The informal economic resilience: The cost of doing business in Malawi

9 Min Read

LILONGWE — (MaraviPost) – A routine minibus journey in Malawi can offer an unexpected window into the ingenuity, determination and difficulties that shape the country’s small-business economy.

During a recent journey, The Maravi Post encountered a minibus carrying passengers alongside a substantial quantity of luggage, including goods apparently purchased in Lilongwe on behalf of a trader in Mchinji who intended to resell them after transporting them across the district.

What might appear to be an ordinary passenger trip was, in reality, also part of a small commercial supply chain linking traders and consumers across different parts of the country.

The experience also raised questions about public transport regulation and the conditions under which Malawians conduct business.

The journey, observed by The Maravi Post, involved a brief stop at the Area 3 police roadblock near the Lilongwe Bridge before the vehicle was allowed to continue.

The minibus appeared heavily loaded with passengers and luggage, raising concerns about passenger comfort and road-safety enforcement.

The observations form the basis of this opinion article and should be understood as commentary on a broader everyday experience rather than an allegation against any particular police officer, transport operator or passenger.

For many Malawians, business begins wherever an opportunity can be found.

The trader from Mchinji who had arranged for goods to be purchased in Lilongwe is an example of a practical business model that operates largely outside the formal structures associated with large companies.

A person in one town identifies a product that can be obtained elsewhere, finds someone who can purchase it, arranges transportation and eventually sells it in the local market.

There may be no sophisticated warehouse, company fleet or national distribution network behind the transaction.

There may simply be a phone call, an agreement between two people, money changing hands and a minibus carrying the goods to their final destination.

Yet that simple arrangement represents an important part of Malawi’s commercial life.

It demonstrates a mindset built around survival, opportunity and resourcefulness.

Malawians frequently find ways to connect supply and demand despite limited capital, expensive transportation and inadequate infrastructure.

Someone in Mchinji may know that a particular product is cheaper or more readily available in Lilongwe.

Rather than travelling personally, the trader can ask someone in the capital to purchase the goods and send them through public transport.

The arrangement saves time and potentially reduces costs.

It also creates a small network of economic relationships involving buyers, sellers, transport operators and customers.

This is one of the less visible sides of entrepreneurship in Malawi.

When discussions about business focus on large companies, factories, banks and formal retailers, it is easy to overlook the thousands of small transactions taking place every day between towns and trading centres.

But these transactions keep households earning income and markets supplied.

They also reveal something important about the Malawian business mindset: people are prepared to make use of whatever resources are available to them.

The minibus, for example, is not simply a means of moving passengers.

For many small traders, it is also part of the distribution system.

Goods can travel from Lilongwe to Mchinji, from Blantyre to Zomba, from Mzuzu to surrounding districts and between numerous smaller trading centres through public transport.

This informal distribution network exists because the formal logistics system is often inaccessible or too expensive for small entrepreneurs.

However, the same journey also illustrates the difficult environment in which these businesses operate.

After leaving Lilongwe, the minibus stopped at an Area 3 police roadblock near the Lilongwe Bridge.

The stop lasted approximately five minutes.

The vehicle then continued its journey.

For a passenger observing the vehicle’s heavy load, the brief inspection naturally raised questions about the effectiveness of traffic enforcement.

What is the purpose of roadblocks if vehicles that appear overloaded are allowed to continue without their condition being addressed?

This is not an argument against traffic policing.

On the contrary, effective enforcement is essential.

Roadblocks should help ensure that vehicles comply with safety requirements, that passengers are protected and that transport operators are held to appropriate standards.

But enforcement becomes less meaningful when passengers perceive that obvious safety concerns are being overlooked.

The issue is particularly important in public transport, where passengers often have little control over how a vehicle is loaded or operated.

A passenger may choose a particular minibus because it is available, only to discover that the vehicle is carrying more luggage or passengers than is comfortable.

In this case, the alternative was hardly attractive.

Another minibus had only one passenger.

Waiting for it to fill up could have taken a considerable amount of time.

The choice therefore became one between immediate travel in an uncomfortable, heavily loaded vehicle and an uncertain wait for a less crowded alternative.

For someone who needs to reach a destination on time, the decision is obvious.

Board the available minibus.

