Gaiatar, as already mentioned, is a great place to shop - good for locally made craft and Malawian-grown produce (teas, coffees, dried fruit and nuts).
It's also a lovely place to pull in for a cup of tea and a great cookie.
Many local carvers keep wonderful roadside shops filled with their carvings and craft. Often a few carvers will share a stall with a painter, jewellery maker and basket weavers (or will stock other crafters' wares for them) and one can spend a very happy time choosing the perfect memento to take home. It is worth bearing in mind, however, that the now-ubiquitous ebony wood is an endangered resource (an ebony tree takes 30 years to mature, and most of the few that are left grow in protected areas. So why not buy mahogany, a beautiful reddish colour, or one of the other hardwoods?)
But shopping in these local stalls is a great way to meet local people and to put some money back into the community.