After USAID withdrawal, Malawi must embrace entrepreneurship to build economy

Malawi stands at a crossroads. The imminent withdrawal of USAID support, which will cost 5,000 jobs, is being framed as a disaster. And, on the surface, it certainly looks that way. For a small economy like ours—where unemployment is already flirting dangerously with the 90% mark—losing 5,000 breadwinners is more than just a statistic. It’s a tragedy that will ripple through families and communities, pulling thousands back into poverty and dependency.

But what if, instead of mourning this crisis, we saw it for what it truly is—an opportunity?

What if this moment, painful as it may be, is the push we need to finally break free from the cycle of donor dependence and take control of our own destiny? The truth is, no great economy has ever been built on handouts. The countries we admire today—China, South Korea, Singapore—did not rise to prosperity because foreign donors propped them up. They did it by fostering entrepreneurship, industrializing their economies, and making their labor force competitive on the global stage.

One thing is clear: Malawians are not lazy. We are entrepreneurs by nature, and this is evident in the thousands of shops, stalls, and informal businesses that line our streets and market squares across the country. From the bustling markets of Limbe to the vibrant trading centers of Mzuzu, business is in our DNA. Whether it’s women selling fresh produce in township markets or young men running small mobile money kiosks, entrepreneurship has always been the backbone of survival for many Malawians.

And it’s not just small-scale trading—Malawi has already proven that it can produce world-class entrepreneurs who build sustainable businesses and create jobs. Take, for instance, Wisely Phiri, the founder of Sparc Systems, a homegrown IT solutions company that has expanded beyond Malawi’s borders and now operates in multiple African countries. Through his vision and determination, Wisely Phiri has built a technology firm that employs thousands of Malawians, contributes significantly to the economy, and proves that we don’t have to rely on foreign corporations to build industries—we can do it ourselves.

If one Malawian can build a tech empire from the ground up, imagine what we could achieve as a nation if we supported and nurtured more entrepreneurs like him.

Let’s take China as an example. In the late 1970s, China was poor, agrarian, and reliant on foreign aid. But instead of remaining trapped in dependency, it opened its doors to small businesses, encouraged foreign investment, and aggressively promoted local manufacturing. Today, China is the world’s second-largest economy, not because it received aid, but because it created an environment where businesses could thrive.

South Korea followed a similar trajectory. In the 1950s, after the Korean War, it was one of the poorest nations on Earth. Today, it is an economic powerhouse, home to global brands like Samsung, Hyundai, and LG. How did it achieve this? By investing in entrepreneurship, manufacturing, and technology—creating jobs and industries that could sustain themselves.

Even Singapore, a tiny island with no natural resources, transformed itself from a struggling former colony into one of the world’s richest nations through smart policies that encouraged business growth, industrialization, and foreign direct investment.

If these nations could do it, why not Malawi?

One of the biggest strengths Malawi has—something that many of these economic giants lacked in their early days—is an incredibly cheap labor market. This is not a disadvantage; it is a powerful bargaining chip. Right now, Malawians form the backbone of South Africa’s farms, factories, and mines. Our people wake up before dawn, work under grueling conditions, and send money back home to keep their families afloat.

But here’s the question: if South African companies find Malawian labor so valuable, why are we not creating the same industries right here at home? Why should Malawians migrate to do the same jobs they could be doing in their own country?

Instead of exporting labor, we should be exporting finished goods. Instead of sending farmworkers to Israel, why not invite Israeli agribusinesses to lease land and invest in large-scale farming operations right here in Malawi? We have the land. We have the labor. What we lack is the political will and a clear strategy to turn these resources into wealth.

For Malawi to move forward, the government must make it easier to do business by cutting bureaucratic red tape, streamlining business registration, and creating tax incentives that encourage both local and foreign investment. If starting and running a business in Malawi becomes a simpler and more attractive process, more people will take the leap into entrepreneurship, and more investors will see Malawi as a place worth putting their money.

At the same time, the country must recognize that the foundation of any strong economy is not large corporations but small and medium-sized enterprises. Supporting Malawian entrepreneurs—whether they are in agriculture, manufacturing, technology, or services—will not only create jobs but also foster a culture of self-reliance and innovation. Without deliberate efforts to make financing accessible to small businesses, economic growth will remain stagnant.

Beyond supporting entrepreneurs, Malawi must aggressively position itself as a global manufacturing hub. The country’s low labor costs present an incredible opportunity to attract foreign companies looking for cheaper production alternatives. If China and Vietnam became manufacturing powerhouses by offering affordable labor, there is no reason why Malawi cannot do the same. By actively engaging global manufacturers and creating incentives for them to set up operations in the country, Malawi can create thousands of jobs and increase its export capacity.

Agriculture, which remains the backbone of Malawi’s economy, also needs urgent reform. Instead of continuing to export raw crops, the country must shift towards value addition through large-scale commercial farming and agro-processing. This would not only increase revenue from agricultural exports but also create employment opportunities along the value chain, from farming to packaging to distribution.

However, none of these changes will be possible without proper infrastructure. Investors will not bring their businesses to Malawi if there is no reliable electricity, good roads, or efficient water supply. The government must prioritize infrastructure development to make Malawi an attractive destination for investment and industrial growth.

Additionally, the global economy is shifting towards digital entrepreneurship, and Malawi must not be left behind. By improving internet accessibility and supporting digital startups, the country can tap into new economic opportunities in tech-based services, outsourcing, and e-commerce. If Kenya can become a leader in mobile money solutions with M-Pesa, what is stopping Malawi from pioneering its own digital innovations?

Malawi’s economy will not be saved by foreign donors. It will be saved by Malawians who are willing to take risks, start businesses, and create value. It will be saved by a government that understands that its role is not to hand out jobs but to create an environment where jobs can be created. It will be saved by investors who see Malawi not as a country waiting for help, but as a land of opportunity.

We have a choice: We can mourn the loss of USAID funding and brace for the economic shock, or we can take this moment to reimagine Malawi’s future. The second option is harder, but it is the only path to true prosperity.

For too long, we have been passengers in our own economic story. It’s time to take the wheel. It’s time to build.

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