This is where the everyday realities of Malawi’s transport system meet the country’s economic realities.

People make compromises because they have limited alternatives.

A passenger may tolerate discomfort because arriving late could mean losing a day’s income, missing an appointment, failing to attend an important meeting or delaying a business transaction.

Similarly, a small trader may use a crowded minibus to move merchandise because hiring a dedicated vehicle would cost more than the business can afford.

The result is a system that functions, but not necessarily in the way an efficient formal economy would be expected to function.

Malawi’s informal economy has enormous resilience, but resilience should not be confused with comfort or efficiency.

People can adapt to poor systems for years, but that does not mean those systems should remain unchanged.

The experience also raises questions about the relationship between regulation and economic activity.

Regulation is necessary to protect passengers and maintain standards. But regulation must also be predictable, transparent and fairly applied.

Transport operators need to know what is permitted.

Passengers need confidence that safety rules are being enforced.

Traders need reliable ways of moving goods.

And traffic authorities need the resources, independence and institutional discipline to enforce regulations consistently.

When these elements work together, regulation can strengthen commerce rather than obstruct it.

The Mchinji trader’s arrangement also demonstrates how technology and personal networks are changing small-scale business.

A trader no longer necessarily needs to travel to Lilongwe to identify and purchase goods.

A trusted contact can do it on their behalf.

The buyer can then arrange payment and transportation remotely.

This creates a basic form of decentralised commerce in which information and trust substitute for expensive physical infrastructure.

It is a business model built on relationships.

But it also depends heavily on trust.

The person purchasing the goods must be trusted to buy the correct products.

The transporter must deliver them.

The recipient must pay as agreed.

And the eventual customer must be willing to purchase the merchandise.

Where formal business systems are weak, personal relationships become economic infrastructure.

That is an important characteristic of entrepreneurship in Malawi.

The lesson from this journey is therefore not simply that a minibus was carrying too much luggage.

The deeper lesson is that ordinary Malawians are constantly creating economic solutions within difficult circumstances.

They identify opportunities, establish networks, move goods, find customers and keep businesses operating despite the limitations around them.

This entrepreneurial instinct deserves recognition.

But it also deserves a better environment.

Malawi needs a transport system that is safe enough for passengers and efficient enough for traders.

It needs stronger logistics infrastructure.

It needs predictable enforcement of road regulations.

And it needs policies that allow small businesses to move gradually from survival-based commerce into sustainable enterprises.

The trader in Mchinji should not have to depend indefinitely on an overloaded passenger vehicle to move goods from Lilongwe.

There should eventually be affordable and reliable commercial transport options designed for small traders.

At the same time, passengers should not have to choose between discomfort and potentially losing hours waiting for another minibus.

Public transport should serve both mobility and economic activity without compromising safety.

The experience also challenges policymakers to look beyond headline economic indicators.

Gross domestic product figures, inflation rates and investment statistics are important, but they do not always capture the ingenuity taking place in ordinary communities.

Economic activity is happening in minibuses, markets, roadside shops, homes and small trading centres.

It is happening when one person in Mchinji orders goods from Lilongwe.

It is happening when another person purchases those goods on their behalf.

It is happening when the products are transported hundreds or dozens of kilometres and eventually sold to another customer.

That is business too.

The Malawian mindset in business is therefore not necessarily defined by large capital or sophisticated corporate structures.

It is often defined by adaptability.

People work with what they have.

They take calculated risks.

They build relationships.

They identify gaps in the market.

And they keep moving.

But the country should not romanticise hardship.

Entrepreneurial resilience should be supported by institutions capable of making business safer, more efficient and more predictable.

The minibus journey may have lasted only a limited period, but it revealed a much larger national story.

It showed Malawians finding ways to trade across distances while navigating the limitations of public transport.

It showed a passenger choosing an uncomfortable journey because time mattered.

And it raised questions about whether traffic enforcement is sufficiently effective to protect passengers from unsafe conditions.

Ultimately, the story is about more than one minibus or one trader.

It is about a country whose people continue to create economic opportunities despite significant constraints.

The challenge for government and institutions is to ensure that this resilience is not simply a response to difficult circumstances.

Malawians have demonstrated that they know how to do business. The next challenge is to build an environment in which they can do that business safely, efficiently and sustainably.

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