Manufacturing sector expected to grow as Malawi’s key industries show signs of recovery

Malawi’s manufacturing sector is expected to grow this year, bringing fresh hope for jobs, production and economic activity across the country. According to the 2026 Annual Economic Report by the Ministry of Finance, Economic Planning and Decentralisation, the sector is projected to grow by 2.5 percent in 2026, up from 1.8 percent in 2025. The report further predicts that growth could reach 4.7 percent by 2027 if the current momentum continues.

Manufacturing is one of the four key sectors the government is focusing on to grow the economy under the ATMM strategy—Agriculture, Tourism, Mining and Manufacturing. The ministry says the expected growth in manufacturing will largely be supported by improvements in agriculture, which provides many of the raw materials used by factories. Large-scale farming investments and expanded irrigation are expected to increase agricultural production, which in turn will supply more inputs for local industries such as food processing, beverages and other manufactured products.

The report also says improvements in the availability of foreign exchange, electricity and fuel will help factories operate more consistently and increase production. Despite these positive signs, the private sector is still facing challenges. Many companies continue to struggle to import raw materials due to limited access to foreign currency, which has slowed down production in some industries.

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The report also shows that agriculture, Malawi’s backbone sector, is beginning to recover. The sector grew by 1.3 percent in 2025, improving from a 0.2 percent decline in 2024. This recovery was mainly driven by strong performance in major export crops such as tobacco, sugar and tea.

However, growth could have been stronger if not for rising prices of farming inputs and delays in the start of rains during the 2024/25 growing season. Looking ahead, agriculture is expected to grow by 2.8 percent in 2026 and 3.8 percent in 2027 as the sector gradually recovers from climate shocks. One major development expected during this period is the establishment of a fertiliser factory, which could help reduce fertiliser prices and improve supply for farmers.

The mining sector is also projected to continue growing. It is expected to expand by 5.9 percent in 2026, up from 5.3 percent in 2025, before reaching 6 percent growth in 2027. Government is prioritising mining under its economic recovery strategy, particularly in areas such as rare earth elements, graphite and uranium, which have strong export potential.

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