The country’s industrial output registered a 14.4 percent decline in 2024 amid foreign exchange scarcity that induced production cuts, a Malawi Government report shows.
The drop is in sharp contrast to the 17 percent increase recorded during the same period between 2022 and 2023, according to the Malawi Government Annual Economic Report 2025.
In the review year, the manufacturing sector output dropped by 9.3 percent while utilities suffered a significant drop of 38.2 percent.
Reads the report in part: “All manufacturing sub-sectors experienced declines, except for the production of beverages, tobacco products, and rubber and plastics, which experienced an increase of 2.4 percent, 14.9 percent, and 21.5 percent, respectively.”
The report further says despite a tough start in 2024, the first half of the year suggested a gradual stabilisation and recovery in industrial production, but overall, the situation remained volatile.
It says from January to May 2024, industrial production showed substantial volatility, with severe declines followed by rebounds.
“After a sharp drop in January, the economy experienced a recovery in February, though it faced another downturn in March. However, by April, it began to stabilize, and by May, further improvements were observed,” reads the report.
The report, which indicate that manufacturing sector grew by 0.3 percent in 2024, is, however, optimistic of a rebound in 2025 with an initial growth forecast of 3.9 percent.
Economics Association of Malawi president Bertha Bangara Chikadza said in an interview that the 3.9 percent growth projection is overly optimistic considering the sector’s historic stagnant growth due to persistent forex shortages, among others.
She said based on the historical performance of the manufacturing sector, which grew by 0.1 percent in 2023 and is projected to have grown by 0.3 percent in 2024, the 2025 projection seems overly optimistic.
Said Bangara Chikadza: “This is because most manufacturing firms rely on the imports of raw materials for their production which is currently constrained by foreign exchange scarcity.”
Economist Bond Mtembezeka said in an interview that limited access to credit extended to the private sector, which has historically been skewed against the manufacturing sector, might have prevented the sector from accessing credit during acute forex scarcity.
“Manufacturers import raw materials and to do that they also rely on the lines of credit,” he said.
In an earlier interview, economist Dalitso Kubalasa urged local authorities to ensure that there is more financing going to the manufacturing and agricultural sectors to revitalise the ailing economy.
Malawi Confederation of Chambers of Commerce and Industry earlier said scarcity of forex is one of the most pressing challenges affecting the manufacturing sector.
Speaking during the Second Annual Manufacturing Conference in Blantyre, MCCCI councillor and Press Cane chief executive officer Bryson Mkhomaanthu said the unavailability of foreign exchange has hampered the sector’s ability to import essential raw materials.
