The United Nations (UN)says Malawi’s economic transformation remains slow and constrained by deep structural weaknesses that could derail further the agenda of Malawi 2063 (MW2063), the country’s long-term development strategy.
In its recently published Common Country Analysis, the UN says despite recovery efforts, the economy is struggling with low growth, rising vulnerability and limited transformation which threaten sustainable transformation.
The analysis shows that Malawi’s economy remains structurally constrained, with negative per capita growth recorded in four of the past five years at a time economic activity continues to rely heavily on low-productivity agriculture, which employs over 80 percent of the labour force but contributes only about 22 to 25 percent of gross domestic product (GDP).
Compounding the situation is mounting fiscal pressure with public debt projected to exceed 90 percent of GDP, further shrinking government’s fiscal space and limiting investment in key growth sectors such as infrastructure, education and health.
The UN says these constraints are reflecting in development outcomes, with only about 21 percent of Sustainable Development Goals (SDGs) on track, while nearly 39 percent are deteriorating, an indication that Malawi risks falling behind on its development targets.
Reads the analysis part: “Without accelerated economic transformation, the country risks falling short of its aspiration to become a wealthy, self-reliant, industrialized upper- middle-income nation by 2063.
“Achieving MW2063 and the SDGs will require bold reforms to expand fiscal space, foster inclusive growth and build resilience against shocks.”
The UN has since singled out mining and the gradual growth of cultural and creative industries as new avenues for economic expansion although the sectors remain fragile and face risks related to weak governance, limited infrastructure and insufficient local participation.
In January 2021, the Malawi Government launched MW2063 as a successor long-term development strategy to Vision 2020 that had expired after achieving minimal targets, largely due to lack of focus.
However, five years into implementation of the first decade of MW2063, a progress report in the Malawi Government Economic and Fiscal Policy Statement 2026 on the First 10-year Implementation Plan of MW2063 (MIP-1), shows that government rolled out 87 percent of planned interventions in service of the vision, but only 40 percent are on track to meet their targets.
Ironically, Malawi’s quest to align its national budget with MW2063 is facing significant hurdles, with a UN analysis revealing glaring discrepancies between the fiscal plan and MIP-1.
Centre for Green Economy in Developing Countries global lead Velli Nyirongo said to reach middle-income status by 2063, Malawi must transform its economy through export-led growth and diversification.
“This involves moving beyond dependence on agriculture,” he said.
National Planning Commission director general Frederick Changaya was not immediately available for comment. However, appearing before the Parliamentary Cluster on Commissions, Statutory Authorities and Public Appointments last month, he asked an additional K2 billion on top of K2 billion already allocated in the proposed 2026/27 national budget to meet its mission-critical and statutory obligations.
To restore economic stability, the Government has formulated the National Economic Recovery Plan as a subset of the MIP-1.
In the 2025/26 proposed National Budget, Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha said the country’s economic outlook remains cautiously positive, with growth projected to rise to 3.8 percent in 2026 from 2.7 percent in 2025 and further strengthen to 4.9 percent in 2027.
