Malawi Confederation of Chambers of Commerce and Industry (MCCCI) says there is need for Malawi to create more industries and shift the current monetary policy stance as one way of improving the macroeconomic environment for businesses in 2016.
The chamber, popularly known as the voice of the private sector, specifically wants government to adopt a new monetary policy that can push down lending rates, stabilise the volatile kwacha and tame inflation, to stimulate growth.
MCCCI outgoing president Newton Kambala said this when giving his president’s annual report during the chamber’s 122nd Annual General Meeting held on Friday at the Chichiri Conference Centre Hall in Blantyre.
He said Malawi needs a monetary policy that would stimulate growth which in turn will create more industries than is the current case.
The outgoing MCCCI president said new industries can help absorb labour, produce high value goods, exportable goods, and make Malawi become increasingly competitive globally.
“Without industries in Malawi, we will not move forward because we cannot reduce unemployment rate. You need to realise that the more we import from outside the more we are engaging people from outside the country.
“We need to ensure that our youth are employed in Malawi by making sure that we have thriving industries in Malawi, otherwise this economy will always keep on getting smaller if we don’t create industries,” said Kambala.
He said that for this to happen, there is need for necessary government interventions including improving the business and legal environment, security and safety of investors, cost and access to finance, and infrastructure services.
“The continued poor ranking in the Malawi Business Climate Survey and the World Economic Forum’s Global Competitiveness Survey show lack of commitment by authorities in resolving the challenges to doing business.
“I believe that the adoption of a tight monetary stance by the Reserve Bank of Malawi [RBM] especially in the last quarter of 2015 could not contain the inflationary pressures which were exacerbated by the massive depreciation of the local currency proving that a monetary policy that uses interest rates to fight inflation is not necessarily the best strategy to fight inflation.
“Inflation in Malawi is known to be caused by shortage of food and exchange rate depreciation. The confederation has been advocating for RBM change in approach by targeting food production and export sectors in order to produce more food and generate foreign exchange through export,” Kambala said.
Newly elected MCCCI president Karl Chokotho said there is need for government and the private sector to enhance their working relationship if the business environment is to be conducive.
“Government is the biggest client for the private sector, so the private sector needs government. At the same time, government needs the private sector, without the private sector, there will be no taxes and there will no growth. We need to come to a point where we are working together and reach to a point where we will create an environment for growth that will sustain everybody,” he said.