Malawi Bets on Agriculture, Tourism, Mining to Revive Economy
By prioritising key sectors and implementing strategic reforms, the government hopes to set the country on a path towards sustainable growth and development.
LILONGWE, Malawi — Malawi is banking on a revival of its agriculture, tourism, and mining sectors to pull the country out of a prolonged economic slump, according to the newly released 2025/2026 budget statement, writes Winston Mwale.
Minister of Finance and Economic Affairs Simplex Chithyola Banda presented an ambitious fiscal plan that seeks to boost key industries and implement reforms aimed at stabilising the economy.
"Government is optimistic that despite all the challenges that have been encountered, the economy is getting back and will surely get back on the recovery trajectory," Banda said during his address to the National Assembly.
Economic Challenges
The southern African nation has been grappling with a series of economic shocks, including:
The Covid-19 pandemic: Which disrupted global and domestic economic activity
Geopolitical conflicts in Europe: Which affected the supply of essential commodities
Adverse weather conditions: Such as Cyclones Freddy and El Niño, which have devastated agricultural production
These challenges have resulted in slow economic growth, exchange rate instability, and rising inflation. The Malawi Kwacha has been significantly devalued in recent years, further exacerbating the economic strain.
Budget Highlights
The 2025/2026 budget, themed "Consolidating Gains, Strengthening Resilience and Inclusivity for Accelerated Social Economic Transformation," outlines several key measures:
Total revenue and grants: Estimated at K5.58 trillion, representing 21.5 percent of GDP
Domestic revenues: Projected at K4.44 trillion
Total expenditure: Programmed at K8.05 trillion, or 31.1 percent of GDP
Overall deficit: Estimated at K2.47 trillion, or 9.5 percent of GDP, to be financed through domestic and foreign borrowing
Sector-Specific Allocations
A significant portion of the budget is dedicated to Agriculture, Tourism, Mining and Manufacturing (ATMM). The government aims to leverage these sectors to drive economic growth, create jobs, and boost foreign exchange earnings.
Agriculture
The agriculture sector receives a substantial allocation of K693.3 billion, representing 9 percent of the total budget. Key initiatives include:
Irrigation development: K99.5 billion
Mega farms: K38.3 billion
Affordable Inputs Programme (AIP): K131.6 billion
The government plans to maximise the utilisation of irrigable land to increase maize production and ensure food security.
Tourism
The tourism sector is set to receive a boost with an allocation of K13.9 billion, a 192 percent increase from the previous budget. This funding will support:
Tourism promotion and development: K4.2 billion
Wildlife management and conservation: K3.7 billion
Development of eco-lodges, public beaches, and access roads to tourist areas
Mining
The mining sector will see a significant investment with an allocation of K14.2 billion, a 160 percent increase. The focus will be on:
Establishing a mining regulatory authority and a state mining company
Conducting geological surveys to identify potential mineral deposits
Formalising artisanal and small-scale miners
The government also intends to conduct a nationwide survey to assess gold mining sites and ensure that all gold produced in Malawi enters the formal market.
Revenue Measures
To finance the budget, the government has introduced several tax policy measures:
Import duty on motor vehicle engines: A 25 percent duty to prevent abuse of duty exemptions
Excise duty on e-cigarettes: A 200 percent duty to discourage use, particularly among young people
Reduced excise tax on hybrid vehicles: To promote fuel-efficient transportation
The government is also removing VAT on bread, buns, and confectioneries to ease the financial burden on households.
Reforms and Challenges
The budget includes public sector reforms aimed at improving service delivery and financial management. These include:
Implementing an electronic procurement system to enhance transparency
Strengthening oversight of state-owned enterprises to ensure they contribute to government revenue
Amalgamating ICT-based institutions to build a resilient digital infrastructure
However, Malawi faces significant challenges, including a high public debt and the need to improve domestic revenue mobilisation. The government is also grappling with unpatriotic business practices that fuel speculative behaviour in the foreign currency market.
The 2025/2026 budget reflects Malawi's determination to overcome its economic challenges and build a more resilient and inclusive economy.
By prioritising key sectors and implementing strategic reforms, the government hopes to set the country on a path towards sustainable growth and development.
"I call upon all Malawians to work together to ensure the attainment of our development aspirations in the spirit of one Malawi, one People and one Nation," Banda said.