Africa-Press – Malawi. Figures from the Malawi Investment and Trade Centre (MITC) show that in the past five years, the country has attracted investment pledges of up to $4.2 billion.
The pledges have been fluctuating in the past half-decade, from $780.9 million in the 2017-18 financial year. The highest amount of pledges was recorded in the 2019-20 financial year when they reached $1,28 billion before a sharp drop to $69.7 million in 2020-21.
In 2021/22 the investment pledges picked up to $808.4 million. In the five year period the total pledges came from 247 companies. However, there is little or nothing to show from the pledges as the country is yet to witness actual investment on the ground.
In an email response to a questionnaire, MITC Chief Executive Officer Paul Kwengwere said 88 percent of the investors were interested in the energy, manufacturing, agriculture and agro-processing, ICT and mining sectors.
“In certain cases like mega energy projects, it may take up to 36 months or more. However, in most projects we expect about 12 to 24 months. Our Investment Facilitation Department is currently doing a validation exercise for pledges that were done about 24 months ago and beyond. We, however, expect at least 50 percent of projects that were pledged before 2020.
“We have had many inquiries, especially during and after Dubai Expo 2020. We are following up on those enquiries. The pledges as at August 2022 stand at $765 million in sectors including energy, construction, mining and agriculture or agro-processing,” Kwengwere said.
Economic expert Betchani Tchereni said for people to commit resources to such endeavours, they want to be sure about the economic environment which has been unlike the local economy.
“The past three years have been volatile, scarcity of foreign currency and Covid pandemic. As such, people may be trying to play it safe before resources are committed
“The number one thing for us to consider is moving forward with our own home-grown industries. Those people we so desire to invest here have a home in which they invest. We too can invest in our own industries,” Tchereni said.
In a recent interview president of the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) Lekani Katandula urged the government to put clear incentives for investors to spur investments from the private sector. Katandula said currently there is a lot of uncertainty on incentives which frustrates the private sector.
“If I look at the power sector as an example, we have some regulations that say if you invest more than $30 million then a committee comprising the governor of the Reserve Bank of Malawi, the [Malawi Revenue Authority] MRA and a few others could assess how much tax incentive to give you which could be variable depending on how they asses the entire project.
“That is not a fantastic way of attracting investment, when investors are coming in they do not want that kind of uncertainty. It is a lot better to say if you meet the following conditions these are the incentives that you will access which is a lot better for the investor to factor into their assessments before they decide to invest,” Katundula said.
According to Malawi’s long term development plan the Malawi 2063, the country’s ease of doing business score, while slightly improving, stands at 60.9 as of 2020 with a ranking of 109 out of 128 countries.
The plan indicates that the country shall create a conducive environment for doing business by streamlining bureaucratic processes for investment and developing economic infrastructure.
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