Digital transformation is well underway in Malawi. This technological evolution is driven by innovative applications and systems that are improving service delivery across sectors such as banking, education, healthcare, and agriculture. Although the transformation might not be massive now, the country shows great promise. But there are challenges that need to be overcome to get there.

Malawi’s surge of digital innovation

The Government of Malawi has played a significant role in championing digital transformation, setting policies for information, communication, and technology (ICT) growth since the 1990s. Its policies have given rise to incubators for digital solutions, providing fertile ground for fintech and agritech startups, and fostering partnerships and synergies. As a result, Malawi has witnessed a surge of digital innovation, impacting various sectors of the economy.

• Mobile Money: Mobile money services have become ubiquitous, facilitated by partnerships between mobile network operators and financial institutions. The growth has made financial transactions easier and more secure, particularly in rural areas where traditional banking infrastructure was limited. Notable applications like Airtel Money and Mpamba by Telekom Networks Malawi have played a crucial role in this transformation.

• Mobile Banking:  With the advent of mobile banking, people no longer need to queue at banking halls to transfer funds. Several mobile banking apps allow for convenient fund transfers, and most bills can now be paid through bank platforms or mobile money. Examples include the National Bank of Malawi’s MO266 app, Standard Bank Malawi mobile banking app, New Building Society Bank 247 Mobile Banking App, First Capital Bank Mobile App and First Discount Holdings Mobile banking app – FDH Smart App.

• Digital Education: Demand for higher education has spurred the growth of online learning. During the COVID-19 pandemic, Malawian universities embraced online learning platforms to continue educational activities. The pandemic also triggered the development of new digital education solutions, such as the Padizwe System for Digital Education, which includes a digital library of learning resources, continuous professional development for teachers, a school management system, an exam bank, and devices that contain the app. Post-pandemic, the trend continues, and more universities are complementing in-person training with digital education.

• Digital Health: Malawi has been implementing various digital health solutions, including the use of OpenLMIS by the Ministry of Health, which is an open-source web-based application for supply chain reporting that streamlines healthcare processes. In the wake of COVID-19, the adoption of digital health solutions surged as telemedicine and digital health platforms became vital for providing remote healthcare services. Drones are also being used for service delivery as in the case of VillageReach, which is supporting the Ministry of Health and local partners to use drones to transport lab samples, blood, vaccines, and medicines.

• Entrepreneurship and Startups: Malawi's startup ecosystem is slowly evolving, with tech entrepreneurs and innovators addressing social and economic challenges through technology. Companies like Sparc Limited, iMoSyS and mHub, and initiatives like Community-Based Broadband Operator Services (Yathu Yathu Data) by Universal Services Fund by MACRA, have emerged, leveraging innovation to create jobs in the country.

Several challenges hinder progress

Despite the progress made, several challenges hinder the full embrace of digital transformation in Malawi:

• Low Internet Quality and Penetration: With internet penetration at 14.6%, a significant portion of the population continues to lack access to connectivity, especially in rural areas.

• High Costs: Expensive devices and data plans limit access to digital activities for many Malawians.

• Limited Digital Literacy: Low levels of digital literacy hinder the adoption of technologies and innovation.

• Funding for Tech Startups: A high-cost environment for starting businesses and lack of capital have limited tech startups that could stimulate the economy and create jobs.

Unleashing the potential benefits of digital transformation

If Malawi can overcome these challenges, it stands to unlock a plethora of benefits through digital transformation.

Embracing innovative business models and fostering entrepreneurship can lead to accelerated economic growth, increased employment opportunities, and overall prosperity.

The country also stands to benefit from more inclusive development through digital transformation. If challenges such as device and internet access and digital literacy can be addressed, an increasing number of rural and marginalised people will be empowered through digital financial services and digital education and health services, among others.

Finally, Malawi can optimise resource allocation, enhance policymaking, and address social challenges by leveraging legislation and legal support to adopt and develop evidence-driven insights.

To actualise the potential into reality, there is a need for deliberate intensified efforts to promote digital literacy and technological skills among the population, invest in infrastructure to improve internet coverage and quality, and support tech entrepreneurs to allow innovative minds to flourish and expand the digital economy.

The Malawi Government has already set the pace with its Digitalisation Policy (draft), Digital Economy Strategy, Online Transaction and Cybersecurity Act, review of the National ICT Policy, and the Malawi 2063 Vision, demonstrating that digitalisation is the way forward. In addition, junior to senior levels of government have been participating in the Tony Blair Institute’s Digital Academy, which is upskilling civil servants to become digital transformation leaders.

Panoply Digital is proud to be supporting the development and delivery of the TBI Digital Academy. We believe that with the commitment of its government, people, and stakeholders, Malawi’s digital transformation journey promises to be an exciting one, offering immense opportunities for growth and development in the years to come.