Investing in productive ventures is one of the solutions to end the current economic woes, CDH Investment Bank chief executive officer Misheck Esau has said.
Esau, who is former Bankers Association of Malawi (BAM) chairperson, has also asked the private sector to stop whining, but ensure that they spend their hard-earned resources on production not consumption.
In an interview on Wednesday, Esau while admitting that there are bottlenecks at the macroeconomic level that may suffocate private sector growth said the situation should push the private sector to ‘think outside the box’.
He said instead of heaping blame on the economic environment, the private sector can take the country ‘out of the woods’ by doing business differently.
Said Esau: “There is a lot of complaining about the economy, but not much action has been taken. While this complaining can be understood because when people are not sure about what is going, they pull back on investment decisions, I believe people still need to find opportunities within those challenges to invest.”
He called on private sector particularly those with resources to invest within the country to move the country from a predominantly importing to an exporting nation, ultimately mitigating the risks faced in importing business.
“Our economy is not producing enough. What we need to see is people putting their resources in factories. I know there are challenges with the high interest rates, but if the rates continue to go down then this should start to show which areas can drive the economy,” he explained.
The past year has been a bad year for the economy with an economic growth rate of 2.8 percent.
Even Finance, Economic Planning and Development Minister Goodall Gondwe failed to achieve projected 5.1 percent growth rate as envisaged at the beginning of 2016.
The year saw both citizens and government suffering as the cost of living soared on the back of falling real incomes amid persistently high inflation rates.
Local investment firm Alliance Capital Limited recently also said Malawi needs a long-term strategy to increase local manufacturing.
The investment managers in its Weekly Market Update said this week an increase in exports is, certainly, one reliable way to escape the persistent forex shortages which have rocked the country for years.
“There has to be determination to ensure that capacity to export becomes our reality. Monetary policy alone will not be enough to ensure stability of the kwacha and the economy because with poor in-flows, the only policy option for the central bank may end up being incessant tightening of money, leading to stagnation; hence, need to invest in production,” reads in part the weekly report.
The World Bank, however, remains upbeat that the Malawi economy will bounce back this year on the back of concentrated efforts on macroeconomic management and fiscal consolidation with meeting humanitarian needs.
According to the bank’s vice-president for Africa region, Makhtar Diop, who visited Malawi on January 24 , the country must speed up the process of agriculture diversification to avoid overdependence on tobacco for foreign exchange which has proved to be less reliable. n