State-owned enterprises (SOEs) are steadily losing financial strength, with the value of their assets and revenues declining both in absolute terms and relative to gross domestic product (GDP), signalling a weakening role in the economy. The 2024/25 Consolidated Report for State-Owned Enterprises, released by the Ministry of Finance, Economic Planning and Decentralisation, shows that although SOEs remain critical providers of key services, their overall economic footprint continues to shrink. The report assesses the financial and operational performance of 23 commercial SOEs based on audited results for the 2024/25 financial year.
Its release follows renewed scrutiny of Malawi’s fiscal outlook after the World Bank Group warned a few weeks ago that weak governance, political interference and hidden liabilities in SOEs were undermining public finances. Dated December 2025, the report notes that while SOEs’ total assets increased marginally from K2.37 trillion in 2024 to K2.50 trillion in 2025, their share of GDP fell from 22 percent to 20 percent. “This moderation partly reflects slower asset growth relative to nominal GDP expansion, as well as the ongoing implementation of reforms within major SOEs aimed at improving operational efficiency and tightening investment portfolios,” the report states.
On the revenue side, audited results show a decline from K679.4 billion in 2024 to K561.6 billion in 2025. As a share of GDP, revenue fell from six percent to four percent. According to the report, the performance mirrors challenges related to weak demand, cost recovery and tariff adequacy—particularly in utility sectors—as well as operational disruptions in some trading SOEs.
[paywall]
The revenue decline reflects subdued demand, unpaid bills, delayed tariff adjustments in power and water utilities, and interruptions in some trading enterprises that reduced sales and service delivery. The report adds that the slowdown indicates SOEs are accumulating assets more slowly than the economy is growing, limiting their ability to support service delivery, borrowing and future investment. The ministry has identified Blantyre Water Board (BWB), Electricity Supply Corporation of Malawi (Escom) and Electricity Generation Company (Egenco) as high-risk case studies.
The country’s key utilities face elevated financial risks characterised by heavy debt burdens, liquidity stress and reliance on government support—factors that threaten service delivery. BWB is described as the worst-performing SOE and a significant fiscal risk, having recorded losses for several consecutive years, albeit with recent improvement. During the 2024/25 financial year, BWB posted a net loss of K10.2 billion, an improvement from K37.8 billion the previous year. The board 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 daily.
[/paywall]
