The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has urged local firms to pivot towards regional markets, warning that disruptions to global trade routes have exposed structural weaknesses to the import-dependent economy.
The private sector lobby group says the evolving Middle East crisis presents both immediate risks and long-term opportunities, calling for a strategic shift toward intra-African trade under the African Continental Free Trade Area (AfCFTA), a market of 1.3 billion people and $3.4 trillion gross domestic product, to reduce exposure to external shocks.
The chamber’s warning comes as geopolitical tensions disrupt the Strait of Hormuz, a critical global shipping route through which about 20 percent of the world’s oil supply passes.
The disruption has heightened concerns over supply bottlenecks, rising freight costs and fuel price volatility pressures that directly affect Malawi’s import bill and foreign exchange position.
In a written response on Saturday, MCCCI chief executive officer Daisy Kambalame said the situation underscores the urgency for Malawi to reposition itself within regional value chains by boosting production, diversifying exports and investing in value addition, particularly in agro-based industries.
“The AfCFTA provides a framework for Malawi to expand market access and reduce reliance on distant and increasingly fragile global supply chains,” she said.
Economics Association of Malawi president Bertha Bangara-Chikadza said in an interview that the conflict could act as a catalyst for deeper intra-regional trade, but only if governments addresses long-standing inefficiencies.
She noted that the disruption of key global routes, particularly through the Red Sea, is already forcing Southern African Development Community countries to rethink logistics and supply chains.
Zimbabwe and Zambia also remain heavily reliant on ports such as Durban in South Africa and Dar es Salaam in Tanzania, but there is growing momentum to improve alternative corridors such as Beira in Mozambique to enhance resilience.
However, Kambalame cautioned that structural constraints continue to limit Malawi’s ability to fully capitalise on regional trade opportunities.
These include high production costs driven by unreliable energy supply, foreign exchange shortages, policy inconsistencies and limited access to finance.
Despite these challenges, MCCCI said the current global disruptions should serve as a turning point for Malawi and the region to accelerate trade integration, improve corridor efficiency and strengthen industrial capacity.
But government has struck a cautious tone on the extent to which Malawi can shift away from global supply chains, particularly in the energy sector.
Speaking during a press briefing in Lilongwe on Thursday, Minister of Energy and Mining Jean Mathanga said that while Malawi has explored sourcing fuel from regional producers such as Angola and Nigeria, limitations in refining capacity mean that the country cannot fully detach from Middle Eastern supply chains.
She said: “The ministry reviewed options to buy fuel from regional peers such as Angola and Nigeria. But we cannot discount the fact that most of the fuel supplied globally comes from the Arab countries.
“Our peers do not have the capacity to refine, some of them send their fuel to the Arab countries for refining, so we cannot really completely move away from the Arab oil market.”
Last week, the Reserve Bank of Malawi (RBM) indicated that it is prepared to act to contain inflation and exchange rate pressures triggered by global fuel and shipping disruptions occasioned by the Middle East crisis.
RBM spokesperson Boston Maliketi Banda said Malawi’s economic structure makes it particularly vulnerable to external shocks, especially through fuel and logistics costs.
“Since we import all our fuel and many essential goods, increases in global oil prices or shipping costs tend to raise the cost of bringing these goods into the country,” he said.
A UN policy brief, titled ‘Middle East conflict: Macro-fiscal and socio-economic impact on Malawi’, also cautioned that higher oil prices, rising freight costs and supply chain disruptions could reverse recent economic gains.
