Revitalizing Malawi’s Economy: Ecam Proposes Tax Incentives to Spur Job Creation and Stimulate Growth

Key Business Points

• Rising youth unemployment poses serious economic and social risks, and the Employers’ Consultative Association of Malawi (Ecam) is urging government to introduce tax incentives to encourage job creation for young people.
• Ecam is proposing public-private partnerships to expand internship placements and workplace training programmes, which could help equip young people with practical skills demanded by the labour market.
• Fiscal realities and structural weaknesses in the economy must be considered when implementing these proposals, as more than 90 percent of the labour force is engaged in seasonal, high-turnover jobs and 41 to 43 percent of youths are not in employment, education or training.

The Employers’ Consultative Association of Malawi (Ecam) has warned that youth unemployment is a pressing issue that requires immediate attention from the government and the private sector. In its 2026-27 pre-budget proposals, Ecam called for targeted fiscal and policy measures to encourage the private sector to absorb more youths into employment, internship, and apprenticeship programmes. Executive Director George Khakhi proposed that government should offer tax incentives to companies that employ a specified proportion of young people or provide structured internship and apprenticeship opportunities. This, he said, will encourage industry to employ more young people and provide on-the-job training that equips them with practical skills demanded by the labour market, thereby improving their employability.

Ecam also called for the establishment of a public-private partnership framework under which it and its members would work with government to expand internship placements and workplace training programmes. Under this arrangement, government would provide stipends for interns while the private sector offers training and supervision. However, Khakhi warned that without structured pathways into work, high youth unemployment risks fuelling frustration and social instability. As he put it, "The industry is willing to partner with government in providing employment opportunities for the youth. But businesses face barriers such as high operational costs and limited incentives, which constrain their capacity to create jobs."

Economist Marvin Banda described the proposals as noble and timely but cautioned that implementation must consider fiscal realities and structural weaknesses in the economy. He noted that more than half of Malawi’s population is aged 18 or below, while the Human Capital Index stands at about 0.41 to 0.46, indicating significant potential but no systematic mechanism to efficiently allocate human capital. Banda said that more than 90 percent of the labour force is engaged in seasonal, high-turnover jobs and that 41 to 43 percent of youths aged 18 to 35 are not in employment, education or training. He cautioned that the proposals carry fiscal implications at a time when government is trying to contain expenditure amid a wage bill exceeding K1.3 trillion.

Banda emphasized the need to leverage institutions such as Teveta within a robust public-private partnership framework. He said, "The private sector is itself capable of employing, training and paying trainees and apprentices. There is need to leverage institutions such as Teveta within a robust PPP framework." This approach could help address the issue of youth unemployment and promote economic growth in Malawi. As zinthu zina zikukonzedwa, or "things are being done," to address this issue, business owners and entrepreneurs should be aware of the potential opportunities and challenges that lie ahead. By working together, government, the private sector, and other stakeholders can create a more favourable business environment that supports job creation and economic growth, ultimately contributing to malawi wathu, or "our Malawi," and its development.

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