Malawi has steadily been attracting FDI inflows from various countries namely India, China, South Africa, the United States of America, the United Kingdom just to mention but a few. Though the FDI flows have been fluctuating over the years, the country recorded a peak of USD 959 million in 2018 before experiencing a trough (USD 55 million) in 2019. The drop in FDI in 2019 can be attributed to the Covid 19 pandemic which saw a contraction of FDI globally with low- and middle-income countries like Malawi being the most affected. According to the Reserve Bank of Malawi, FDI recorded in 2022 was USD 188.56 million, representing a 45.6 percentage point increase from US$ 129.5 million recorded in the previous year. This represents a strong rebound as the global economy recovers from the devastating effects of Covid-19. Nonetheless, the figure recorded in 2022 still remains below the country’s potential.
Malawi is open to receive foreign investment and foreign investors are generally granted national treatment. The Malawi constitution protects investment and investors irrespective of nationality. While not discriminatory to foreign investors, investments in Malawi require some processes, which include obtaining a business license, a tax registration number, and a land use permit.
Agriculture remains a key sector that attracts the most FDI - primarily from South Africa, USA, UK and India. Demand for electricity in the country remains high and it is expected to grow in the medium to long-term following expanding manufacturing, mining, and agricultural activities. This has resulted in an increased interest in renewable energy projects, particularly in the solar, wind and waste to energy, in addition to hydropower projects. The exploration of rare earth elements near Lake Malawi and other minerals has also attracted new investments in the mining sector. Other sectors that offer investment opportunities include agro-processing, manufacturing and tourism.
Malawi is open to receive foreign investment and foreign investors are generally granted national treatment. The Malawi constitution protects investment and investors irrespective of nationality. While not discriminatory to foreign investors, investments in Malawi require some processes, which include obtaining a business license, a tax registration number, and a land use permit.
Agriculture remains a key sector that attracts the most FDI - primarily from South Africa, USA, UK and India. Demand for electricity in the country remains high and it is expected to grow in the medium to long-term following expanding manufacturing, mining, and agricultural activities. This has resulted in an increased interest in renewable energy projects, particularly in the solar, wind and waste to energy, in addition to hydropower projects. The exploration of rare earth elements near Lake Malawi and other minerals has also attracted new investments in the mining sector. Other sectors that offer investment opportunities include agro-processing, manufacturing and tourism.
With the recently-launched long term development vision, the Malawi 2063 which is anchored on three pillars: agriculture commercialization and productivity, industrialization and urbanization, MITC has re-aligned its investment promotion agenda to ensure that the FDI being attracted is responding to, and contributing towards attainment of the set objectives of transforming Malawi into an inclussively wealthy and self-reliant industrialized ‘upper middle-income country’ by the year 2063.
The Government makes efforts to attract private investors by implementing policies and reforms that create a conducive environment for investment. Some of the reforms undertaken are as follows:
The Government makes efforts to attract private investors by implementing policies and reforms that create a conducive environment for investment. Some of the reforms undertaken are as follows:
- Issuance of a wide array of fiscal and non-fiscal incentives which apply equally to domestic and foreign investors
- Reforms in the energy sector that allow for private sector participation and implementation of the $257.4 million Infrastructure Development Project by the Millenium Challenge Corporation that supported rehabilitation, upgrading, and modernizing critical elements of Malawi's power system across the whole country
- Streamlining investment processes to improve the ease of the doing business in the country
- Undertaking various infrastructure development projects which include construction and rehabilitation of roads, railways, airports to improve the country’s connectivity to the global markets.