In 2025, Malawi finds itself once again at a fiscal crossroads, with a K8.05 trillion national budget unveiled — promising economic stabilization, infrastructure development, and social protection. Yet, beneath the surface of those ambitions lies a hard truth we have avoided for decades: Malawi never had an economy to begin with.
A History Written in Aid and Debt
By Nthanda Manduwi – Economist, Policy Analyst, and Development Advocate
To understand how we got here, you have to go back to the very beginning — before Malawi was Malawi. When we transitioned from Nyasaland to independence, we inherited neither wealth nor infrastructure, but rather a set of arbitrary borders and an agrarian society locked into subsistence farming. Unlike countries whose independence struggles were closely tied to reclaiming economic wealth (land, oil, minerals), Malawi’s liberation was largely political — fighting for the right to govern ourselves, not necessarily the right to reclaim economic control, because there wasn’t much to reclaim.
Our first post-independence economic model, therefore, was designed by external forces, heavily reliant on donor funding, development assistance, and concessional loans to build our schools, hospitals, and roads. There was no blueprint for industrialization, no deliberate national strategy for wealth creation, and no institutional framework to support an indigenous economic system. We were simply placed into the global development pipeline — a “recipient country” in a world where others dictated the rules of wealth creation.
This donor-dependent DNA shaped everything from our budget process to our educational focus, which continues to churn out public administrators rather than innovators, because the very purpose of government was framed as the efficient disbursement of aid rather than the generation of wealth.
Vision 2020: A Broken Promise
Malawi tried, at least on paper, to carve out a national economic vision with Vision 2020 — a document that set out to transform Malawi into a middle-income country by the year 2020. It was ambitious, but ultimately, Vision 2020 became a cautionary tale in how not to plan for national development.
The document itself was well-written — it spoke of diversification, private sector development, and human capital investment — but it lacked institutional ownership. Each political administration interpreted it differently (or ignored it entirely). There were no enforcement mechanisms, no consistent monitoring frameworks, and most critically, no genuine political will to shift Malawi from being a receiver to a creator.
By 2020, we hadn’t achieved any of the targets. Malawi remained among the poorest countries in the world, with low productivity, weak export performance, and an economy still heavily dependent on subsistence agriculture.
The Malawi 2063 Mirage
Fast forward to Malawi 2063 (MW2063) — a far more structured vision, learning from the failures of Vision 2020. It lays out clear pillars: Agricultural Commercialization, Industrialization, and Urbanization, with a strong emphasis on self-reliance.
But the challenge is this: MW2063 was written for a country with an economy. It assumes a baseline level of industrial capacity, innovation ecosystems, and fiscal discipline that Malawi has never had. We skipped the foundational steps. We didn’t build an economy that could support MW2063 — we went straight to aspirations of self-reliance without ever defining what we were relying on.
The 2025/2026 Budget: A Case Study in Dysfunction
The 2025/2026 national budget is a perfect case study of this disconnect. It is ambitious on paper, with its focus on economic stabilization, social protection, and infrastructure development. But the numbers betray the story.
- Public debt stands at K16.19 trillion (86.4% of GDP).
- Interest payments alone will consume K2.17 trillion — nearly half of domestic revenue.
- Education gets K1.3 trillion, Health K741 billion, and Agriculture K693 billion — all critical sectors, yet overshadowed by debt servicing.
- The fiscal deficit is K2.47 trillion, to be largely financed through domestic borrowing — essentially, borrowing from an already empty well.
This is not a development budget; it’s a survival budget. It is a desperate attempt to keep the lights on — paying salaries, buying fertilizer, patching roads — while mortgaging the future. It is a budget of consumption, not creation.
Half the money goes to paying for past mistakes — loans acquired to fund programs that either failed or barely moved the needle on productivity. This is why, year after year, we “invest” billions in agriculture and yet still face food insecurity. This is why infrastructure projects stall halfway and foreign exchange shortages cripple businesses.
The Structural Trap: A System Built to Receive
The truth is, Malawi’s budgetary process was never built to drive economic growth. It was built to manage aid flows. I’ve personally played my part in this: write proposals to please donors. We structure projects to fit external funding cycles. Even the language of our policy documents — “capacity building,” “resilience,” “poverty reduction” — is designed to secure grants, not to stimulate industries.
That is why, despite decades of “development assistance,” we have no industrial base to speak of. Our exports are almost exclusively raw materials, and our imports are finished products. We borrow to buy what we should be producing — and when the bill comes due, we borrow again to pay the interest.
We Never Had an Economy — But We Can Build One
The point of this article is not to lament, but to provoke a national reckoning. We must admit that we have never truly had an economy — only a flow of aid, debt, and subsistence activity masquerading as GDP.
But admitting this is liberating — because it means we can finally stop patching a broken system and start building a new one.
- We need to rewrite the purpose of education — from training civil servants to training innovators, technologists, engineers, and entrepreneurs.
- We need to build industries — not just farms, but agro-processing plants, energy hubs, technology incubators, and creative economies.
- We need to shift our fiscal mindset — from spending to investing. Every kwacha must be judged not by how quickly it can be spent, but by how much value it creates.
- We need to radically rethink governance — not just who holds office, but how policies are made, tracked, and enforced.
Above all, we need to break the psychological dependency on external validation. For too long, we have defined success as donor conferences, funding approvals, and “commendations” from development partners. Real success will come when we generate wealth — not when we receive grants.
A Call to My Generation
As a young economist and policy analyst, I do not write this from a distance. I am part of the generation inheriting this broken system — and I do not accept it. The Malawi 2063 generation must be the first to say: We will build the economy Malawi never had.
This is not a call to government alone. It is a call to students, entrepreneurs, creators, and innovators. Our future will not be written in donor memos. It will be written in startups, in inventions, in ideas that begin in villages and scale to the world.
We never had an economy, but we are going to build one.
Still in love with Malawi,
Ntha
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