Editor’s note: I would read Malawi’s poor economic freedom ranking as one useful signal, but not the whole story. Indexes can highlight real institutional problems, including weak infrastructure, limited property rights, inefficient regulation, and low confidence for investors. But they can also flatten a country’s lived reality into a single score. For Malawi, the deeper issue is how economic rules, climate vulnerability, food insecurity, public debt, and rural poverty interact. A reform agenda that improves business conditions but leaves smallholder farmers, women, and low-income households more exposed would not be sustainable development. The test should be whether reform expands real opportunity, resilience, and dignity for the people most affected by economic instability.
Look Beyond the Ranking to the Pressures Behind It
Economic freedom rankings can be useful because they draw attention to institutions. Property rights, regulatory efficiency, judicial capacity, inflation, trade rules, and access to finance all shape whether people can start businesses, invest, farm productively, and plan for the future. In Malawi’s case, the ranking points to serious constraints that many citizens already experience in daily life.
But the ranking should be read alongside the country’s wider economic crisis. Malawi is not only dealing with slow regulatory reform. It is also facing high inflation, pressure on the currency, food insecurity, public debt, foreign-exchange shortages, and climate shocks that repeatedly hit agriculture. These pressures make reform more difficult because households, businesses, and government agencies are all operating with less room to absorb mistakes.
For ordinary Malawians, the issue is not abstract “freedom” in the language of an index. It is whether a farmer can access inputs on time, whether a trader can import goods without crippling currency shortages, whether a small business can get credit, whether a family can afford food, and whether public money is being spent in ways that build long-term resilience rather than short-term political relief.
This is why agriculture remains central. Malawi’s economy depends heavily on agriculture, but much of that farming is rain-fed and vulnerable to drought, floods, erratic rainfall, and rising input costs. When harvests fail or maize prices rise, the effects move quickly through the whole economy. Food insecurity increases, inflation rises, household spending falls, and pressure on public finances grows.
The debate over fertilizer subsidies should be understood in that context. If subsidies are poorly targeted, delayed, politicised, or vulnerable to corruption, they can drain public resources without transforming productivity. But simply scrapping support without a better alternative could also hurt smallholder farmers who are already exposed to climate and price shocks. The more useful question is how agricultural spending can shift from repeated emergency support toward resilience.
That could include better irrigation, storage, rural roads, extension services, climate information, soil health, diversified crops, access to markets, and finance for farmers who can create jobs and strengthen local food systems. It also means supporting women farmers and rural households who often carry the heaviest burden when food, water, and income become insecure.
Land tenure is another practical issue. If farmers and small businesses lack secure rights, they may be less willing or able to invest in long-term improvements. Secure land rights can support better planning, access to finance, and more productive use of land. But land reform must be handled carefully, with attention to customary systems, community rights, gender equality, and the risk of concentrating land in fewer hands.
Malawi 2063 sets out an ambition for agriculture commercialisation, industrialisation, and urbanisation. Those goals make sense on paper, but they will depend on implementation. Industrialisation requires reliable power, transport, finance, skills, and policy consistency. Urbanisation needs planning, housing, sanitation, jobs, and public services. Agricultural commercialisation must not simply mean replacing smallholders with large operations unless it also creates fair livelihoods and food security.
The most sustainable reform path is likely to be one that connects macroeconomic stability with local resilience. Malawi needs stronger institutions and a more predictable business environment, but it also needs climate adaptation, rural investment, accountable public spending, and protection for people already living close to the poverty line.
A poor economic freedom score should therefore be treated as a starting point for deeper questions:
Which reforms would actually improve daily life for low-income households?
How can Malawi reduce dependency on rain-fed agriculture without excluding small farmers?
Where is public spending failing to deliver long-term value?
How can property rights and investment be improved without weakening community protections?
What would make rural livelihoods more resilient to climate shocks?
How can economic reform support women, informal workers, and young people, not only formal investors?
Rankings can help identify weaknesses, but they cannot define a development strategy by themselves. For Malawi, the goal should not be to climb an index at any cost. It should be to build an economy that is more stable, more productive, more climate-resilient, and more capable of reducing poverty in real life.
Malawi continues to be rated “mostly unfree economy” as seen in the latest 2025 index of Economic Freedom, an annual guide published by the Wall Street Journal and the Heritage Foundation.
Malawi’s economic freedom score at 50.9 percent makes the economy of the South East African country the 146th freest in the 2025 index which has ranked 177 economies across the world. This is a drop by 1.2 points from its 2024 ranking. The country mostly known for its beautiful lake and the friendly people is ranked 34th out of 47 countries in Sub-Saharan region. The score is lower than the world and regional averages.
Economic freedom is defined in the report as the fundamental right of every human being to control their own labour and property. The index covers rule of law, government size, regulatory efficiency and open markets.
The country’s last best performance in the ranking was in 2014 when it was ranked 22nd out of 46 Sub-Saharan countries. The report says Malawi lags behind in competitiveness and promotion of the broad-based economic activity that is needed to reduce poverty. It points out the poor state of its infrastructure and inefficiency as some of the bottlenecks.
