Industrial strategy misaligned with production, study shows

Malaw industrialisation strategy under Malawi 2063 (MW2063) is not fully aligned with the country’s production capabilities, with nearly half of the products prioritised under the blueprint defying its comparative advantages, a new study has found.

In a study titled ‘Development Agenda Gone wrong? Evidence from comparative advantage misalignment in Malawi’, University of Malawi economics lecturer Farai Chigaru found that Malawi is not naturally good at producing competitively 48 percent of the prioritised products while 26 percent are both unviable and lack potential.

Said Chigaru: “While product identification for prioritisation ought to be endogenous to factor endowment, no prior studies have assessed how the prioritised products in this agenda align with country-specific comparative advantages.

“In addition, no study has empirically examined Malawi’s development agenda via a comparative advantage alignment analysis.”

According to the study finding, 67 percent of products which Malawi has comparative advantages are experiencing declining competitiveness, raising concerns about the country’s capacity to build on existing strengths while pursuing industrial diversification.

MW2063 is built on three pillars: agricultural productivity and commercialisation, industrialisation and urbanisation, with industrialisation identifying priority products as drivers of economic growth.

These products were adopted from the Second Malawi National Export Strategy (NES II, 2021–2026), with MW2063 designed to integrate existing sectoral strategies as the successor to Vision 2020.

Some of the priority products, including tobacco, tea, sugar, cotton and pigeon peas, are already facing declining competitiveness, while others, such as soya beans, edible nuts and natural rubber, are also losing ground despite their export potential.

Already, a progress report in the 2026 Economic and Fiscal Policy Statement showed that government rolled out 87 percent of planned First 10-Year Implementation Plan (MIP-1) interventions, but only 40 percent are on track.

This is happening at a time Malawi remains trapped among African economies struggling with deep structural weaknesses, which according to the 2025 Real Economic Development Index published by the Business Council of Africa, is because to among others, policy inconsistencies that continue to slow economic transformation.

In an interview on Monday, Natonal Planning Commission director general Frederick Changaya said the paper reinforces the need for Malawi to prioritise high-value agricultural production, value addition and measurable outcomes to accelerate implementation of Malawi 2063.

He said: “The theory of change is simple: let every acre pay, every mine build and every factory add value.

“Why grow crops that earn farmers K1.8 million per hectare when the same land can generate K15 million? This calls for intentionality in selecting national priorities.”

The industrialisation pillar in MW2063 seeks to transform Malawi into a productive, export-oriented and self-reliant economy by 2030

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