Malawi’s new Integrated National Financing Strategy can help to tap into the World Bank’s expanded private sector investment lab, which is mobilising global capital for job-rich sectors in developing economies, it has emerged.
Now entering its implementation phase, the World Bank lab prioritises regulatory clarity, political risk insurance, foreign exchange stabilisation, junior equity and securitisation as the pillars for investment mobilisation.
Speaking at the launch of the strategy and the Sustainable Development Goal (SDG) Investor Map Narrative Report in Lilongwe on Friday, Minister of Finance and Economic Affairs Simplex Chithyola-Banda said securing diversified financing sources is critical.
“Diversifying sources of finance is not an option, but a necessity,” he said.
Among its commitments, the strategy proposes the introduction of political risk insurance for SDG-aligned projects and increased support for foreign direct investment (FDI) through feasibility studies and marketing strategies.
The strategy comes at a time Malawi is grappling with unsustainable debt levels, now at about K16 trillion, rising unemployment and limited access to long-term development finance.
Both the strategy and the World Bank lab emphasise labour-intensive sectors. While the lab is onboarding global firms with experience in energy, agribusiness and infrastructure, Malawi’s strategy identifies agribusiness financing, small and medium enterprise capital access and infrastructure investment as urgent national priorities.
The strategy also proposes a national investment strategy linked to the SDG investor map and seeks to strengthen institutions such as Electricity Supply Corporation of Malawi, Malawi Agricultural and Industrial Investment Corporation and the Malawi Investment and Trade Centre to enhance investment readiness.
Economist Exley Silumbu, who is also a former lecturer at the University of Malawi, said in an interview on Friday that successful implementation of the strategy will require strong coordination.
He said: “Our policies must at least be comparable, if not superior, to those of regional peers such as South Africa, Kenya, Zambia and Tanzania.
“We should also modernise our infrastructure, especially roads and the energy sector.”
Silumbu cited persistent energy supply gaps and poor road networks as barriers to foreign direct investment, particularly in tourism and manufacturing sectors.
Economics Association of Malawi president Bertha Bangara-Chikadza, in an interview on Friday, said securing alternative sources of finance through better tax policies and trade incentives, is key in an environment where global headwinds are expected to reduce trade and aid flows to low-income economies.
“The government must also implement policies to strengthen public finance management, including sealing loopholes and enhancing transparency in the handling of public funds,” she said.
The Integrated National Financing Strategy outlines more than 40 priority reforms aimed at attracting both domestic and FDI.
These include digitising tax collection, reforming State-owned enterprises, offering climate-based de-risking instruments and reviewing existing tax incentives.
The economists have agreed that as the World Bank scales up efforts to improve private sector access to capital, Malawi’s ability to implement reforms and build project-ready investment pipelines will determine whether the country becomes a beneficiary or merely a bystander in the next wave of global development finance.
The key reform themes within the Integrated National Financing Strategy are designed to bridge financing gaps and advance Malawi 2063, the country’s long-term development plan, alongside the United Nations Sustainable Development Goals.
