The Malawi Investment and Trade Centre (Mitc) is looking for additional K290 million funding in the 2021/22 National Budget to fulfil its mandate.
Mitc had proposed K1.6 billion for this financial year but Treasury allocated it K1.3 billion as a budget ceiling, representing 17 percent funding slash.
In its presentation to budget cluster Committee of Industry, Trade and Tourism and Media, Information and Communications, Mitc director of finance and administration MakwembaMalonje said the funds will facilitate the fulfilment of their mandate.
Among other things, he said Mitc intends to use the K290 million for setting up of Special Economic Zones (SEZ)to manage its implementation, and to set up the estate management section to lead in the Industrial Park agenda.
Said Malonje: “Government’s initiative to the SEZs and industrial park agenda will go a long way in enabling Mitc to fulfil its mandate of investment facilitation.
“We are cognisant of the many pressure on the fiscal resource envelope, however we make a humble request for an additional K290 million.”
Government has committed to implement the SEZs projects by starting preparatory works for full implementation next financial year, a move that experts feel will facilitate and accelerate trade for economic growth.
In the 2021/22 fiscal plan, Treasury has allocated K2 billion for the development of SEZs.
The zones will be established at Matindi and Chigumula in Blantyre, Area 55 in Lilongwe, and Katoto in Mzuzu.
So far government has paid for the land in Chigumula and is working with the Export Development Fund to mobilise resources for compensation payments to affected citizens around the areas.
Minister of Finance Felix Mlusu said in a statement that the Special Economic Zones Bill to facilitate smooth implementation has been developed and is with the Ministry of Justice.
If well implemented, SEZs attract investors, empower businesses, create jobs and spur economic development.
Chamber fort Small and Medium Enterprises Association executive secretary James Chiutsi earlier said SEZ is an opportunity for the country’s businesses to grow as this would increase their exports.
He said expectations are high that Mitc, along with associated government departments, will replicate the same in all areas nationwide to spur economic activity.
“This initiative reminds us to pull up our socks to boost exports. This will certainly help the SME sector to grow,” said Chiutsi.
He said the association believes that symbiotic relationships and linkages will develop the country’s small businesses.
Elsewhere in the world, China, Zambia, Botswana and Rwanda have working SEZ which have simplified the entry of investors.
SEZs—designated areas within a country with special economic regulations—could help foreign direct investors to set up companies with minimal challenges, according to Malawi Investment and Trade Centre (Mitc).
SEZs are aimed at increasing trade, investment, job creation and effective administration and within the zones, financial policies are introduced regarding investing, taxation, trading, quotas, customs and labour regulations.
Special Economic Zones can be broadly defined as demarcated geographical areas contained within a country’s national boundaries where the rules of business are different from those that prevail in the national territory.
These differential rules principally deal with investment conditions, international trade and customs, taxation, and the regulatory environment; whereby the zone is given a business environment that is intended to be more liberal from a policy perspective and more effective from an administrative perspective than that of the national territory.
Malawi is establishing SEZs to fast-track industrialisation which would lead to sustainable economic growth and development.
So far, Mitc intends to develop several areas into SEZs and these include; the Agro-processing Special Economic Zone (AP-SEZ), proposed along Zalewa, an Industrial Park at Chigumula, Blantyre where 27.3 hectares of land was set aside for the purpose, an industrial park in Lilongwe and another at Chintheche, NkhataBay.