Malawi cannot afford to rely on external demand or donor support as the global economy slows, according to a senior Reserve Bank of Malawi economist, who has warned that the country is underperforming even by regional standards and must accelerate reforms to strengthen economic resilience.
Analysing the implications of the latest World Economic Outlook projections, economist Kisu Simwaka said the expected moderation in global growth to 3.1 per cent from 3.5 per cent signals a more challenging external environment for African economies, particularly those dependent on commodity exports and foreign aid.
“The message is clear: the world economy is slowing down. But Africa must not slow down. Africa must accelerate. And Malawi must accelerate,” Simwaka said.
He argued that weaker global growth, coupled with sluggish expansion in Europe, was already being reflected in Malawi’s export performance.
Tobacco earnings, the country’s largest foreign exchange earner, reached US$287.1 million by early October 2026, down sharply from US$526.2 million during the same period a year earlier.
According to Simwaka, the decline reflects weakening global demand as major economies lose momentum.
“When the world economy slows, small open economies such as Malawi cannot depend on external demand to drive growth,” he said, adding that slower expansion in advanced economies could also translate into tighter aid flows.
Particular concern, he said, lies in Asia, where growth is projected to ease from 5.6 per cent to 4.9 per cent.
As a major engine of global commodity demand, a slowdown in the region could put further pressure on export prices and Africa’s terms of trade.
“Weakening growth in Asia is a headwind for Africa because it affects commodity markets and export earnings,” he said.
Simwaka also pointed to volatility in the Middle East and Central Asia as a source of uncertainty for fuel-importing countries such as Malawi.
Fluctuating oil prices could either worsen inflationary pressures or provide relief to the country’s import bill, depending on exchange-rate stability.
“If oil prices fall, Malawi only benefits if the exchange rate remains stable enough for those gains to be passed through to domestic prices,” he said.
While Sub-Saharan Africa is forecast to expand by around 4.5 per cent, Simwaka argued that the figure masks a deeper problem.
With population growth estimated at about 2.6 per cent, the region’s per capita growth rate remains too low to achieve meaningful reductions in poverty.
“Four-and-a-half per cent growth for three consecutive years is effectively stagnation when population growth is taken into account,” he said.
Against that backdrop, Malawi’s projected growth of 2.7 per cent appears particularly weak. Simwaka noted that neighbouring economies such as Zambia, Tanzania and Rwanda are expected to outperform Malawi, underscoring the need for a stronger domestic growth strategy.
“Malawi is underperforming an underperforming region. The country must catch up,” he said.
The economist argued that the policy response should focus on building internal resilience rather than hoping for a stronger global cycle.
He identified the accumulation of foreign exchange reserves, addressing fiscal imbalances and removing structural constraints to productivity as key priorities.
“In a global economy growing at only 3.1 per cent, countries such as Malawi cannot rely on exports and donor assistance alone,” Simwaka said. “The challenge is to strengthen domestic foundations for growth and reduce vulnerability to external shocks.”
His assessment comes as policymakers grapple with persistent foreign exchange shortages, inflationary pressures and subdued economic growth amid an increasingly uncertain global outlook.
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