Minister of Finance, Economic Planning and Development Goodall Gondwe has challenged the private sector to take a leading role in bringing positive change that would transform the country’s ailing economy.
Gondwe, who on Tuesday graced the launch of Malawi Business Climate Survey Report 2015, a flagship publication of Malawi Confederation of Chambers of Commerce and Industry (MCCCI), in Blantyre said while government acknowledges financial gaps, the private sector should take an aggressive approach towards economic transformation.
“We all know that our economy is currently destablised. If we are to get out of this situation, it will all depend on how, as a country, we react.
“We need a vibrant private sector, which can turn things around bearing in mind that if we let all this in the hands of the government, it will not work as people in government come and go unlike in the private sector,” Gondwe said.
The finance minister’s comments follow Malawi Business Climate Survey Report 2015 findings which warn businesses to brace for tough times ahead on account of weaker and inconsistent implementation of policy interventions that affect the private sector due to financial gaps in the 2015/16 National Budget.
Reads the report in part: “Out of all interventions put forward by authorities, restructuring of the economy is not taking shape which signifies that unless own resources are directed at what are termed priorities for the economy, economic transformation will be far-reached.”
The report, while pointing out a number of obstacles in doing business across the sectors, ranging from business competitiveness to regulatory policy and operating environment, notes that the challenges affecting businesses have remained the same over the years competing on the ratings.
The MCCCI report also says the cost of doing business, electricity, telecommunications, uncertainty in economic and regulatory policies, and crime are the major obstacles to doing business in the country.
“Over the years, the cost of finance has remained one of the top three obstacles and it has been rated the second most challenging factor to doing business in 2012 and third in 2013 and 2014 respectively.
“Lending rates in Malawi have remained extremely high since 2012 despite being cited as a major investment impediment over the years,” reads the report.
The report has also bemoaned the cost of telecommunications in the country, which it says “is becoming a serious problem to the businesses in their everyday operations. This is in respect of it being one of the major drivers of business sector growth in the economy.”
According to the report, uncertainty in economic regulatory policies is an obstacle as this may result into a crippled and inefficient business sector.
But Gondwe assured captains of industry that government is going to implementing the budget more efficiently.
On his part, MCCCI president Newton Kambala emphasised the need for government to introduce favourable policies that could promote growth.
Malawi business environment has worsened over the years. Recently, Malawi registered an improvement on the World Bank Doing Business Report (2016) by jumping three steps to 141 from last year’s 144 despite slipping three steps on the World Economic Forum Global Competitiveness Index to 135 out of 145 economies. n