Unctad cries for weak economies

Revitalizing Malawi’s Economic Prospects: A Call to Action for Business Growth and Investment

Post was last updated: June 7, 2025

Key Business Points

  • Minimize Tariff Burden: Malawi’s business community should prioritize minimizing the impact of US tariffs to avoid disrupting trade flows and maintaining market access.
  • Diversify Export Markets: Companies should consider diversifying their export markets to reduce reliance on a single market, such as the US, and increase competitiveness.
  • Improve Product Quality: Enhancing product quality, as mentioned by Minister Sam Kawale, can increase access to other markets and reduce dependence on the US market.

The United Nations on Trade and Development (Unctad) hashighlighted the need for policymakers to re-evaluate US tariffs to safeguard sustainable development and avoid further economic instability. The US has substantially increased its import tariffs for all trading partners, with a universal 10 percent additional tariff on all imports, effective April 5, 2025. This move is expected to disproportionately affect vulnerable economies, including Malawi, which could potentially remit $7 million (about K12.3 billion) in custom duties annually.

Malawi’s exports to the US comprise mostly agricultural products such as tobacco, sugar, tea, and nuts. However, with the new tariff regime, these exports may face higher trade barriers, making it more difficult for Malawian companies to remain competitive. Illovo Sugar (Malawi) plc, for instance, has indicated that the new tariff regime will significantly impact the market price of sugar due to the higher landed cost resulting from the increased tariff.

The Unctad analysis, "Mapping the size of new US tariffs for Developing Countries," emphasizes that vulnerable economies are set to pay the highest price for new US tariffs. The report notes that dozens of vulnerable economies, including Malawi, are expected to lose competitiveness in the US market, particularly in key sectors like textiles and agriculture. Diversifying export markets and improving product quality can help mitigate the effects of these tariffs and increase access to other markets.

As Malawi’s business community navigates these challenges, it is essential to prioritize minimizing the tariff burden, diversifying export markets, and improving product quality. By doing so, Malawian companies can increase their competitiveness and reduce dependence on a single market, ultimately contributing to the country’s economic growth and development. With the right strategies in place, Malawi can capitalize on investment opportunities and drive sustainable development, ensuring a brighter future for local entrepreneurs and businesses.

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Vanessa Banda
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