Malawi expects its manufacturing sector to record moderate growth this year as the government pushes forward with a broader economic recovery strategy focused on agriculture, tourism, mining and manufacturing.
According to projections contained in the 2026 Annual Economic Report released by the Malawi Ministry of Finance, Economic Planning and Decentralisation, the country’s manufacturing sector is forecast to grow by 2.5 percent in 2026, up from 1.8 percent recorded in 2025. Officials say the sector could expand further to 4.7 percent in 2027 if ongoing economic reforms and sector investments continue to take effect.
Manufacturing has been identified as one of the pillars of Malawi’s long term economic strategy alongside agriculture, tourism and mining under the government’s ATMM development framework. The initiative is designed to accelerate economic recovery and strengthen productive sectors capable of generating employment and export earnings.
Officials say the expected improvement in manufacturing output will be supported by increased agricultural productivity, particularly through large scale farming investments and expanded irrigation systems. Agriculture remains the backbone of Malawi’s economy, supplying raw materials for much of the country’s manufacturing industry.
Improved stability in the foreign exchange market is also expected to support industrial production. Over the past few years, Malawi’s private sector has struggled with persistent shortages of foreign currency, making it difficult for manufacturers to import raw materials, machinery and spare parts necessary for production.
The economic report notes that consistent supply of electricity and fuel will also be critical to sustaining the sector’s recovery. Energy disruptions and fuel shortages have previously forced factories to scale back operations or temporarily halt production.
Despite the positive outlook, the report acknowledges that the foreign exchange crisis continues to constrain many businesses. Limited access to foreign currency has prevented some manufacturers from purchasing essential inputs, reducing production capacity and affecting profitability.
Agriculture, which provides key inputs for food processing and agro based manufacturing, recorded modest growth of 1.3 percent in 2025 after contracting by 0.2 percent in 2024. The recovery was driven largely by Malawi’s major export crops, including Tobacco, Sugarcane and Tea.
However, the report states that agricultural growth could have been stronger if not for rising costs of farm inputs linked to inflation and delayed rainfall during the early stages of the 2024 to 2025 growing season.
Looking ahead, the agriculture sector is projected to grow by 2.8 percent in 2026 and accelerate to 3.8 percent in 2027 as the industry gradually recovers from climate related shocks.
One major development expected to support agricultural productivity is the planned establishment of a fertiliser manufacturing plant in Malawi. Officials say local fertiliser production could reduce input costs for farmers while improving availability of agricultural supplies across the country.
The mining sector is also expected to play a larger role in Malawi’s economic expansion. Government projections indicate that mining could grow by 5.9 percent in 2026, compared with 5.3 percent recorded in 2025, before rising further to about 6 percent in 2027.
Authorities have identified the sector as a strategic priority under the country’s economic recovery programme, particularly in the exploration and development of minerals such as rare earth elements, graphite and uranium. These resources are increasingly in demand globally due to their use in advanced technologies, renewable energy systems and industrial manufacturing.
Tourism is another sector expected to support economic recovery. The accommodation and food services industry, a key component of the tourism sector, is forecast to grow by 5.3 percent in 2026 after expanding by 4.9 percent in 2025. Growth could accelerate to 5.9 percent in 2027 as economic conditions stabilise and international travel continues to recover.
Officials attribute the expected improvement partly to easing inflation and greater availability of foreign exchange, which could encourage investment and tourism related spending.
In the 2026 to 2027 national budget, Malawi’s Finance Minister Joseph Mwanamvekha allocated about 1.334 trillion kwacha to the ATMM sectors. The funding represents approximately 12.2 percent of the national budget and is intended to strengthen productive industries capable of driving long term economic growth.
Speaking during a monetary policy technical forum held in Lilongwe, the executive director of the Economics Association of Malawi, Esmie Kanyumbu, welcomed the significant allocations to the priority sectors.
However, she also expressed concern about the level of funding directed to tourism, mining and manufacturing compared with the broader ATMM strategy, noting that stronger investment across these sectors will be essential for sustained economic recovery.
As Malawi continues efforts to stabilise its economy following years of climate shocks, foreign exchange shortages and global economic pressures, policymakers are hoping that coordinated investments across agriculture, industry and mining will help build a more resilient and diversified economic structure.
