Malawi economic freedom weakens

For the past five years, Malawi has remained classified as a “mostly unfree” economy, with its Index of Economic Freedom score showing a downward trend over the period. The Index of Economic Freedom produced by the Heritage Foundation shows that Malawi’s score has fallen to 50.7 in 2026 from 53 in 2021, reflecting a sustained weakening in economic freedom. The decline has pushed Malawi to position 143 globally and 33 out of 47 countries in sub-Saharan Africa, leaving the country below both the regional average of 53.2 and the global average of 59.9.

In its report, Heritage Foundation argues that countries with higher economic freedom tend to have stronger economic growth, higher incomes and greater investment, while countries in the “mostly unfree” category often struggle to achieve those outcomes consistently. It said the latest ranking reflects persistent structural weaknesses that continue to weigh on business activity, investment and economic competitiveness. “The poor quality of physical and legal infrastructure exacerbated by the government’s inefficiency, has been a serious impediment to long-term economic development.” The Heritage Foundation further argued that while the inefficient business framework is slowly being improved, labour regulations are not “generally” enforced and the labour market remains poorly developed with most Malawians still employed outside the formal sector, primarily in agriculture.

In a statement accompanying the report, Heritage Foundation president Kevin Roberts is quoted as having said that economic freedom should always serve families, communities and the permanent things, ordered liberty, personal responsibility and the dignity of work. “Properly understood, economic freedom strengthens national security, nourishes civil society and improves the quality of life for all citizens. It is a cornerstone of a healthy society,” he said.

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Centre for Green Economy in Developing Countries global lead Velli Nyirongo said in an interview yesterday that efforts to reduce poverty and boost the economy are being undermined, leaving the majority of Malawians with little hope for better conditions. On his part, National Planning Commission (NPC) director general Frederick Changaya said in an interview yesterday that sustainable macroeconomic stability will come from deliberate improvements in resource allocation, productivity and structural transformation, rather than short-term policy fixes alone. The 2026 Labour Market Profile shows that Malawi’s informal employment sector has ballooned, with 93 percent of the workers now in unregulated jobs, up from 85 percent in 2013, posing risks to the country’s tax revenue and job quality.

This is more than double the Southern Africa average of 39 percent, raising fresh concerns about job quality, productivity and economic transformation. Ironcally, a Malawi 2063 First 10-Year Implementation Plan (MIP-1) analysis observed that while the Covid-19 pandemic has made the poverty fight difficult, other factors include a high population growth rate, limited access to financial services and high levels of corruption.

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