President Bingu wa Mutharika, standing for a second term, is favoured by foreign investors because of reforms that have helped bring billions of dollars of debt relief and annual growth of 7 percent for the past three years.
But he faces a challenge from long-time opposition leader John Tembo, who is backed by former President Bakili Muluzi, whose own attempt to run was blocked by the courts in a ruling that has fanned tensions.
The election is a test of political stability in largely peaceful Malawi after a protracted power struggle between wa Mutharika and Muluzi prompted a failed impeachment bid and allegations of a coup plot, unnerving crucial Western donors.
Food security is the top issue for Malawi's 13 million people, two-thirds of whom live on less than $1 a day, and many voters credit the government's fertiliser subsidy programme with helping to increase food production, to the extent that Malawi now exports the staple maize to its neighbours.
"I am voting for food in the country," said market trader Chifundo Mvula, making clear her allegiance to the presidential camp despite voting in a traditional opposition stronghold.
Buoyant Growth
The Economist Intelligence Unit has forecast Malawi will have the world's fastest growing economy after Qatar this year, but annual gross domestic product is estimated at only $313 per capita and AIDS has orphaned about one million children.
Political upheavals have delayed approval for state budgets and rattled donors, who provide more than one third of budget financing for the tobacco-growing country which recently began producing uranium.
The opposition has raised concerns about the possibility of vote-rigging, and investors will be watching closely for signs of how Africa's democratic credentials are holding up after polls in Kenya and Zimbabwe unleashed violence last year.
Voting was peaceful and the head of the electoral commission, Anastasia Msosa, said turnout appeared higher than in 2004, when wa Mutharika won a vote marred by violence and accusations of rigging.
"The voting was conducted in an orderly manner without incidences of violence,"Msosa said in a statement.
Polls closed shortly after 1600 GMT and results are expected to start trickling in from 1800 GMT. Final results are expected at midday Wednesday.
Seven candidates, including one woman, are standing in the presidential election. One opinion poll done two months ago by the Afrobarometer research group with the University of Malawi has tipped wa Mutharika to win.
But the unlikely alliance of Tembo, a former leading figure in the government of late dictator Hastings Kamuzu Banda, and Muluzi, who toppled the longtime strongman in 1994, could pose a serious challenge.
