President Lazarus Chakwera has directed Ministry of Transport and Public Works to ensure clarity in its processes so that prospective investors in the transport sector are not scared away.
Speaking during the official launch of the 165-metre $13 million (about K10.4 billion) Shire North Railway Bridge in Balaka District yesterday, the President said no investor expressing interest to develop road and rail infrastructure should be subjected to multiple government offices with the same offer of investment.
He said: “I want this nonsense to stop because it is scaring away investors and developers.
“I can assure you that for every company that secures a contract to build a road or rail in Malawi, there are 20 others that give up on helping us because our processes for contracting out infrastructure projects like this are too unclear, too long, too slow and too cumbersome.”
Chakwera said in many cases, an investor would come into the country and go to the Ministry of Transport with intentions of constructing a road or rail. But he said such an investor would be referred to the Ministry of Finance for a letter of ‘no objection’ and later to the Ministry of Justice to have the memorandum of understanding (MoU) scrutinised before being sent back to the Ministry of Transport again and finally Public Private Partnership Commission (PPPC) for assistance.
The President said due to the redtape investors are made to wait several months without any response or decision; hence, they get tired and take their investment to other countries.
“That is why I am directing you to work with relevant MDAs [ministries, departments and agencies] to propose a new and better system, and I want that proposal submitted to me before the next sitting of Parliament,” he said.
He also directed Ministry of Transport to report to the Secretary for President and Cabinet (SPC) on progress.
The directive comes at a time when the country’s foreign direct investment (FDI) has been fluctuating owing to a number of factors.
A recent report by the United Nations Conference on Trade (Unctad) shows that Malawi’s FDI has been on the decline from $510 million (about K377 billion) in 2015 to $116 million (about K86 billion) in 2016 before reaching $90 million (about K67 billion) in 2017.
It declined further by 88 percent in 2019 to $98 million (about K7.74 billion) from $102 million (about K75 billion) in 2018.
Over these past five years, the leading sources of FDI have been Australia, China, India, Republic of Korea, India, United Arab Emirates, United Kingdom (UK), Northern Ireland and South Africa.
In 2014 under the former governing Democratic Progressive Party administration, government launched one-stop-shops, an arrangement where investors would access all relevant institutions. However, the initiative has not taken off as expected with some post office buildings earmarked for the project still unoperational.
Commenting on the importance of the Shire North Railway Bridge, Chakwera said it signifies a step in the right direction and that his administration’s goal is to have a rail system that is truly national.
The bridge on the railway line from Limbe in Blantyre to Nkaya in Balaka is expected to reduce transportation costs and spur economic development.
In her remarks, Deputy Minister of Transport and Public Works Nancy Mdooko said the ministry’s main goal is to reduce transport costs and ensure that transport does not constrain the economy.
“To this end, we have formulated a comprehensive National Transport Master Plan which will guide the sustainable development of an integrated multi modal transport sector for the next 16 years,” she said.
The master plan, Mdooko said, is advocating for increased use of cheaper modes of transport; meaning a shift from road transport, which hauls close to 90 percent of the country’s imports and exports.
On his part, Nacala Logistics chief executive officer Wellington Soares said they are committed to support the country’s rail system and they have the capacity to ensure the sector is uplifted.
The construction works began in 2018 and ended in May this year. It was being constructed by Central East African Railway (Cear) now Nacala Logistics.