Revitalizing Malawi’s Economy: Navigating Forex Challenges and Policy Reforms for Sustainable Growth

Key Business Points

• Access to foreign exchange remains a challenge for Malawi’s private sector, with the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) calling for a further reduction in the mandatory surrender requirement to support businesses.
• The manufacturing sector is being prioritized for growth in the 2026/27 National Budget, with a focus on high-value products such as pharmaceuticals and fertiliser production to reduce dependence on imports and ease pressure on foreign exchange reserves.
• Tax reforms are being proposed, including a cut in excise duty on locally produced fruit wines and a review of sewer charges for bottling manufacturing companies, to stimulate growth in emerging industries and support local businesses.

The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has urged the government to revise the mandatory surrender requirement for foreign exchange further down to support businesses. Presenting the private sector’s 2026/27 National Budget input, MCCCI chief executive officer Daisy Kambalame said that despite the reduction from 30 percent to 25 percent for applicable exporters, firms are still struggling to produce at full capacity. Kuunganishanthu, or improving the business environment, is key to the country’s economic recovery, Kambalame emphasized. According to MCCCI, most businesses reported producing below their capacity, with 51.9 percent of firms reporting a capacity utilization of below 50 percent in 2025.

The MCCCI is kutenga, or prioritizing, the manufacturing sector for growth in the 2026/27 National Budget, saying this will reduce dependence on imports, expand the export base, and ease pressure on foreign exchange reserves. The chamber is advocating for focus on high-value products such as pharmaceuticals, where only four main companies operate, and fertiliser production, as Malawi imports over 90 percent of fertilisers. Supporting fertiliser production can ease the cost and scarcity of the commodity, cut import costs, enhance agricultural productivity, and boost food security, Kambalame said.

The MCCCI has also proposed nsinanjo, or tax reforms, including a cut in excise duty on locally produced fruit wines from 95 percent to 10 percent to stimulate growth in this emerging industry. The chamber has also proposed a review of 20 percent sewer charges for bottling manufacturing companies, whose operations depend heavily on water. Additionally, the MCCCI has proposed a reduction of excise tax on spirits beverages from 110 percent to 60 percent to curb smuggling.

In reaction, Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha announced a ændesheni, or crackdown, on the illegal forex market, which he says has worsened the foreign exchange crisis. Mwanamvekha said that while he knows a few firms engaged in the malpractice, he would rather have them stop than being forced to close down their operations. The minister said that addressing the gap between the parallel and official market will be critical, with the official rate at K1 751 against K3 600 on the black market. The forthcoming budget will be anchored on the Malawi 2063 First 10-Year Implementation Plan and the National Economic Recovery Plan, with continued prioritization of economic stabilization and investment in key productive sectors of agriculture, tourism, mining, and manufacturing.

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