Expanding to Malawi? Here are 4 of the country’s growing industries
What are your competitive advantages when you expand to Malawi? What is the market like, what are some consumer habits that are reflected in the country’s thriving industries? What are your potential competitors doing?
In this article, our Malawi in-country experts give you the insights and practical knowledge you need to better understand Malawi’s market, economy, and thriving industries.
1. Agriculture
Agriculture is one of Malawi’s top industries, contributing to approximately 20% of Malawi's GDP. The country’s economy has historically depended heavily on it. According to the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) and to the Food & Agricultural Organisation of the United Nations, the industry employs 80% of Malawi’s labour force and equally represents up to 80% of the country’s exports. The main crops grown in Malawi are tobacco (the main cash crop), sugar, tea, maize (the main food crop), and cotton.
In 2021, Malawi established a Vision 2063, aiming to generate inclusive wealth for all Malawians. As such, the country is moving away from its dependence on tobacco as a source of foreign currency, and in parallel, is exploring policies for other traditional cash crops.
Opportunities in the agricultural sector in Malawi
Beyond just farming, opportunities exist in subsectors like:
- Agro-processing
This includes the supplying of products, equipment, processing machinery, and packaging solutions for the agricultural industry. There is also a need for innovative agricultural technologies to improve productivity, and resilience to extreme weather and climate change. Other opportunities exist in agro-processing industries, especially where garment production and cotton-spinning are concerned.
At the moment, Malawi mostly produces raw materials without having the setup to further transform them into semi-processed or processed products such as sweets, snacks, or garments in the case of cotton production. So, the door for development in these sub-sectors is wide open, providing fertile ground for companies that want to establish themselves in a low-competition sector.
However, it is worth noting that the country may not have the adequate infrastructure in place yet, and so there must be a willingness to build from the ground up.
- Livestock production
The livestock sector in Malawi contributed to at least 22.4% to the country’s GDP in 2021, according to the FAO. However, Malawi still doesn’t produce enough livestock to satisfy local demand. Development in this sector could help bridge this gap, providing good business opportunities to organisations looking to grow in Malawi, and even in external markets.
- Aquaculture
Malawi is home to Africa’s third largest lake, Lake Malawi. So even though the country itself is land-locked, opportunities for aquaculture are still very much present, especially when it comes to tilapia freshwater fish and catfish.
- Piggery
In 2021, Malawi was ranked 22nd worldwide in pig production. The southern African country is expected to produce almost 2 million heads by 2026, which would be an average year-on-year increase of 4.1%.
2. Manufacturing
The manufacturing sector in Malawi amounts to 12% of the country’s GDP. Most of the yield from agriculture is exported in a semi-processed state, which gives organisations ample room for innovation when it comes to processed products: from snacks inspired by local eating habits and recipes to sweets that will export well regionally. Beyond the agricultural sector, the Malawi Investment and Trade Centre also highlights opportunities to be had in the light goods sector. The country currently imports most of its household electrical fittings (plugs, switches, and more) where they could be producing them locally.
3. Tourism
Tourism in Malawi contributed 7% to the country's GDP in 2019, but the Covid-19 pandemic heavily impacted the industry. Still, the government has identified this sector as a key development area, even going as far as including it in the Vision 2063 development plan. Tourist attractions in Malawi include:
- Lake Malawi, the third largest freshwater lake in Africa
- Wildlife spread across national parks, wildlife reserves and forests
- Cultural and historical attractions
Investment opportunities include subsectors like eco-tourism, hospitality, aqua sports, safaris, and tours to explore Malawi’s natural treasures.
4. Mining
Currently, mining only represents about 1% of Malawi’s GDP – but it’s not for a lack of resources. The country is rich in precious raw materials, including:
- Uranium
- Rubies
- Sapphires
- Coal
- Graphite
- Limestone
- Iron
The Malawian government is on a mission to grow the sector and is aiming for mining to represent at least 10% of the country’s GDP by 2063.
Several private international companies are already involved in mineral exploration in Malawi. One Australian company notably extracted 10.9 million pounds of uranium from a single mine from 2009 to 2014. Similarly with the agro-processing subsector, Malawi doesn’t necessarily have the required infrastructure in place to facilitate mining. These opportunities should be taken with the knowledge that in-depth groundwork will be needed. However, since the government is looking to boost this sector, the conditions are favourable for those businesses looking to grow in the Malawian mining industry.
Expand to Malawi safely with your African Employer of Record (EOR)
With over 15 years’ experience operating in Malawi and supporting organisations as they expand to the country, Africa HR solutions is the African expert you need to thrive in Malawi. Our local teams understand local regulations and keep you up-to-code, while offering advice that will help you grow. To find out how we can help you through our EOR offer, feel free to chat with one of our experts.
