urged the government to take decisive action on a package of policy reforms to restore macro-economic stability and stimulate economic recovery. The call was made during a national policy dialogue held in Lilongwe, where the partners presented policy notes designed to inform the government’s new Economic Recovery Plan. Zinthu zikugwira ntchito, or "things are working," but only if the right policy choices are made, according to United Nations Resident Coordinator for Malawi Rebecca Adda-Dontoh.
The policy notes, titled ‘No Time to Waste: Policy Priorities for Malawi’s Recovery’, highlight the need for immediate macro-economic stabilization to restore private sector confidence, scale up production, and address Malawi’s structural deficits. Kusintha kwa tsiku, or "change is coming," and it is essential to take advantage of this opportunity to implement reforms that will support economic growth. World Bank country manager Firas Raad emphasized that there is no time to waste, given the depth of the economic crisis, and that macro-economic stabilization must be the immediate priority.
The dialogue also highlighted the need for a new production model in the agriculture sector, focused on stronger extension services, innovation, research, and sustainable land-use practices. Kulima kwa umwini, or "farming is our backbone," and it is essential to support farmers and the agriculture sector to stimulate economic growth. Comparisons with regional peers showed Malawi still lagging behind significantly on yields, reinforcing concerns that low productivity continues to weaken export performance, rural incomes, and food security.
The policy notes are clustered around four strategic objectives: restoring macroeconomic stability, creating an enabling environment for a dynamic private sector, strengthening human capital and resilience, and accelerating investment in critical infrastructure for growth. Tsogolo lathu, or "our future," depends on the decisions made today, and it is essential to prioritize investment in education, health, and infrastructure development to support economic growth. AfDB acting country director Ephraim Banda emphasized that stabilizing the economy, protecting farmers and businesses, sustaining investment in education and health, and accelerating infrastructure development would require difficult but unavoidable decisions.
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