Despite persistent power blackouts, business performance in 2017 slightly improved compared to 2016, a 2017 Malawi Business Climate survey report has shown.
Malawi Business Climate survey is a flagship report of the Malawi Confederation of Chambers of Commerce and Industry (MCCCI).
The annual survey measures the business climate in the country and the degree of conduciveness of the business climate.
According to the report, the majority of businesses interviewed this year rated 2017 business performance as good and fair compared to the ratings of very poor in 2016.
It says 46 percent of respondents said business performance was good and 32.1 percent rated it as fair.
In terms of business confidence, a qualitative index of scores of enterprises’ assessment of current as well as future expectations of business climate indicators, the report shows that business confidence improved in 2017 compared to 2016.
Reads the report: “The Business Confidence Index (BCI) in 2017 is calculated at 67 percent against 58.5 percent recorded in 2016. This shows that business confidence slightly improved by 8.5 percentage points in 2017 compared to 2016.”
“While current and expected business performance is projected to improve in 2017 to 26.92 percent from 17.16 percent in 2016 and 16.50 percent from 15. 69 percent in 2016 respectively, investment and employment outlook are projected to decline to 14 percent from 17.16 percent in 2016 and 13 percent from 17.16 percent in 2016 respectively.”
In terms of production capacity utilisation, the expected level of capacity utilisation shows that a total of 63.2 percent are producing below 70 percent compared to 74 percent in 2016 but the majority remains in the range of 50-70 percent for 2017 and the past two years.
But Bankers Association of Malawi (BAM) president Paul Guta pointed out that the banking sector has had little to smile about in 2017 although the macroeconomic environment has been fairly stable in 2017.
He said: “It has not been an easy road for banks this year. Default rates and cost of funding remained very high in the year. Other than this, issues around power also had a direct impact on operating costs of banks.
“To keep the ATMs up and running is a cost and these costs have been factored into the operating costs of banks. While economists have been taking a good route the expectation is that there would be a direct effect on the operations but power and default rates have made business tough.”
