The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has urged government to create a conducive environment for businesses to thrive.
In its January 2017 Business Perspective issue, the private sector lobby group says it is high time government acted to save the few remaining industries against aggressive foreign competition.
The local market is flooded with imported goods at a time the local industry is faced with increasing production costs due to rising inflation, depreciation of the local currency, high lending rates and erratic water and electricity supply.
However, MCCCI says that while it is struggling to create jobs, government needs to play a developmental role by creating an environment that recognises that infant industries need time to mature, just like industries in developed economies were given time to become what they are today.
Reads the report in part: “When one enters a shop these days, one is welcomed by shelves filled with a sea of imported goods paid for by foreign exchange from donors. However, with the waning of donor assistance, imports will not be propped up forever. Malawi thus needs to stand on its own feet.”
The chamber says that the real sector continues to be affected by a myriad of factors, including high and prohibitive cost of accessing finance from the financial sector, which mirrors the sluggish pace of economic development, especially as there are no attractive alternative financing mechanisms.
MCCCI has also delved into the performance of the capital market, saying that listing on the Malawi Stock Exchange (MSE) has not been desirable by most businesses because of several factors.
“Corporate governance practice is key to listing on the stock market and in Malawi there are many family businesses which have their own way of management and would not want to change.
“Secondly, investors would not invest in a market which they do not understand, which has caused many potential investors to shy away from investing on the stock market,” says MCCCI.
In an earlier interview, MSE chief executive officer John Kamanga said that much as the stock market has picked up from the financial crisis, the fear of unknown among investors is still there.
“We are not resting, but still courting potential investors to address their needs so that they can come and invest in the market,” he said.
Minister of Industry, Trade and Tourism Joseph Mwanamvekha said government has put in place polices, including the Buy Malawi Strategy, Trade Policy and the National Export Strategy to improve trade performance.
“This is why we launched the industrialisation policy as a guide on how we can improve on value addition because industrialisation means more employment, manufacturing and also import substitution.
“Where import substitution means that we should be manufacturing goods that were initially manufactured outside, by doing so, it means we will be reducing the amount of foreign exchange we use for exporting,” he said. n