“The poor quality of physical and legal infrastructure is exacerbated by the government’s inefficiency and this has been a serious impediment to long-term economic development. The inefficient business framework is slowly being improved,” the report says.
It goes on to say that labour regulations are not generally enforced, and the labour market remains poorly developed in a country where majority are still employed outside the formal sector, largely in agriculture.
On monetary freedom, the report says the environment is very inefficient and not conducive to entrepreneurial activity and the monetary freedom score is below the world average.
On rule of law, the report says it is still weak. The protection of property rights remains poor with more than half of the arable land still untitled while the judiciary is seen as independent, it is inefficient and weakened by poor record keeping, a shortage of attorneys and other trained personnel, heavy caseloads and lack of resources. The judiciary effectiveness score slightly above 50 percent while government integrity score is at 34.4 percent which is a score below the world average.
The report observes that progress on improving Malawi’s regulatory framework has been slow with the inefficient state-owned enterprises continuing to undercut the development of a dynamic private sector with government spending nearly US$190 million on subsidies each year for the past five years, with 50 percent of it being spent on agriculture yet with little returns.
Government has for the past two decades running a fertilizer subsidy programme targeting 2 million subsistence farmers with two 50 kilogrammes bags of urea and NPK. While this had success in making the country food secure in its early years during the leadership of third president, Bingu Wa Mutharika, the programme has seldom helped the country since.
The programme has faced several challenges such as low supply at selling points, accusations of corruption and a lack of support from suppliers which has led to agriculture experts to question its effectiveness and recommending a shift to large scale farming as an alternative. However, despite the programme having gone through four presidents since inception, none has been bold enough to scarap off in favour of a more effective and sustainable intervention.
For the past decade, Malawi has been experiencing perpetual food insecurity which has led to high inflation and a weakened currency which at the moment is trading 4000 Kwacha to US$1, a 300 percent loss of value as compared to four years ago.
Various stakeholders have been calling for the abolishment of the fertilizer subsidy programme arguing it drains the public purse yet delivering and are calling for other investment ventures within the sector with potential larger returns as pointed out by one agriculture expert, Tamani Mvula who says, current fertilizer subsidy set up which eats out 45 percent of Malawi’s agriculture budget, is not bringing desirable results.
“Despite the large investment in the farm inputs subsidy programme which targets maize, production only increased by 230,000 metric tonnes between 2022 and 2023. It is time we need to focus on large scale farmers who through the subsidy, can create jobs for the poor while making the country food secure,” he said.
Another expert, Esmie Kanyumbu says the number of people living in poverty is expected to increase this year amidst the challenging economic environment and the rising food insecurity, with an additional people falling below the $2.15 per day threshold.
“Due to economic challenges and the rising food insecurity, an additional 417,000 people will fall below the poverty line which will bring the total number of people living in poverty in Malawi to 15.8 million out of the 21 million population the country has,” she said.
Malawi’s economy is heavily dependent on agriculture which employs over 80 percent of the population. However, most of the farming is rain-fed and with climate change nowadays, it is vulnerable to external shocks, particularly climatic shocks.
Recently, government launched the Malawi 2063 Vision which is a blueprint that aims to transform the country into a wealthy, self-reliant, industrialized upper-middle-income country through a focus on agriculture commercialization, industrialization and urbanization.
The Heritage Foundation uses twelve economic freedoms index namely Property Rights, Government Integrity, Judicial Effectiveness, Tax Burden, Government Spending, Fiscal Health, Business Freedom, Labour Freedom, Monetary Freedom, Trade Freedom, Investment Freedom and Financial Freedom to rate countries with the following score rates; Free, Mostly Free, Moderately Free, Mostly Unfree and Repressed.
In the latest ranking, a total of 176 countries were rated with only three earning a designation of economically “free” by scoring 80 or more, 26 earned a designation of “mostly free” by scoring between 70.0 to 79.9, and an additional 58 countries were considered at least “moderately free” with scores of 60.0 to 69.9. Thus, a total of 87 countries, or slightly less than half of the 176 countries graded, have institutional environments in which individuals and private enterprises benefit from at least a moderate degree of economic freedom in the pursuit of greater economic development and prosperity.
About 50 percent of the countries graded in the 2025 Index, a total of 89, have registered economic freedom scores below 60. Of those, 60 economies are considered “mostly unfree” with scores of 50.0 to 59.9 while 29 countries, including China and Iran are in the economically “repressed” category.
There has been a mixed score for Malawi’s three neighbours with Tanzania ranked highest at 92 with the score of 59.3 while Zambia is four steps above Malawi with a score of 50.9, and Mozambique is one step below with a score of 50.7.
Singapore continues to be the world’s freest economy, demonstrating a consistently high level of economic resilience and prosperity. Switzerland comes second, followed by Ireland. Republic of China-Taiwan, is fourth, a highest ever position it has achieved in the Index of Economic Freedom.