Malawi is a land-locked country in south-east Africa. The country is home to one of the African Great Lakes and shares borders with Mozambique, Tanzania, and Zambia. Road networks connecting the country to ports in neighboring countries are limited. There has been minimal investment in roads, power, internet connectivity, and general infrastructure. Formal and informal trade barriers may restrict imports and exports, and import tariffs tend to be high. Malawi is one of the least electrified countries in the world; approximately eleven percent of the country has access to the electrical grid and internet is unreliable and expensive.

In 2024, Malawi’s population was estimated at 21 million and is expected to reach 38 million by 2038. The annual per capita gross domestic product (GDP) is $580. The country has experienced high inflation in recent years, which peaked at 40 percent in 2023 before it eased to 32.3 percent in 2024. The economy is heavily dependent on rain-fed agriculture, employing nearly 80 percent of the population. Unprocessed agricultural outputs account for 24 percent of GDP and 90 percent of total merchandise export earnings. Tobacco accounts for 40 to 60 percent of exports, with tea, cotton, sugar, pulses, ground nuts, and coffee making up the rest. Fertilizer and petroleum products account for at least 25 percent of imports, with pharmaceutical products, motor vehicles, equipment, clothing, building materials, and food items making up the rest of the import basket.

The country’s economic growth is slow and volatile; over the past five years economic growth has climbed as high as five percent and dropped to less than one percent. Fiscal mismanagement, poor infrastructure, limited road networks, energy challenges, corruption, and extreme weather events contribute to Malawi’s growth volatility. Approximately 75 percent of the population live below the international poverty line. Poverty rates are expected to increase in response to rampant inflation and the pass-through effects of global conflicts affecting global supply chains. According to the ILO, the unemployment rate is estimated at 5 percent, but most employment opportunities are in the informal, unskilled labor sector. In 2024, Malawi recorded an economic growth rate of 1.8 percent and projected growth of 3.2 percent for 2025.

Malawi’s major trade partners are South Africa, Belgium, Egypt, Zambia, Zimbabwe, Tanzania, the United Kingdom, China, the United Arab Emirates, and the United States. The United States receives approximately four percent of Malawi’s exports. South Africa, China, the United Arab Emirates, and India dominate Malawi’s import sourcing markets, while Belgium and South Africa are the top destinations for Malawi’s exports. Malawi has a free market system, but the government has placed export controls on essential goods. In July 2020, Malawi enacted the Control of Goods Act (COGA) to make any market controls subject to transparent government and stakeholder process. The Malawian kwacha (MWK) was liberalized in 2012 and remained relatively stable against the U.S. dollar until December 2016. Periodic rate adjustments did not keep up with depreciation and the shadow market rate versus the official rate were significantly mismatched until foreign exchange pressures resulted in the Central Bank announcing a 34 percent devaluation on November 9, 2023. The spread between the official and parallel market rate stabilized briefly, but it soon started to rise again reaching a peak of 185 percent above the official rate in February 2025. The Reserve Bank of Malawi has assured investors and other stakeholders that it will maintain a managed floating exchange rate regime.

Malawi is generally peaceful, democratic, and has no history of major conflicts or terrorism activities. The judiciary, Malawi Police Service, Anti-Corruption Bureau, Financial Intelligence Authority, Malawi Defence Force, and other independent institutions are under resourced, but able to exercise their powers without significant political interference and there is a general acceptance of the rule of law.

Malawi’s main bilateral trade agreements are with China, South Africa, Zimbabwe, Mozambique, and Botswana. Malawi is a member of the World Trade Organization (WTO), the Southern African Development Community (SADC), and the Common Market for Eastern and Southern Africa (COMESA). Malawi is also a party to the African Growth and Opportunity Act (AGOA) and Everything but Arms (EBA). Malawi participates in the COMESA-SADC-EAC free trade area negotiations and signed the WTO trade facilitation agreement and ratified it in July 2017. Malawi signed the African Continent Free Trade Area in 2018 and fully ratified the agreement in 2021. Malawi recently implemented COMESA’s simplified trade regime, SADC’s Protocol on Trade in Services in 2022, and a tariff offer to the Africa Continental Free Trade Agreement (AfCFTA) Council of Ministers enabling Malawi to trade under preferential conditions with the other parties that have implemented their approved tariff offers.

Political Environment

For background information on the political and economic environment for Malawi, please click on the link to the U.S. Department of State Countries & Areas website.