For decades, Malawi has continued to struggle to build the capacity to produce goods and services, grow its economy and achieve sustainable development, ranking 186 out of 195 economies in United Nations (UN) Productive Capacities Index.
Data published by the UN Trade and Development, evaluating economies over a 24-year span, Malawi scored 25.5 out of 100, barely improving from 24.8 in 2021 as weak infrastructure and limited business capacity continue to constrain its productive potential.
The index, which uses 43 indicators across eight categories to assess productive capacity from 2000 to 2024, shows Malawi’s biggest weakness is transport at 7.7 followed by energy at 20.7, private sector at 22.1 and information and communications technology at 22.5.
However, Malawi scored relatively well in natural capital at 56.4 and institutions at 45.6.
Reads the index in part: “Beyond its direct role in powering production, energy access determines the extent to which firms and households can adopt modern technologies and connect to broader value chains.
“Reliable transport systems reduce transaction costs, expand market access, and support the integration of regions and sectors, thereby fostering structural transformation and national cohesion.”
Published African Development Bank data show that Malawi’s natural capital directly impacts the country’s economic performance, accounting for about 52 percent of the economy, of which agriculture accounts for about 25 percent.
However, conventional macroeconomic indicators measure the value of natural resources when extracted, traded, and consumed.
The importance of strengthening productive capacities has been increasingly recognised in global development frameworks and high-level conferences in recent years.
Ministerial declarations, including the Vienna Programme of Action for Landlocked Developing Countries for the Decade 2014-2024, the Doha Programme of Action for the Least Developed Countries for the Decade 2022-2031 as well as the Awaza programme of Action for Landlocked Developing Countries, to which Malawi is a party to, have consistently emphasised that fostering productive capacities is crucial for achieving sustainable development.
In a written response on Tuesday, Transporters Association of Malawi spokesperson Frank Banda observed that while improving transport infrastructure is essential for Malawi’s economic development, the country must also adopt policies that ensure that the economic benefits of improved connectivity accrue meaningfully to Malawian businesses, workers and the wider economy.
He said: “The objective should not simply be to improve Malawi’s position in an international index.
“It should be to create a transport system that lowers the cost of doing business, connects communities to opportunities and enables Malawian enterprises to compete more effectively.”
Speaking during the opening of the 36th Malawi International Trade Fair at Chichiri Trade Fair Grounds in Blantyre, Malawi Confederation of Chambers of Commerce and Industry president Ronald Ngwira said although the country possesses the resources and potential to transform our economy, reliable energy, affordable financing, improved infrastructure and policy consistency remain critical for business growth and investment.
A recent MCCCI Business Climate Survey showed that most firms are operating below capacity, with about 51.9 percent reported utilisation below 50 percent, 37 percent between 50 and 75 percent, and only 11.1 percent above 75 percent.
Ministry of Industrialisation, Business, Tourism and Trade Simon Itaye is quoted as having said that government is prioritising policies and investments aimed at strengthening domestic industries, promoting value addition and reducing import dependence to stabilise the economy.
