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Select Economic and Financial Indicators2014201520162017e2018f
Real GDP (% change)
GDP (USD bn)
Inflation (average)23.821.921.711.69.6
Fiscal Balance (% GDP)-4.8-6.2-7.1-5.3-3.1
Broad Money (% change, end period)20.723.715.217.315.1
Population (mn)17.6018.1118.6319.1719.72
Exports (USD bn)
Imports (USD bn)
Current Account Balance (% GDP)-8.4-9.5-13.5-9.1-8.1
FX Reserves (USD bn, end period)
Exchange Rate (average)421.81498.93712.98725.47727.30
Sources: IMF, World Bank, UN, Bloomberg, Ecobank Research

Economic Outlook

Economic Outlook

Real GDP: Economic growth is expected to continue its rebound in 2018 as the economy continues to recover from the devastating weather conditions that severely damaged production of food, and the country’s main export crop, tobacco, in 2015 and 2016. The weather-related shocks developed into a large-scale crisis, posing the risk of food-insecurity to around 40% of the population. Renewed support from IMF has been instrumental in helping to stabilise food prices, and World Bank reengagement raises hopes that Malawi can improve donor perceptions after a host of countries imposed aid embargos following the 2013 “cashgate” corruption scandal. The USD80mn budget support from the World Bank, approved in May 2017, is aimed at supporting reforms to agriculture (to boost its resilience to adverse weather conditions), and fiscal management. Similarly, in June 2017, the IMF has augmented the size of its Extended Credit Facility (ECF) agreement with the country by USD48mn, in addition to the provision of a USD78mn loan in June 2016. As Malawi remains is heavily reliant on donor inflows, the thawing relations with donors will be very welcome. We expect growth to rebound to 5% in 2018, led by the agricultural, retail, and ICT sectors.

Inflation: The average inflation rate for the year is set to fall further, lowering to high single digits in 2018, compared with 11.6% in 2017, and 21.7% in 2016. This in part due to the containment of food price inflation, particularly following IMF intervention to help stabilise the price of maize (a staple food in Malawi). Furthermore, the broad stability in the MWK exchange rate over 2017, and tight monetary policy that helped to check inflation are likely to continue to do so again this year. However, rising oil prices will raise inflationary pressures over 2018, with the average rate for the year expected to register higher than the December 2017 rate of 7.7% y/y.

Fiscal balance: Fiscal deficit is expected to narrow in 2018, partly due to improved economic activity, recent revenue mobilisation efforts, and the resumption of donors’ budgetary support. As a result, we expect a deficit of about 3% in 2018. However, strengthening public financial management systems will remain integral to safeguarding public resources and restoring confidence in budgetary processes.

Current account: The current account deficit is expected to narrow somewhat on the back of improved agricultural output, and the resumption of donor budget support. However, we expect it to remain wide at about 8% of GDP in 2018.


Malawi faces three main risks: the first is the reliance on rain-fed agriculture – both for food and tobacco. Efforts to increase irrigated farmland need to be made so the economy and population face smaller difficulties created by drought. The second is the heavy reliance on donor support. This has helped to cushion the economy against shocks. While renewed engagement from the World Bank and IMF will be welcome, and may help to thaw relations with other donors, the suspensions following the 2013 cashgate scandal highlights the need for reduced reliance on budget support. Lastly, a failure to implement fiscal reforms, and strengthen financial management and transparency could have further negative consequence on Malawi’s economy.

FX, FI and Commodity Information

FX, FI and Commodity Information

Exchange rate structure

TargetNo target
Type of interventionVia spot market
Convertible currency?No
Market participantsCorporates (45%); NGOs/International Orgs. (28%); Interbank/Reserve Bank (17%); Foreign Investors (10%)
Source: Bloomberg, IMF, and Ecobank Research


FX ProductsSpotForwardsNon-deliverable ForwardsOptionsSwaps
On offerYesYesNoNoYes
Daily trading volume (USD mn) N/A N/A N/A N/A N/A
Average trade size (USD mn)
Average spread
Trading hours09:00-15:00
Settlement cycleT+2
FX Market StructureMajor FX providers: 1) exporters of Tobacco, Cotton, coffee, and Tea. 2) International donors/organizations. 3) Intervention of the Reserve Bank of Malawi
Non-resident FX RegulationsSpotForwardsNon-deliverable ForwardsOptionsSwaps
Trade and FDI flowThe RBM has nominated Authorized Dealer Banks (ADB) to provide prior approvals for all transaction amountsN/AADB to provide prior approvals for all amounts
Financial flow
Resident FX RegulationsSpotForwardsNon-deliverable ForwardsOptionsSwaps
Trade and FDI flowThe RBM has nominated Authorized Dealer Banks (ADB) to provide prior approvals for all transaction amountsN/AADB to provide prior approvals for all amounts
Financial flow
Source: Bloomberg, IMF, and Ecobank Research


