The Reserve Bank of Malawi (RBM) has said it sees the manufacturing sector rebounding in 2025 buoyed by an improved performance in the agriculture sector.
In its Financial and Economic Review for the Fourth Quarter of 2024, RBM says manufacturing is expected to grow by 3.9 percent in 2025 up from 0.3 percent in 2024.
“The sector is expected to rebound and grow at 3.9 percent in 2025 propelled by the anticipated positive spill-overs from the agricultural sector on account of the expected favourable weather conditions in 2025.
“Additionally, the forecast is also based on the anticipation of improved foreign exchange supply, consistent power supply and uninterrupted fuel availability,” RBM says.
In 2024 growth for the manufacturing sector had to be revised downwards to 0.3 percent from an earlier estimation of 2.1 percent.
The downward revision was mainly driven by persistent foreign exchange shortages which hindered importation of raw materials for production.
Additionally, the performance of the sector was affected by the poor performance of the agriculture sector, which is the main source of raw materials.
The central bank has further predicted that the agriculture, forestry and fishing sectors will rebound and grow by 4.5 percent on account of anticipated favourable weather conditions in the 2024-25 farming season and up-scaled and enhanced implementation of mega farms.
“Furthermore, the government’s commitment to support the implementation of the ATMM (Agriculture, Tourism, Mining and Manufacturing) strategy is expected to galvanise the private sector to invest in the agriculture sector,” the bank says.
The central bank has also projected that the mining and quarrying sector would grow by 5.6 percent in 2025 from 4.8 percent in 2024.
“The optimistic outlook reflects the planned implementation of the ATMM strategy, with projects targeting rare earth elements, graphite and uranium,” the review reads.
Since taking over the presidency in June 2020, President Lazarus Chakwera has touted three strategic areas of agriculture, tourism and mining as being key to Malawi’s economic growth. In recent months, manufacturing has been added to the growth drivers.
Speaking when he presented the 2025- 26 national budget statement, Finance Minister Simplex Chithyola Banda said the ATMM Strategy will remain crucial to achieving food security, ensuring sustainable sources of foreign exchange generation and ultimately driving economic growth that is not only sustainable but also inclusive.
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