The Copper Queens made the perfect start when Barbra Banda fired home from long range inside the opening minute to score her fifth goal of the tournament.
Zambia continued to dominate and doubled their advantage eight minutes before half-time. Margaret Belemu’s cutback found Prisca Chilufya, who finished confidently to make it 2-0.
Knowing qualification could depend on goal difference, Malawi came out with greater determination after the break.
Tabitha Chawinga gave the Scorchers hope in the 72nd minute when she beat two defenders before finishing low past the goalkeeper.
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Zambia searched for the goal that could have changed the group standings, and Kabange Mupopo came close late on, only to see her effort strike the woodwork.
Despite the defeat, Malawi progressed to the quarter-finals and finished top of Group C on the tiebreak criteria after ending level on six points with both Nigeria and Zambia.
Nigeria also advanced with six points, while Zambia were eliminated despite winning two of their three group matches. Egypt finished bottom of the group after losing all three matches.