Primary MarketTreasury billsTreasury notesTreasury bondsCentral Bank billsOMOsPromissory Notes
IssuerGovernmentGovernmentGovernmentN/ACentral BankGovernment
End useGovernment financingGovernment financingGovernment financingLiquidity managementGovernment financing
Maturity structure91- to 365-days2- to 5-yrs5- to 10-yrs7-to 365-days1-to-3 years
Coupon paymentsN/ASemi-annualSemi-annualN/AN/A
Secondary Market
Daily trading volumeLimited tradingN/A
Average trade sizeLimited trading
Settlement cycleT+2
Nedbank contact details for MalawiEcobank local affiliate contact details:
Nedbank Malawi, 2nd & 3rd Floor Plantation House, Victoria Avenue, Blantyre 3
Tel: +265 1 820 477 / 997 / 674
Ecobank Malawi, Ecobank House, Corner Victoria Avenue and Henderson Street, Blantyre 3
Tel: +265 01 822 099 / 808 / 681
Source: Bloomberg, IMF, and Ecobank Research

FI primary market information

FI primary market information

Malawi Debt2014201520162017e2018f
Government debt (% GDP)
Sub-Sahara average44.552.656.155.655.8
External debt (official creditors, % GDP)30.027.832.630.630.4
Sub-Sahara average25.530.231.932.933.2
External public debt stock (USD bn)
Share of total sub-Sahara debt (%)
Source: IMF and World Bank

Commodity and trade information

Commodity and trade information

Hydrocarbon & mineral production

Malawi’s mining sector is relatively underdeveloped. The country has significant reserves of coltan, zirconium and gemstones, but to date production has been predominantly artisanal and on a small scale. In 2010 Malawi started industrial production of uranium, with output reaching 646 tonnes in 2014, most of which was exported to Canada for use in the nuclear industry. However, that year the Kayelekera mine (the source of most of Malawi’s uranium) was forced to close owing to depressed global prices, resulting in the collapse of uranium production in the country. Malawi’s only other significant mining output is gold (from artisanal production), with output of 2 tonnes in 2016, all of which went to the UAE.

Malawi has no known hydrocarbon reserves but exploration continues in the Lake Malawi area, in competition with Tanzania on the other side of the lake. Malawi consumes an average of 260,000 tonnes of petroleum products each year, with petrol and diesel making up 90% of fuel demand. Given the lack of domestic refining capacity, Malawi imports over 90% of its petroleum products from South Africa, usually via Mozambique.

Soft commodity production

Despite its small size, Malawi is an important producer of cash crops, both for domestic consumption and for export to sub-regional markets. The country’s key staple food production included 5.1mn tonnes of cassava, 2.4mn tonnes of maize, 1mn tonnes of potatoes and 855,000 tonnes of bananas/plantains in 2016. In good years Malawi exports a large proportion of its maize crop to neighbouring countries to plug local deficits. Malawi’s key cash crops for export include tobacco (85,000 tonnes in 2017) and tea (56,000 tonnes).The country also produces small volumes of cotton lint (33,000 tonnes in 2016/17) and raw sugar (300,000 tonnes). Sugar output is both for domestic consumption and for export to the EU under duty- and quota-free access granted to ACP countries.

Trade flows


Malawi’s imports totalled US$2.6bn in 2017. The country is reliant on imports of capital and consumer goods, reflecting the poorly developed manufacturing sector. In 2017 these imports included US$405mn of vehicles & machinery, US$234mn of electronics, US$206mn of printed material & US$175mn of pharmaceuticals. Given the country’s lack of refining capacity, Malawi is entirely dependent on imports of petroleum products, worth US$235mn in 2017. The country also imports large volumes of raw industrial materials, including US$216mn of fertilisers & pesticides, US$124mn of iron & steel, US$97mn of plastics and US$40mn of cement. Although Malawi is a leading maize producer, which is traded informally across the region, the country also imported US$87mn of cereals in 2017, some of which were re-exported to its landlocked neighbours.


Malawi’s exports totalled US$890mn in 2017. Tobacco was Malawi’s most valuable export, worth US$532mn in 2017 (60% of total exports), most of which went to Belgium, Egypt and China. The country’s other important soft commodity exports included tea (US$72mn in 2017), most of which went to South Africa, the UK and Kenya, oilcake (US$62mn), sugar (US$35mn), nuts (US$35mn) and vegetables (US$19mn).

  • Flag
  • Population
    19.72 M
  • Area
    118,484 sq km
  • Capital
  • Largest city
  • Official language
  • Major languages
    English and Chichewa
  • Currency
    Malawian kwacha

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