The Export Development Fund (EDF) says despite registering moderate gains, Malawi’s foreign direct investments (FDIs) remain below the 10-year average and fail to show consistent momentum in attracting sustainable capital.
EDF analysis on FDI trends shows that over the past decade, Malawi’s FDI inflows have followed a highly volatile trajectory, reflecting both external shocks and domestic structural constraints.
According to the data, after a peak of $408 million (about K714 billion) in 2015, inflows dipped to $55 million (about K96 billion) in 2019, before partially recovering to $220 million (about K385 billion) in 2024.
Ironically, while global FDI inflows (excluding conduit flows) declined by 11 percent in 2024, some vulnerable economies, such as Africa experienced a 75 percent increase, and least developed countries recorded a nine percent gain.
Reads the analysis in part: “Malawi, however, recorded just a three percent increase from 2023 to 2024, indicating that it is not fully participating in the modest recovery seen in the rest of the region.
“This suggests that Malawi’s fundamentals remain less attractive to investors compared to its peers, even within the vulnerable economy group. The lack of consistent FDI inflows into Malawi partly reflects the limited pipeline of bankable, investment-ready projects in sectors with strong export potential.”
EDF said with global international project finance falling by 26 percent in 2024, there is growing pressure on development finance institutions to step in where private capital is reluctant to invest.
Published data from United Nations Conference on Trade and Development (Unctad) showed that in 2024, The data further show that last year, neighbouring Mozambique attracted FDI worth $3 553 million, with South Africa at $2 469 million, Tanzania at $1 718 million, Zambia at $1 238 million and Zimbabwe at $597 million, far below that of Malawi.
Malawi Investment and Trade Centre (Mitc) director general Kruger Phiri said despite progress following some policy reforms, there is still limited infrastructure to facilitate investments.
He said: “Furthermore, the low gross domestic product per capita is a setback as it puts off some investors.”
Unctad observed that too many economies are being left behind not for a lack of potential, but because the system still sends capital where it is easiest, not where it is needed.
In its recent Country Private Sector Diagnostic Report, the World Bank said Malawi has one of the lowest investment rates in the region in part due to exogenous factors
The global multilateral lender said Malawi’s landlocked status, small population and minimal purchasing power make attracting foreign investment a challenge.
