The private sector has, again, lamented the operating environment in the country, rating the first quarter of 2025 as tough for business.
Private sector players’ umbrella body, the Malawi Confederation of Chambers of Commerce and Industry (MCCCI), and Small and Medium Enterprises (SMEs) representative groups say the first three months of the year was another period to forget for businesses.
Individual businesses say they continued operating below optimal capacity due to economic volatility, characterised by rising inflation, forex scarcity and high interest rates, among other challenges.
Inflation—the rate at which commodity prices change at a given period in an economy—was seen at 30.7 percent in February.
During the quarter under review, Malawi also experienced an acute forex shortage, with the gap between authorised dealer banks’ rate and that of the parallel market seen widening.
In an interview, MCCCI Chief Executive Officer Daisy Kambalame said a recent survey by the chamber shows that 83 percent of businesses were operating below 75 percent of their capacity.
She said foreign exchange shortages remain the primary obstacle for businesses, disrupting the importation of critical raw materials, machinery and essential production inputs.
“Although foreign exchange reserves showed a marginal improvement in January, increasing from 2.1 months in December 2024 to 2.3 months of import cover, this improvement has been insufficient to significantly ease business challenges.
“The private sector has demonstrated resilience while navigating persistent challenges that have shaped its overall performance during this period,” Kambalame said.
National Association of Small and Medium Enterprises Regional Chairperson for the North Telita Chitsulo said SMEs have been hard hit by the situation.
“The first quarter has not been good. Businesses have struggled. Each time you go to the market, you find that the prices are new; so, every time we also have to hike prices, and the raw materials are also scarce,” Chitsulo said.
SME Chamber Executive Director James Chiutsi said rising food inflation remains the major pressure point.
But the industry players remain cautiously optimistic, saying the situation might improve as the country exits the lean period.
Forex supply is expected to improve as tobacco markets are set to open next week.
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