Malawi’s government is struggling to recover MWK55.8 billion (approximately $32.3 million) in outstanding loans issued under its Mega Farms programme, raising fresh questions about the management of public agricultural financing and the safeguards used to ensure that government-backed credit reaches productive farms and is repaid.
Henry Msatilomo, director of the Mega Farms Unit, disclosed the outstanding debt when he appeared before Parliament’s Government Assurances and Public Reforms Committee alongside senior Ministry of Agriculture officials. Farmers have repaid MWK15 billion (about $8.7 million), representing approximately 21.2 per cent of the loans reported by programme officials. The government has since engaged seven debt-collection firms to pursue outstanding payments.
The figures presented to Parliament indicate that the programme received MWK57 billion (about $32.9 million) in financing, with accumulated interest adding another MWK13 billion (about $7.5 million). This brought the total obligation to around MWK70 billion (approximately $40.5 million).
The loans originated in the 2023/2024 farming season, when 212 contracted farmers cultivated 8,092 hectares and produced approximately 23,000 metric tonnes of maize. In the following season, the programme expanded considerably: 855 farmers cultivated 43,122 hectares and produced about 88,000 tonnes.
The government subsequently changed its approach, engaging five institutions to undertake production: the Lilongwe University of Agriculture and Natural Resources, Malawi Defence Force, Malawi Prison Service, Greenbelt Authority and Shire Valley Transformation Programme. Together, they cultivated 2,087 hectares and produced 6,811 tonnes of maize, according to the programme director.
The recovery challenge extends beyond farmers’ outstanding obligations. Suppliers who provided agricultural inputs worth MWK48 billion (about $27.7million) are still owed MWK27.9billion (about $16.1million). This creates an additional financial burden for businesses that supplied inputs in support of the programme and may constrain their ability to finance future agricultural seasons.
Msatilomo attributed slow loan recovery partly to legal challenges and inadequate collateral. Court injunctions obtained by some farmers had delayed recovery efforts. In a separate development, the High Court of Malawi’s Commercial Division discharged an injunction on August 28, 2026, that had prevented the Malawi Agricultural and Industrial Investment Corporation (MAIIC) from pursuing recovery of overdue loans. The ruling cleared a legal obstacle to recovery, although it did not guarantee that the outstanding funds would be collected.
The programme’s difficulties have prompted calls for changes in beneficiary selection, risk assessment and repayment arrangements. Agriculture experts have cited weaknesses in due diligence, while Mwapata Institute executive director William Chadza recommended better targeting, insurance coverage, adequate loan security and arrangements that allow lenders to recover repayments directly from proceeds when farmers sell their produce.
The financial problems are emerging against a wider food-security challenge. About four million Malawians were estimated to be facing hunger during the 2025/2026 period, while the government moved to import 200,000 metric tonnes of maize from Zambia. The contrast has intensified questions about how public agricultural investment can translate into sustained production and food availability.
NBF Insight
Malawi’s Mega Farms experience highlights a central challenge in agricultural development: financing production is only one part of building a commercially sustainable farming sector. Public credit must also be supported by sound beneficiary selection, viable farm business plans, adequate collateral or insurance, reliable markets and enforceable repayment agreements.
The programme’s production figures show that participating farmers expanded cultivation and increased maize output between the first two seasons. But production gains alone cannot establish whether the loans were commercially successful. That requires examining the value of crops sold, farm-level profitability, repayment capacity and how much public money can ultimately be recovered.
The outstanding debt also affects more than government finances. Unpaid input suppliers face their own cash-flow pressures, potentially weakening the businesses expected to support future production.
For Malawi, the priority is to recover what can legitimately be recovered while identifying the programme’s operational weaknesses and correcting them. Future agricultural financing should be assessed not only by hectares cultivated or tonnes harvested, but also by repayment performance, farmer profitability, supplier payments and the long-term sustainability of the credit system.
The broader lesson for African agricultural policy is clear: public financing can help commercialise farming, but without effective risk management and accountability, programmes intended to boost production can leave governments, farmers and suppliers carrying substantial financial exposure.
