Financial Data
Updated 23 Sep 2017


Malawi

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Business opportunities and risks

Opportunities for you to do business in Malawi

Malawi-Brochure-Image

Thanks to its diverse cultural influences and the population’s demand for affordable products and services, there are a number of opportunities for your business to carve a niche. The government is also looking to streamline processes that have prevented businesses from breaking into the market in the past.

Here’s how your business stands to benefit:

  • Malawi is developing regional transport corridors in collaboration with neighbouring countries. It is also implementing regional programmes to harmonise trade regimes and transit procedures.
  • The government is implementing measures to make it easier to trade with the country. This includes the establishment of one-stop border posts and a national single window. The single window aims to cut the cost and time of trade transactions by simplifying and harmonising the documents involved.
  • The higher projected growth in the wholesale retail and trade, financial and insurance, and manufacturing sectors presents opportunities for companies that want to enter the Malawian market.
Business opportunities
  • The Malawian government is implementing systems and processes that aims to improve transit times.
  • Border control is also being addressed, with a view reduce the paperwork required when entering the country.
  • Wholesale, retail, finance & insurance and the manufacturing sector present opportunities for growth.
Operational risks to consider

Growth and development across Africa has attracted foreign investment and several multi-national companies to the continent. There are certain operational risks you should factor in to your business model when expanding into Malawi.

  • Malawi has a low ranking in the World Bank’s doing business report. The main bottlenecks to private sector development include weak infrastructural services, limited access to finance, lack of skilled labour, lengthy procedures, and weak trade facilitation. The business environment has also been affected by high inflation and excessive lending rates.
  • Barriers to investment include unreliable power, water shortages, transportation costs, poor telecommunications infrastructure, and difficulty in accessing foreign exchange, government market interventions and the high cost of services.
  • Many businesses have complained that there is not enough foreign exchange to pay for the importation of raw materials.
  • Expatriate employees who live and work in Malawi have to have temporary employment permits, which are sometimes difficult to get. Investors may employ expatriate employees in areas where there is a shortage of suitable and qualified Malawians. Foreign nationals who own or operate businesses in Malawi must have business residence permits. The permits are issued for five-year periods and are renewable.
  • There are some restrictions to land ownership by foreigners. Sale of land to foreigners is approved only after no Malawian has shown interest to match the price offered by the foreigner. However, this rule does not apply to land acquired as part of a business establishment. In principle, public enterprises compete on an equal footing with private entities when it comes to access to markets, credit and other business operations.
Business challenges
  • The World Bank cites infrastructure development as a major challenge in attracting businesses to invest in Malawi.
  • Access to foreign exchange and work permits make it difficult for foreigners to do business in Malawi.
  • Acquiring land in Malawi can be challenging for investors, as Malawians have first right of refusal when it comes to land ownership.
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