* Mobilising local resources to transform Malawi’s economy is a pathway to dignity, sovereignty, and inclusive growth — built from within
* By mobilising its own fiat and fiduciary resources within a credible, rule-based system, the country can finance the industries, infrastructure, and social systems required for sustained prosperity
By Duncan Mlanjira
As Malawi, under the Democratic Progressive Party (DPP) administration, grapples on how to turn around the country’s ailing economy inherited from the Malawi Congress Party (MCP), economic experts continue to offer right pathways towards achieving success.
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UK-based economic expert, Thomas Ngoma — who is an executive management consultant with over 35 years’ experience advising clients on strategic business transformation, both in public and private sector regulated environments — believes that “Malawi does not need to wait for external aid or debt to transform but knowledge and technical know-how”.
In his contribution on HardTalk WhatsApp forum (Banking, Finance & Insurance), Ngoma suggests that Malawi needs to mobilise her local resources if the economy is to transform, saying: “By mobilising its own fiat and fiduciary resources within a credible, rule-based system, the country can finance the industries, infrastructure, and social systems required for sustained prosperity.
“This is a pathway to dignity, sovereignty, and inclusive growth — built from within,” says, whose core proposition is based on Malawi having “the latent capacity to double its gross domes product (GDP) and accelerate human development by strategically mobilising its own domestic resources of fiat money, fiduciary instruments, and real-sector assets to finance productive investment”.
“This approach reduces dependence on external borrowing and aid, strengthens sovereignty, and builds a self-sustaining growth engine rooted in national capabilities.”
Why domestic resource mobilisation matters
* Sovereign control: Financing development from within allows Malawi to set its own priorities without donor conditionalities.
* Lower cost of capital: Local-currency financing avoids the exchange-rate risks and high interest burdens associated with foreign debt. Ngoma qualifies this by emphasising that local interest rates and inflation must come down significantly.
* Economic resilience: A diversified manufacturing, mining, agriculture, services, infrastructure etc. Internally financed investment programme reduces vulnerability to external shocks. Not waiting for ‘as and when donor funds will be available’.
* Multiplier effects: Domestic spending on infrastructure, industry, and services circulates within the economy, creating jobs and expanding the tax base. This will also ensure the MKW strengthens and stabilises.
The role of fiat and fiduciary money
When used responsibly within a rule-based framework at the Reserve Bank of Malawi (RBM), Ngoma stresses that fiat money (government-issued Kwacha), can finance high-return public investments such as energy generation & transmission; transport & logistics infrastructure; water & irrigation systems; and digital public infrastructure.
“These investments expand productive capacity, enabling the economy to absorb new money without triggering inflation,” he says, and on fiduciary instruments (non-cash financial claims), he suggests that the authorities “can deploy a suite of fiduciary instruments to mobilise capital without printing money or borrowing externally”.
These include guarantees and risk-sharing facilities to unlock private investment; blended finance structures that crowd in domestic banks and pension funds, instruments of which do not yet exist in Malawi and sector-specific investment vehicles for agriculture, mining, manufacturing and SMEs — most of which are not yet intriduced in the country.
He also suggests “payment-backed instruments such as escrowed receivables, supply-chain finance, and performance-based contracts including futures and options derivatives — these tools convert future cash flows, assets, and productivity gains into investable capital today”.
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Priority investment areas
They include industrialisation; steel manufacturing; agro-processing zones; fertiliser & input manufacturing; light manufacturing & assembly; mining value addition (rare earths, phosphates, construction materials); infrastructure (roads, rail, and ports to reduce logistics costs.
Others are energy systems to eliminate load shedding; water & sanitation for health and productivity; modernised healthcare infrastructure; education & skills development aligned with industrial needs; and digital identity (payments and data systems).
A rule-based framework for credibility
To avoid inflation and maintain investor confidence, Ngoma suggests that domestic resource mobilisation must be anchored in clear fiscal rules at Treasury; transparent governance of investment vehicles; and independent oversight of monetary and fiduciary instruments.
As well as strong project appraisal and procurement systems and rule-based monetary policy of currency board, which would ensure that “every kwacha mobilised is matched by real economic value”.
The expected outcomes
With disciplined execution, Malawi can achieve GDP doubling within a decade through productivity-driven growth; mass job creation in industry, construction and services; reduced import dependence and improved trade balance; higher domestic savings & investment rates; and a stronger, more resilient state capable of financing its own development.
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