State-owned companies in Malawi are becoming weaker financially, with their assets and income falling when compared to the size of the economy. This means these companies are now playing a smaller role in supporting national development and delivering public services. This is according to the 2024/25 Consolidated Report for State-Owned Enterprises released by the Ministry of Finance, Economic Planning and Decentralisation.
The report shows that although state-owned enterprises (SOEs) remain important providers of services such as water and electricity, their overall contribution to the economy continues to shrink. The report assessed the financial and operational performance of 23 commercial SOEs using audited results for the 2024/25 financial year. Its release comes at a time when Malawi’s public finances are under pressure.
A few weeks ago, the World Bank warned that weak governance, political interference and hidden debts in SOEs are undermining the country’s economy. According to the report, total assets held by SOEs rose slightly from K2.37 trillion in 2024 to K2.50 trillion in 2025. However, their share of gross domestic product (GDP) dropped from 22 percent to 20 percent.
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This means the economy grew faster than the SOEs, reducing their importance in overall economic activity. The Ministry of Finance says this trend partly reflects slower growth in SOE assets compared to the economy, as well as ongoing reforms aimed at improving efficiency and controlling investments. On the income side, the situation is more worrying.
Total SOE revenue fell from K679.4 billion in 2024 to K561.6 billion in 2025. As a share of GDP, revenue dropped from six percent to four percent. The report says the decline is due to weak demand, customers failing to pay bills, delays in adjusting tariffs for water and electricity, and operational problems in some trading enterprises.
These challenges have reduced sales and limited service delivery. As a result, SOEs are accumulating assets more slowly and generating less income than the economy is growing, weakening their ability to fund operations, invest in infrastructure and repay debts. The government has identified Blantyre Water Board (BWB), Electricity Supply Corporation of Malawi (Escom) and Electricity Generation Company (Egenco) as the highest-risk SOEs.
These key utility companies face serious financial problems, including heavy debts, cash shortages and reliance on government support. This situation threatens the reliability of essential services such as water and electricity. Blantyre Water Board is described in the report as the worst-performing SOE and a major risk to government finances.
Although its losses have reduced, it has recorded losses for several years in a row. In the 2024/25 financial year, BWB recorded a net loss of K10.2 billion, an improvement from the K37.8 billion loss in the previous year. It also recorded losses of K20.7 billion in 2022/23 and K8.2 billion in 2021/22, despite supplying about 86 million litres of water every day.
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