Economist calls for fiscal, monetary, trade and regulatory reform to anchor Malawi’s recovery

Professor Paul Gadama, an economist, has urged the Malawi government to pay closer attention to four core policy levers — fiscal, monetary, regulatory and trade policy — arguing that a more coordinated approach across these areas is needed to address the country’s deepening economic challenges.

Gadama said sharper focus on these instruments could help shift Malawi’s economic debate away from political contestation and toward the structural issues underpinning the country’s difficulties, from persistent foreign exchange shortages to weak export performance.

On fiscal policy, he called for government borrowing to be directed increasingly toward investments capable of expanding the economy’s productive capacity, rather than financing consumption.

He also urged stronger domestic revenue mobilisation and improved efficiency in public expenditure — a combination aimed at narrowing the fiscal deficit without starving growth-enhancing spending.

On monetary policy, Gadama said the Reserve Bank of Malawi needed to strike a careful balance between managing inflation, preserving financial stability and maintaining appropriate liquidity conditions in the banking system — a task complicated by the current foreign exchange squeeze and its knock-on effects on prices.

On trade policy, he called for a decisive push to strengthen exports through agricultural commercialisation, expanded manufacturing capacity, greater value addition and diversification beyond Malawi’s relatively narrow export base, which remains heavily reliant on a small number of primary commodities, including tobacco.

Gadama also urged government to design a regulatory framework capable of protecting consumers while simultaneously fostering entrepreneurship, investment, innovation and productivity — arguing that overly restrictive or poorly designed regulation risks discouraging the private investment Malawi needs to diversify its economy.

“This is perhaps where the most important lesson lies: no single policy instrument can resolve all Malawi’s economic challenges,” Gadama said, framing his intervention as a call for coordinated reform across fiscal, monetary, trade and regulatory policy rather than reliance on any one lever in isolation.