Malawi received $656 million (about K288.6 billion) foreign direct investment (FDI) pledges in the last financial year with the largest interests being in energy and agriculture, raising hopes that the actual investments this year would rise.
According to the 2014 annual economic report, the Malawi Investment and Trade Centre (MITC) registered the pledges mainly from Asia at 52 percent of the total value, followed by local investors at 42 percent while business interests from Africa stood at only six percent of the total.
In terms of sectors in the last financial year, energy accounted for 46 percent, agriculture 21 percent while tourism took up 19 percent of the pledges.
The government has also indicated that a total of 26 projects were approved with seven in agriculture, five in manufacturing and four in energy.
On year on year basis, the government has, however, not indicated the levels of FDI that the country received in the previous year.
However, according to the United Nations Conference on Trade and Development (Unctad) Malawi underperformed in the attraction of (FDI) in 2013 having lured about $118 million, approximately 10 percent lower than the previous year’s level of $129 million.
Analysts have so far blamed low levels of FDI on the country’s poor business environment while President Peter Mutharika during his first State of the Nation Address noted that the business environment in Malawi has, in recent years deteriorated due to some macroeconomic, security and structural challenges.
Malawi among others experiences the worst inflation and interest rates in the region while the kwacha is volatile due to a weak export base.
But government has also acknowledged, in the economic report, that investment promotion in the country experiences a number of challenges including delays in getting permits from Department of Immigration, and delays in land allocation to put up the investment projects by Ministry of Lands, Housing and Urban Development.
But Speaking in Parliament in September this year, Minister of Industry and Trade Joseph Mwananvekha said the country’s one-stop-shop which is expected to improve doing business is operational and housed at the MITC.
The trade minister said this will greatly reduce the cost of opening and doing business in the country.
MITC public relations manager Deliby Chimbalu speaking in an interview earlier said the one-stop-shop will include officers from the Malawi Revenue Authority (MRA), Registrar General, the Department of Immigration and Home Affairs.
She said some officers had already reported for the one-stop-shop but did not indicate who is yet to report for the shop.