What will it take for Malawi to break through?

Not surprisingly, recent data on international trade has shown that Malawi is still lagging behind its partners, exporting less and importing more in all corners. In 2025, Malawi’s trade deficit widened by 15 percent to $2.67 billion (about K4.6 trillion) from $2.2 billion (about K3.8 trillion) the previous year driven by an increase in imports and a decline in exports, according to National Statistical Office (NSO). Economists have stated that the worsening trade deficit reflects the country’s over-reliance on few export commodities, persistent underproduction and weak participation in international markets.

The NSO international merchandise trade statistics for December 2025 show that total imports were recorded at $3.6 billion (about K6.3 trillion) in 2025 from $3.2 billion (about K5.6 trillion) in 2024 while exports slightly dropped to $936.3 million (about K1.63 trillion) in 2025 from $947.2 million (about K1.65 trillion) the previous year. What has caught my eyes over the years is how the series sum up the country’s challenges through catchy and though-provoking themes. I would say that if there is one thing the World Bank has consistently gotten right through the Malawi Economic Monitor series it is the themes.

For instance, the 22nd edition launched on Tuesday in Lilongwe was themed ‘Getting reforms right: Reversing Malawi’s export decline’ while the 20th edition in January 2025 was titled ‘The rising cost of inaction’ and its follow up in July 2025 read ‘Navigating uncertainty’. In all these assessments, issues that came to the fore included a trend of slow, incomplete and reversed macroeconomic reforms amid increasing fiscal and external deficits. Back to the report launched on Tuesday focusing on declining exports.

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Essentially, the report provided a “gentle reminder” on our challenges in this field which we have discussed for a long time, developed strategies such as the National Export Strategy (NES) but still continue to struggle. The big question that always comes to mind is: What will it take for Malawi to reverse the trend and reap more from international trade? From founding president Hastings Kamuzu Banda era’s ‘Best Buy Malawian’ campaign that sought to boost manufacturing for import substitution to Bingu wa Mutharika’s goal to transform the economy from a predominantly consuming and importing nation to a producing and exporting one and the NES later, Malawi has tried every trick in the book.

Where do we go wrong? In the assessment of the World Bank, Malawi is struggling to produce and export because of heavy reliance on rain-fed agriculture mostly for tobacco, the main export crop vulnerable to climate shocks and declining global demand. The other factors include acute shortage of foreign currency, high production costs, poor infrastructure and lack of value-added processing which restrict output.

Malawi primarily exports raw or semi-processed goods, which limits potential earnings and reduces competitiveness. For years, Malawi Government has implemented strategies aimed at stimulating local production to increase its export base while at the same time striving to cut on imports through import substitution with nothing much to show for. Earlier this month, during the swearing in of entrepreneur and retired corporate executive Simon Itaye as the new Minister of Industrialisation, Business, Trade and Tourism at Kamuzu Palace in Lilongwe, President Peter Mutharika also lamented Malawi’s failure to break into the international market.

He expressed his desire to turn this country from importing to exporting, consuming to production. What struck me in the President’s address was his recollection of a panel discussion during the UK-Africa Trade and Investment Summit in January 2020 where he said he was not excited about the African continental common market because “I have nothing to sell on that market because I don’t produce anything”. I thought the President summed it up well.

Malawi knows its problems and the challenge has often been translating the well-articulated strategies into reality to achieve desired results. The NES II launched around 2019 sought to boost the share of Malawi’s exports in the gross domestic product (GDP) to 20 percent by 2026. But today data show we are still struggling.

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