Malawi remains among 47 countries designated by the United Nations (UN) as Least Developed Countries (LDCs), a latest United Nations Conference on Trade and Development (Unctad) report shows.
The report, published on Unctad website www.untcad.org on Tuesday observed that Malawi, alongside other 46 LDCs must develop the small and medium enterprises (SMEs) to meet the goals of the 2030 Agenda for Sustainable Development if it is to foster efforts on ending poverty.
In reaction to the analysis, Small and Medium Enterprises Association (Smea) president James Chiutsi said on Tuesday there is need to develop strategies that maximise the efficiency of SMEs as well as cooperatives and other business groups to balance the policy environment which is biased towards larger firms.
“We need bigger firms to create business linkages with SMEs and we need to link SMEs with the international environment so that they can access skills and ultimately markets,” he said.
The Unctad report says many people in LDCs are forced into small-scale, low-value entrepreneurship by necessity with small companies accounting for 58 percent of all firms in these countries.
The report also said that governments in LDCs should, therefore, focus on boosting entrepreneurs and establish firms that seize opportunities to create innovative products and services, employ more people and grow dynamic businesses that have a transformative, ripple effect throughout the economy.
Speaking during the signing ceremony of a partnership between FDH Bank and African Guarantee Fund (AGF) to SMEs in Lilongwe earlier this month, Minister of Finance, Economic Planning and Development Goodall Gondwe admitted that the SMEs sector is one of the key areas in the economy, but the environment has not been conducive because of high interest rate environment.
He hopes Malawi could get out of the list of the LCDs by 2020 on account of continued economic growth due to reduced interest rates and reliable electricity.
Said Gondwe: “It pains me each time I see a report from outside the country that Malawi is the poorest country in Africa. We are determined that this should stop. Therefore, the way to do it is to stand up and work hard and ensure that our economic growth is much higher than it was before.”
Economists have long argued that the current socio-political environment is one of the contributing factors to slow progress the country is making to graduate into a middle income economy.