Bond Market


The Reserve Bank of Malawi (RBM) is the principal issuer of Treasury bonds and Treasury bills on behalf of the Government of Malawi. Corporate entities may also issue debt to raise capital. Treasury bills are offered in three maturities: 91-d, 182-d and 364-days. Maturities range for Treasury Notes are between 2, 3, 4 and 5 years. Between 2012 and 2013, average yields across all maturities (91-d, 182-d, 364-d) increased: from 14.25% to 28.34% for the 91-d, from 15.86% to 30.94% for the 182-d, from 17.62% to 33.52% for the 364-d.


Primary market

Treasury securities auctions are conducted every Tuesday. Auctions are announced in press releases and published in local newspapers. The minimum amount to bid in T-bills is MWK 10,000 (MWK 5,000 for non-competitive bids) and any subsequent amounts must be in multiples of MWK 1,000. For the period 2012-13, subscriptions for treasury bills increased by 107.86%.

Secondary market

The secondary market for bonds is illiquid. The offer of bonds is limited and the majority of investors prefer a “buy and hold” strategy.


Investors can present their bids directly to one of the branches of the Central Bank. Prospectus and application forms for government securities are obtained from the RBM.


Interest income in excess of MWK 10,000 is taxable at the appropriate rate according to the Income Tax Act. Capital gains are taxed at the ordinary income tax rate up to 100% of the gain, but there are provisions for inflation adjustment. Capital gains can also be subdivided, depending on whether capital allowances were available on the assets.

Clearing, settlement and custody

Clearing and settlement is handled by licensed brokers or dealers. Regulations governing these procedures are contained in the Capital Market Development Act under the enforcement and supervision of the RBM. The funds arising from securities are physically held by custodians. The latter are, typically, vetted commercial banks approved by the RBM to handle these types of funds.

Market Restrictions

Openness to international investors

Malawi Stock Exchange (MSE) regulations limit participation of an individual foreign portfolio investor to a 10% maximum of any class of security and limit total foreign investment in any portfolio to a maximum of 49%.

Capital controls

Capital accounts were liberalized in the 1990s.

Restrictions on foreign exchange and profit repatriation

The foreign exchange market is fully liberalized. There are no restrictions on repatriation of dividends, lease repayments, and interest. Capital and loans can be freely remitted as long as they are obtained from foreign sources and registered with the RBM.

Investor Protection

Malawi’s Constitution prohibits expropriation of property without due compensation. Malawi has entered into bilateral investment protection and promotion agreements with a number of countries, giving additional assurances to investors on the security of their investments.