Investment forum shouldn’t be a talking shop

Talking shop (noun): A place or group regarded as a centre of unproductive talk rather than action. Talking shop, according to www.merriam-webster.com (touted as ‘America’s most trusted online dictionary’), also refers to a place where people talk about doing things but do not actually achieve anything.

For the third time in four years, this week the Malawi Government through the Malawi Investment and Trade Centre (Mitc) and the Ministry of Industry, Trade and Tourism held the Malawi Investment Forum (MIF) in Lilongwe.

Through the forum, Malawi courts potential foreign direct investment (FDI) to invest in the various sectors of the economy either by way of partnerships, joint ventures or single-handedly.

For example, in 2016, Mitc presented an investment compendium comprising 118 bankable projects in various sectors, including energy, mining, agriculture, manufacturing, media and communications and infrastructure development. In 2015, on the other hand, the compendium had about 76 projects.

During the 2016 MIF, seven companies signed memorandums of understanding (MoUs) while the one held in 2015 yielded deals and MoUs estimated at $1 billion.

To date, out of the 193 projects listed in the Malawi Investment Compendium 2015 and 2016, only about 15 projects took off. They include a sugar factory, upgrading of Malawi Council for the Handicapped (Macoha) factory, eco-tourism venture by Sunbird Tourism Limited in Chikwawa, hostel construction in public universities, Kam’mwamba Coal-fired Electricity Plant, Kanyika Niobium Project, two hotels in Blantyre and Beta Television which has since folded.

For this year’s MIF, Mitc chief executive officer Clemet Kumbemba told The Nation’s Business News that the centre would package about 20 projects “with better information than what we had”. He said Mitc was working with project promoters for those “20 good projects”. The 20 include six projects on energy and others focusing on infrastructure, tourism and agro-processing.

Malawi, according to the 2017 Malawi Economic Report, remains one of the countries with the lowest levels of meaningful direct foreign investment.

High cost of transport, the perennial problem of unreliable power and water supply, corruption, high import duties and unpredictability in prices have always stood out as disincentives for investors to put their money in this country.

During the opening of this year’s forum, Africa Business Group CEO Michael Sudarkasa said investment in power generation and supply is critical if Malawi is to woo serious investors.

What is key, if the MIF series is to accrue tangible benefits to the country, is for the Malawi Government to engage in more action than talk in the highlighted areas.

Poor or low financial investment in the energy sector by African governments, including Malawi, contributes to the unreliable energy supply. It is also a fact that corruption and under-pricing of electricity further worsen the situation.

I have always felt that Malawi finds itself in the present predicament because of lack of meaningful investment in the energy sector in the post-single party era from 1994. Most of the hydro-electric plants were built between the 1960s and early 2000s.

Access to electricity is one of the key drivers of economic growth and poverty reduction.

Sub-Saharan Africa, where Malawi lies, has the world’s lowest access to electricity at an average of 22 percent of the population compared to Latin America with 80 percent and South Asia at 60 percent access. For the record, with 9.8 percent access rate, Malawi is at the low end in the sub-Saharan Africa region.

Malawians have had enough of unreliable power supply in recent years, a development that has also negatively impacted on the business climate.

Living in denial, such as denying prevalence of corruption when local and international watchdogs state otherwise, will not help matters. If anything, such inaction or denial will only succeed to make the MIF one of the many talking shops where beautiful presentations and speeches are made but without translating on the ground.

Malawi seriously needs more FDI, meaningful FDIs for that matter. Not mere trading by some ‘illegal’ foreign nationals who masquerade as investors.