Malawi flops on MIF economic index

Malawi has fared badly on sustainable economic opportunity category of the 2012 Ibrahim Index of African Governance (IIAG).

IIAG, sponsored by Mo Ibrahim Foundation (MIF), collects data from all African countries (except Sudan and South Sudan) to assess governance, delivery of public services and goods on the continent.

Despite scoring 56 percent on overall governance and earning itself position seven out of 12 countries in southern Africa and 17 out of 52 countries on the continent, Malawi scored 49 percent on the sustainable economic opportunity category.

The shoddy mark confirms concerns from local market analysts that Malawi is not an attractive destination for investment due to overregulation and high costs of doing businesses.

IIAG, whose results were released on Friday, assesses Africa’s governance in four categories of sustainable economic opportunity, human development, participation and human rights and safety and the rule of law.

Malawi, according to the index, scored 52 percent on human development, 60 percent on participation and human rights and 61 percent on safety and rule of law categories.

Under the economic opportunity category, IIAG assessed Malawi’s public management, business environment, infrastructure and rural sector and found all of them lacking and in need of urgent improvements.

On the index, Malawi’s public management scored 58 percent, business environment 51 percent, rural sector 54 percent and infrastructure 35 percent.

The IIAG assessment corroborates what Institute of Bankers in Malawi (IOB) executive director Lyness Nkungula said on Friday that high taxes on some equipment, poor infrastructure such as roads, poor telecommunication services, intermittent power and water supply cripple business operations in the country.

Malawi Confederation of Chambers of Commerce and Industry (MCCCI) also raised the same issues during the 2012/2013 national budget consultation meetings and asked government to create a conducive business climate in the country.

In response, government scrapped off capital gains and minimum turnover  and other taxes in the 2012/2013 budget.

On intermittent power supply, businesses are banking their hopes on resuscitation of the Millennium Corporation Challenge (MCC) which is expected to boost power supply in the country.

The index says although Africa has improved on governance since 2000, the continent is still grappling with challenges of translating its wealth into improved quality of life for its people.

“The contradictions of growth without sufficient employment or economic gains without matching rights for citizens produce imbalances that can only be resolved through more efficient, visionary leadership and responsible governance,” reads the index in part.

Minister of Trade and Industry John Bande and his principal secretary Nebert Nyirenda could not be reached for comment on Monday.

But Nyirenda was recently quoted in Business News saying Malawi is reviewing 40 business laws to enhance and align them with international standards.

“The review is to ensure that both local and foreign businesses do their businesses with on a level ground while embedding the ease of doing business and reducing costs of running businesses,” he said.