The European Union (EU) has warned Malawi against complacency with its 23 steps improvement on the 2018 World Bank doing business index.
In the report released last week, the World Bank Group ranked Malawi the third topmost reformer in Africa and 10th in the world on the ease of doing business index, moving 23 steps up the ladder to 110 from 133 last year out of 190 economies.
But in an interview on Tuesday, EU Ambassador Marchel Gerrmann said despite the country being one of the fastest reformers in the year, there is a lot that needs to be done to woo investors.
He urged government not to be complacent, saying a number of areas relating to stability of markets and electricity need to be addressed.
“I would like to commend government on the recent improvement of business climate as evidenced by the significant rise in the World Bank’s doing business ranking report. Of course this is no reason for complacency,” he said.
Gerrmann said Malawi markets should be predictable and there is need to reduce uncertainty for investors, hoping that the upcoming review of Control of Goods Act will help meet expectations of the private sector.
He said it is clear that growth and jobs can only be a result of private sector investment.
Gerrmann said if companies are to invest in agricultural sector, there is need to limit export restrictions and government has to be clear on when it will put export restrictions in place.
He hoped that more private sector investments in the agricultural sector will be made if Malawi improves on the functions of its markets.
Gerrmann commended government for lifting the maize export ban, saying if investors want to invest in Malawi, they will have to be sure that they will export their produce.
Among the reforms that earned Malawi the feat include the enforcement of the Credit Reference Bureau Amendment Act, which made it mandatory for financial institutions to provide information to the bureaus for consumer and commercial loans, the enactment of the Insolvency Act of 2016 which established priority rules inside and outside bankruptcy procedures and the reforms in dealing with construction permits.
Gerrmann said there is also need to improve on electricity, noting that power cuts have the potential to affect operations of companies in the country.
He said with power outages, companies need generators to sustain operations but some cannot afford that.
The EU plans to invest 20 million euros (K17 billion) in the interconnector between Malawi and Mozambique.
Ministry of Industry, Trade and Tourism spokesperson Wiskes Mkombezi said theyare reviewing Control of Goods Act and almost all stakeholders have been engaged to help address challenges.
He said fears of uncertainties in the market will be taken care of once the reviewed law in enacted. n