The talks come as Malawi seeks a new lending programme following the termination of its previous IMF arrangement in May, which ended after the country failed to restore macroeconomic stability.
In its Sub-Saharan Africa Regional Economic Outlook for October 2025, the IMF highlighted concerns over Malawi’s widening gap with other regional economies. The country faces high inflation at 28.7% and a lending rate of 26% from the Reserve Bank of Malawi. Government debt stands at 87.7% of gross domestic product, while low growth and a $14 billion economy mean macroeconomic challenges continue to affect income levels and poverty reduction.
Chifipa Mhango, Chief Economist and Director of Economic Research and Strategy at the Don Consultancy Group, noted that Malawi’s economy remains largely agro-based, with agriculture accounting for 31% of value added, services 55%, and manufacturing 10%. Key exports include tobacco, tea and sugar, but value addition has historically been limited.
Mhango said the new government is seeking to incentivise investment and industrialisation, including through special economic zones and restrictions on the export of unprocessed minerals to boost local processing. These measures, he said, are beginning to attract IMF attention as part of efforts to reset Malawi’s economy.
External factors also challenge growth, including the need for market access in Asia and increased foreign direct investment, particularly from China. Underdeveloped infrastructure and a high public debt burden further complicate recovery. Mhango highlighted corruption and inefficiencies in procurement as significant barriers to the effective use of public funds and development aid.
Despite these challenges, the IMF described the meetings as productive. Development partners, including the African Development Bank, continue to support Malawi with programmes targeting energy, transport and infrastructure. The government’s focus on improving governance and investment conditions will be key to securing a new IMF programme and fostering sustainable economic growth.
–IMF/ChannelAfrica–
