Malawi is primarily an agricultural nation, with 54 % of its working force engaged in farming, fishing, and forestry. The nation has traditionally been self-sufficient in food, but malnutrition among children was a serious problem as the 1990s began. The principal crops are corn, sugarcane, fruits, vegetables, and peanuts. Major exports include tobacco, tea, sugar, and peanuts. A growing fishing industry, producing for domestic needs, is centered at Nkhotakota on the western shore of Lake Nyasa. In 1997 the catch was 56,564 metric tons. Major manufactures, principally for domestic consumption, include processed food, chemical products, textiles, and beverages. The national budget for 1992 included revenues of $416 million and expenditures of $498 million. Many Malawians work as migratory laborers in South Africa and other countries.

The government has sought to strengthen the agricultural area by encouraging integrated land use, higher crop yields, and irrigation schemes. In pursuit of these goals, several large-scale integrated rural development programs, covering one-fifth of the nation's land area, have been put into operation. These projects include extension services; credit and marketing facilities; physical infrastructures such as roads, buildings, and water supplies; health centres; afforestation units; and crop storage and protection facilities. Outside the main program areas, advisory services and educational programs are available, and the Malawi Young Pioneers, a national youth movement, trains more than 2,000 young men and women yearly in techniques of rural development.

Landlocked Malawi ranks among the world's least developed countries. The economy is predominately agricultural, with about 90% of the population living in rural areas. Agriculture accounts for 37% of GDP and 85% of export revenues. The economy depends on substantial inflows of economic assistance from the IMF, the World Bank, and individual donor nations. In late 2000, Malawi was approved for relief under the Heavily Indebted Poor Countries (HIPC) program. The government faces strong challenges, e.g., to fully develop a market economy, to improve educational facilities, to face up to environmental problems, and to deal with the rapidly growing problem of HIV/AIDS.