Malawi, characterised by underde-velopment and economic instability, is one of the riskiest investment destinations in the region according to the Euromoney country risk global snapshot survey created recently.
Euromoney country risk which is derived from a forum of over 400 international economists and analyses over 185 economies has grouped Malawi in tier five—the worst among five categories of risk categories.
However in the region, according to the report released recently shows that Malawi’s neigbours—Mozambique, Zambia, and Tanzania—are better investment destinations in tier four along with Kenya, Angola and Namibia. Botswana and South Africa are the best in the region in tier three.
Euromoney describes tier five economies as often economically unstable and underdeveloped, and that their major indicators of economic health show persistent negative characteristics.
The global investment and business survey notes that tier five countries also have a political system which is usually unstable, its workings can be difficult to understand and changes in the administrative government will often cause significant changes in the nature of political governance.
Recently, the Malawi Investment and Trade Centre (Mitc) indicated that in 2013 Malawi investment levels dropped by 19 percent to $965 million (K434 billion). The data compiled by the centre also indicated that Malawi earned foreign direct investment (FDI) inflows worth $1.2 billion (K540 billion).
Mitc, however, indicated that the total investment level in 2013 created over 36 thousand jobs, nine times more than jobs created in 2012, estimated around five thousand.
Mitc public relations manager Deliby Nyale was recently quoted by Business News having said that the increase in investment levels was due to the fact that the investment centre has developed a focused promotional strategy based on employment, forex generation and import substitution.
She was further quoted having admitted that in the past there were significant interests from investors but the investment environment was not yet ready such that many relocated to neighbouring countries such as Zambia and Mozambique which offered better terms, less bureaucracy and had more operating marketing space.
But recent reports indicate that Malawi continues to tumble on ease of doing business and global competitiveness.
Malawi tumbled 10 steps to 171 out of 189 economies on the 2014 World Bank Doing Business Report.
And in 2013 Malawi crashed seven steps to 144 out of 148 economies on the World Economic Forum (WEF) Global Competitiveness Index with foreign currency regulations, access to financing, tax rates,
corruption, and theft and crime as problematic indicators.