Private sector crucial in Malawi’s economic growth—World Bank
M
alawi needs a vibrant private sector to help create jobs and recover from the Covid-19 pandemic by reforming and attracting investment in key sectors, the World Bank and the International Finance Corporation (IFC) have said.
In its Country Private Sector Diagnostic (CPSD), bank notes that the energy, the digital infrastructure and services, transport and logistics, and agribusiness sectors present opportunity for growth.
Said World Bank country manager Hugh Riddell in a statement accompanying the report: “We see significant private investment potential in Malawi to boost economic growth and are ready to work with our partners to seize these opportunities and create new markets.”
On her part, IFC country manager Amena Arif also noted that Malawi is on a growth trajectory and investment in the four key sectors outlined in the CPSD will empower women and young people who are entrepreneurs.
She said: “Supporting these entrepreneurs, by expanding digital connectivity and increasing digital literacy, could positively impact the economy.”
In terms of energy, the report notes that the sector is one of the most important areas where reforms of State-owned enterprises could create more viable opportunities for private sector participation.
The bank said while higher tariffs will increase costs for the private sector in the near-term, the increases are necessary to allow for cost recovery and create commercially viable investment opportunities that will expand access to electricity.
On transport and logistics, the bank notes that investment in the sector will be essential to reduce the cost of trade and boost the competitiveness of the country’s private sector.
On agribusiness, the bank says government needs to scale investment in diversification of crops by amplifying demonstration effects while strengthening legal frameworks for contract farming that protect both the buyer and seller.
The report also notes that Covid-19 has highlighted the importance of digital connectivity, saying expanding digital inclusion could help more Malawians earn an income and develop skills for the growing digital economy both during and afterthe pandemic.
In the 2021/22 National Budget Statement, Minister of Finance Felix Mlusu said government is working with the private sector in various ways to, among others, increase the country’s energy generation capacity by about 1 000 megawatts during the next four years.
He said the focus is also on diversifying the energy sources to include solar, wind hydro, thermo and geo-thermo.
