Malawi Confederation of Chambers of Commerce and Industry (MCCCI) president Newton Kambala has said the private sector needs policies that will empower them to contribute meaningfully to the country’s economic growth.
He said this in an interview yesterday in light of Reserve Bank of Malawi (RBM) economic review reports which have consistently shown that the central government is heavily borrowing to finance its operations in the wake of donor aid freeze.
Government’s net borrowing from RBM, despite the figure being huge, declined to K18.6 billion in the second quarter (April to June) from K50.3 billion recorded in the first quarter of 2015.
This is largely due to repayment of K37.1 billion outstanding ways and means advances that was complemented by an increase of K416.4 million in government deposits.
Kambala said the business community is keen to deal with the private sector but argued the sector is still small to provide adequate business.
He said: “The private sector in Malawi continues to face exodus as businesses are disinvesting in Malawi. This is not only because government is not providing business but it has become hard to do business in Malawi. Policies are not good and most of these policies don’t talk to each other.”
However, Kambala did not provide figures of how many companies or businesses have closed shop or have disinvested due to the current poor economic performance.
He has blamed “irresponsible borrowing” by government for consumption purposes, describing the situation unsustainable.
However, economic experts have said government has no choice but to borrow because 40 percent of recurrent expenditure, which was being provided by bilateral donors, is off the budget. n