President Lazarus Chakwera yesterday said his administration is pursuing policies that will attract foreign direct investment (FDI) into the country to help advance efforts to get Malawi out of poverty.
While issuing a fresh assurance to potential investors that his government will not let bureaucracy hinder the inflow of FDI, the President reaffirmed his administration’s declaration of zero-tolerance to corruption. He said high corruption levels in previous regimes scared away potential investors.
Chakwera advanced his agenda during a live virtual interview held at Kamuzu Palace in Lilongwe and hosted by Invest Africa, a leading pan-African business platform that promotes trade and investment in Africa, which was attended by over 500 participants across the globe.
He said: “We are rich with resources, but we have poorly managed these resources and consequently, Malawi has become poor. There is no reason we should be in poverty at this stage.
“We are working to end such bureaucracy. Sometimes it takes say 40 days to process [paperwork for investors] when it can take only a few hours. I am currently talking to ministries, departments and agencies to streamline everything. We want Mitc [Malawi Investment and Trade Centre] to be a one-stop centre when it comes to all this.”
During the interview, the President highlighted a number of strategic sectors of interest by investors, including tourism, mining, agriculture, energy, manufacturing and information and communication technology.
On energy, Chakwera—who won the court-ordered Fresh Presidential Election on June 23 backed by a nine-party Tonse Alliance—said Malawi desperately needs enough power. He said time has come to diversify away from hydro-electricity to other viable alternative sources such as wind power, coal and solar energy.
He also tackled tourism and said plans were in place to upgrade lakeshore towns of Mangochi and Salima into tourist cities. He said this will need serious investment.
The President said the agriculture sector also presents vast opportunities for investors ranging from fertiliser production, mega farming value-addition and storage facilities for agriculture produce.
An analysis of the country’s investment policies by United Nations Economic Commission for Africa shows that they are dedicated to trade liberalisation, promotion and facilitation, with a few investment conditions to promote sector-specific liberalisation.
Since 2015, Malawi has been on the overdrive to attract FDI, largely through Malawi Investment Forum platforms hosted in 2015, 2016 and 2018, Malawi-China Investment Forum, Malawi-Japan Investment Forum and the UK-Africa Investment Forum.
Through Mitc, the country has also established a one-stop service centre where all crucial institutions in the investment registration process are operating under one roof.
But despite the efforts, Malawi is yet to fully utilise its FDI potential, making it one of the least attractive destinations for foreign capital with a 2019 United Nations Conference on Trade and Development (Unctad) World Investment Report 2019 ranking the country as one of the countries with lowest levels of FDI in the region.
In an earlier interview, Ben Kaluwa, professor of economics at Chancellor College—a constituent college of the University of Malawi, called for the scaling up of efforts in marketing the country’s potential investors.
He said: “There is a lot that Malawi can do with very marginal effort like in the tourism and hospitality industry as well as manufacturing.
“Other countries don’t have the resources that we have in Malawi such as mountains and the fresh water lake yet they outperform us.”
In 2019, Mitc figures showed that the country’s total FDI stock was estimated at $1.15 billion or 17 percent of gross domestic product (GDP). The data indicated that the agricultural sector attracts the most FDI, primarily from South Africa, Germany and the United States.
But Mitc earlier conceded that the country’s one-stop investment coordination centre was finding it hard to sell some of the projects listed in its compendium due to lack of proper documentation, particularly on costs.
The agency said lack of a full feasibility study on the projects worsened the situation.
Launched in October 2016, the compendium presents investment opportunities for 118 bankable projects in various sectors, including energy, mining, agriculture, manufacturing, media and communications and infrastructure development.
Invest Africa has a global footprint of more than 400 member companies, comprising multinationals, private equity firms, institutional investors, development finance institutions, professional service organisations, government bodies and entrepreneurs.