Economy of Malawi

Agriculture

Malawi's most important export crop is tobacco, which accounted for a third (30%) of export revenue in 2012.^[16] In 2000, the country was the tenth-largest producer in the world. The country's heavy reliance on tobacco places a heavy burden on the economy as world prices decline and the international community increases pressure to limit tobacco production. Malawi's dependence on tobacco is growing, with the product jumping from 53% to 70% of export revenues between 2007 and 2008.^[17][18]

The country also relies heavily on tea, sugarcane and coffee, with these three plus tobacco making up more than 90% of Malawi's export revenue. Tea was first introduced in 1878. Most of it is grown in Mulanje and Thyolo. Other crops include cotton, corn, potatoes, and sorghum; cattle and goats are also widely reared. Tobacco and sugar processing are notable secondary industries.^[19][20]

Traditionally Malawi has been self-sufficient in its staple food, maize (corn), and during the 1980s it exported substantial quantities to its drought-stricken neighbors. Nearly 90% of the population engages in subsistence farming. Smallholder farmers produce a variety of crops, including maize, beans, rice, cassava, tobacco, and groundnuts (peanuts). Financial wealth is generally concentrated in the hands of a small elite. Malawi's manufacturing industries are situated around the city of Blantyre.^[21]

Lake Malawi and Lake Chilwa provide most of the fish for the region. For many Malawians, fish is the most important source of proteins. Dried fish is not only consumed locally, but also exported to neighboring countries. Most fishing is done on small scale by hand. However, Maldeco Fisheries owns several commercial fishing boats and operates fish farms in the southern part of Lake Malawi.

Malawi has few exploitable mineral resources. A South-African Australian consortium exploits uranium at a mine near Karonga. Coal is being extracted in Mzimba District. Malawi's economic reliance on the export of agricultural commodities renders it particularly vulnerable to external shocks such as declining terms of trade and drought. High transport costs, which can comprise over 30% of its total import bill, constitute a serious impediment to economic development and trade. Malawi must import all its fuel products. Other challenges include a paucity of skilled labor, difficulty in obtaining expatriate employment permits, bureaucratic red tape, corruption, and inadequate and deteriorating road, electricity, water, and telecommunications infrastructure which hinder economic development in Malawi. However, recent government initiatives targeting improvements in the road infrastructure, together with private sector participation in railroad and telecommunications, have begun to render the investment environment more attractive.

The following are Malawi's top 20 agricultural production values and volumes for 2009. (Unofficial figures derived from FAO statistics) ^[22]

Key: F: FAO estimate, Im: FAO data based on imputation methodology, P: Provisional official data.

Food and beverages

Most fruits and vegetables are exported raw, while processed food is imported mainly from South Africa. Carlsberg opened its first brewery outside of Denmark in Blantyre in 1965. The brewery also bottles Coca-Cola products under licence. A mango processing plant for the export of fruit concentrate opened in Salima in 2013. Universal Industries operates several food factories in Blantyre, where it produces sweets, crisps, biscuits, milk powder, soy products and baby food. Coffee and tea are processed by half a dozen of different companies in the regions of Thyolo, Mulanje and around Mzuzu.

Forestry

Large man-made pine tree forests are located in the Viphya Mountains, around Mulanje and Zomba. Timber production for building materials and furniture is an important industry for these regions. However, most areas in Malawi suffer from deforestation due to illegal logging for charcoal production and the use of firewood.

Electricity

Malawi's sole power supplier is the state owned Electricity Supply Commission of Malawi (ESCOM), which generates almost all its power from hydroelectric plants along the Shire River whose installed capacity is approximately 351MW.^[23] About 15.6% of the country's population has access to electricity, according to 2023 World Bank figures.^[24]

In 2017 the country suffered from intermittent power outages as a result of an ongoing drought that halved power output as water levels of the Shire River dropped significantly.^[25] The river usually generates 300MW of electricity, accounting for 98% of Malawi's total supply. However, the drought reduced that capacity to 160MW, according to ESCOM.^[25]

Services

The service sector accounts for 51.7% of Malawi's national GDP. Notable industries are tourism, retail, transport, education, health services, telecommunication and the banking sector. The Government of Malawi holds shares in many important companies, such as Malawian Airlines (51%) and Press Corporation Limited. Press Corporation Ltd. is the country's biggest company, with subsidiaries in the tobacco, banking, sugar, fishing, ethanol production, steel production, retail, telecommunication and petrol sectors.

• 
  Roadside vendor in Blantyre.
• 
  Market in Lilongwe.

Pharmaceutical companies

Malawi has four pharmaceutical companies. They manufacture a limited range of drugs, particularly those that are in great demand on the local market.^[26] These are Pharmanova Ltd.,^[26] which is the biggest pharmaceutical manufacturer in Malawi, followed by SADM, Malawi Pharmacies (Pharmaceuticals Limited) and Kentam Products Limited.^[26]