Malawi continues to struggle to attract foreign direct investment (FDI), with inflows of just US$220 million (about K385 billion) in 2024, far behind regional peers such as South Africa (US$2.5 billion), Tanzania (US$1.7 billion), Zambia (US$1.2 billion), and Zimbabwe (US$597 million), according to data from the African Export-Import Bank (Afreximbank).
Economists attribute Malawi’s weak investment performance to a hostile business climate, macroeconomic volatility, foreign exchange shortages, and regulatory bottlenecks. Paul Kwengwere, former CEO of the Malawi Investment and Trade Centre, noted that narrow investment bases and policy incoherence continue to discourage potential investors.
“Investors fear that even if they make a profit in kwacha, they cannot convert it to US dollars to pay dividends, repay external loans, or import raw materials,” Kwengwere said.
Unlike neighboring countries, which have leveraged large-scale mining projects and natural resources to attract guaranteed returns, Malawi’s focus on agro-processing remains highly sensitive to administrative delays. The limited FDI inflows have hindered the transfer of technology and skills, keeping the country largely confined to low-value production.
Daisy Kambalame, CEO of the Malawi Confederation of Chambers of Commerce and Industry, warned that persistent foreign currency shortages, deteriorating import cover, and an unstable business environment continue to drive investors to seek more predictable markets elsewhere.
The World Bank’s recent Country Private Sector Diagnostic Report underscored that Malawi has one of the lowest investment rates in the region. While the country maintains a one-stop service centre and aftercare support for investors, experts say a limited pipeline of bankable, investment-ready projects with strong export potential has prevented the country from participating fully in regional and global value chains.
Despite hosting investment forums and other initiatives to woo foreign capital, Malawi faces stiff competition from neighbors and continues to struggle to attract sustained FDI.
