Malawi must learn from landlocked Rwanda and Botswana which enviably fall in the global top league of doing business, attracting investors and trade says an expert.
Responding to an e-mail on Sunday on how Malawi can best improve the way of doing business, attracting investment and consequently export more, a trade expert Victor Mponda-Banda said the country has natural resources but needs to work tirelessly on improving its doing business to exploit them.
“We have potential just like Rwanda and Botswana. However, policy makers are not motivated by the need to maximise net goal achievement but merely satisfy demand for modest progress. We must search until we find one best way. We must not stop the search whenever a modest arrangement is found. We have potential in tourism, mining and agriculture just like Botswana, but we need to improve the quality of trade and investment promotion institutions like Malawi Investment Trade Centre (Mitc), and Malawi Bureau of Standards (MBS) in terms of personnel and actual operations. Mitc needs to be a one-stop-shop in the real sense of the word. For instance, in Rwanda one opens a business in three days.
“We need a distinct configuration of policies: trade policy, investment policy and the industrial policy, however, these need to talk to each other and zero down to specific measures not just general statements. We need to make serious improvements in doing business procedures, otherwise we will hardly attract any serious investors because they are like shoppers and will go for the best deals. Investors will not wait to have power connected. Investors require an efficient transport network that is good roads connecting to the rest of the region, and good air transport infrastructure to attract efficient operators. We need serious reforms which will cut down bureaucracy, on transactions, such as land, energy, telecommunication, immigration, and tax,” said Mponda-Banda.
Malawi’s main exports are unprocessed agricultural produce with tobacco at the top of the pack. In addition, the country lacks serious investors thanks to poor doing business procedures and infrastructure that has seen serious prospective businesses shy away from the country and opt for better performing economies.
Last year, Malawi slumped six steps from 151 to 157 out of 185 economies in the Doing Business 2013 Report an indication that doing business is becoming more appalling in the country.
However, Rwanda and Botswana both landlocked sub-Saharan countries were ranked 52 and 59 respectively. Rwanda is taunted as the number two improver globally and top improver in sub-Saharan Africa.
To ensure that Malawi gallops on the doing business ranking, government last year announced that it is targeting the top 100 by 2017.
Government has since formed a high level committee on doing business, a move that has been commended in the Doing Business g7+ 2013 Report released last week. The committee comprises crucial stakeholders and partners that meet and map out strategies to enhance coordination of the reforms and seek more views from stakeholders on how quicker and better Malawi can reform the doing business environment.
Ministry of Industry and Trade spokesperson Wiskes Nkombezi in an e-mail in January this year said government and the ministry in particular has been working tirelessly on regulatory, institutional and procedure or process reforms to make it easier, cheaper and faster to do business in the country.
“During last year’s budget session, Parliament passed several bills including the Investment and Export Promotion Bill, Business Registration Bill and Malawi Bureau of Standards (Amendment) Bill. During the November sitting, more economic bills were passed into law and these included the Companies (Amendment) Bill and Business Licensing Bill. The ministry would like to push for more bills, particularly the Insolvency Bill, the Personal Property Bill and the Companies Bill.
“Under reforms, the business registry at the Office of the Registrar General has been computerised and will be operational soon after the gazetting of the operational guidelines and procedures. The ministry is also pushing for the finalisation of computerisation of the Land Registry in the Ministry of Lands. The Ministry of Industry and Trade is keen on making the MITC a vibrant one-stop-shop for investors and exporters,” said Nkombezi.
He added that all these efforts are aimed at making Malawi the most competitive market to do business in this region.
However, in the Doing Business 2013 Report Malawi made dealing with construction permits more expensive by increasing the cost to obtain the plan approval and to register the property. The report, however, noted that trading across borders became easier in Malawi thanks to improvements in customs clearance procedures and transport links between the port of Beira in Mozambique and Blantyre.
Specifically out of 185 economies, Malawi ranked 141 on starting a business, 175 on dealing with construction permits , 97 on registering property, 179 on getting electricity, 82 on protecting investors, 129 on getting credit, 58 on paying taxes, 168 on trading across borders, 144 on enforcing contracts, and 134 on resolving insolvency.