Malawi Investment Trade Centre (Mitc) has admitted pressure on investments into the country owing to the Russia and Ukraine war, a development which has compelled the agency to venture into various interventions to ensure growth in investments is sustained.
Presently, figures compiled by the United Nations Conference on Trade and Development (Unctad) show that though Foreign Direct Investment picked in 2021 reaching $1.6 trillion, there was fragile growth of real productive investment which is likely to persist this year especially in developing countries like Malawi.
The 2022 World Investment Report, released last week, shows that Malawi recorded $50 million in investment inflows slightly higher than $45 million recorded in 2020. It says the fall out of the war in Ukraine along with the Covid-19 pandemic are threatening investments in developing countries.
But Mitc public relations manager Deliby Chimbalu said in a written response to an emailed questionnaire the Mitc is optimistic that it will attract productive investments in the country.
Said said: “The Ukraine war has definitely had a trickle-down effect in most essential areas in the economy, which apparently has been felt by most private sector entities that happen to be the main drivers for investments in Malawi.
“However, through various interventions that have purposely been developed to facilitate a good and positive investment climate we are hopeful of sustained investments into the country.”
Chimbalu added that there is great coordination between stakeholders through the Presidential Delivery Units (PDUs) which will ensure streamlining of processes that will give comfort to foreign investors.
In addition, she said, Mitc, through collaboration with other development partners will also endeavour to support and promote local investors through various interventions to ensure growth in investments is sustained.
Meanwhile, according to Mitc, the country registered $808 million (about K666 billion) in investment pledges between July 2021 and March 2022.
The investment pledges show a jump from $738.4 million (about K608 billion).
But according to the World Investment Report at $50 million Malawi attracted less than one percent of the $1.6 trillion globally.
The report indicates that Malawi lagged behind its neighboring Mozambique which attracted $5.1 billion, Zimbabwe at $166 million and South Africa $40.8 billion but trailed Zambia whose FDI inflows were negative at -$457 million.
Economic statistician Alick Nyasulu also observed that issues of investments will always hinge on a favourable climate such as a viable financial sector with limited controls, non-discretionary tax policies, the ease to repatriate profits, cost and reliability of utilities, an efficient legal system and government bureaucracy, among others.