Government has announced a series of economic measures aimed at strengthening forex regulations, promoting local production, and revitalising key sectors such as agriculture, tourism, mining, and manufacturing.
Presenting the 2025/26 National Budget in Parliament, Minister of Finance and Economic Affairs, Simplex Chithyola Banda, outlined a comprehensive strategy to stabilise and grow the economy. A key initiative is the establishment of a National Forex Crime Unit, tasked with tackling parallel market activities, enforcing forex regulations, and cracking down on the illegal exploitation of minerals and agricultural products.
“The unit shall also be responsible for combating the illegal extraction of our country’s minerals and ensuring strict compliance with forex regulations,” Chithyola Banda said.
He added: “We will work closely with the Inspector General of the Malawi Police Service to deploy police officers, alongside intelligence institutions, to track and apprehend those suspected of engaging in illegal forex trading.”
Promoting local production and reducing imports
In an effort to boost domestic industries and protect foreign exchange reserves, the government has announced a ban on the importation of non-essential commodities that can be produced locally. Companies and individuals will be incentivised to venture into local production through various taxation measures.
“We will no longer allow unnecessary imports to drain our forex reserves,” the minister emphasised. “Instead, we will support local industries and ensure that SMEs play a critical role in producing goods that have traditionally been imported,” said the Finance Minister.
To further enhance the growth of the manufacturing sector, the government plans to diversify production, promote value addition, and create employment opportunities. Measures will be introduced to strengthen legal frameworks, improve export data transparency, and develop a comprehensive export diversification strategy, including value-added sectors and digital trade promotion.
Strengthening SME linkages and investment partnerships
Recognising the role of Small and Medium Enterprises (SMEs) in economic growth, the government has engaged international investors and large corporations to develop backward linkages with SMEs for raw materials and input requirements. This initiative aims to create offtake markets for local businesses while reducing dependency on imports.
“Big companies operating in Malawi must source their materials locally where possible,” Chithyola Banda emphasised. “This will not only support our SMEs but also preserve the much-needed forex for national development,” he said.
Strategic budget for economic recovery
The 2025/26 budget, themed “Consolidating Gains, Strengthening Resilience, and Inclusivity for Accelerated Socio-Economic Transformation”, aligns with Malawi 2063’s first 10-year implementation plan. Chithyola Banda reaffirmed the government’s commitment to economic revitalisation, as outlined in President Dr Lazarus Chakwera’s recent State of the Nation Address (SONA).
“This budget is not just about stabilisation,” the minister declared. “It is about revitalising our economy, focusing on our key productive sectors, and ensuring that Malawi moves forward with resilience and determination.”
According to Chithyola Banda, as the country continues its economic recovery, the government has pledged to finance both existing and emerging projects across all districts, ensuring that development efforts remain inclusive and sustainable across Malawi.
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