Minister of Finance Goodall Gondwe has challenged the private sector to take a leading role in bringing positive change that would transform the sick economy.
Gondwe’s challenge follows the launch of the Malawi 2015 Business Climate Survey Report which highlights obstacles the private sector faces in doing business such as high cost of electricity and borrowing, business competitiveness, telecommunications, uncertainty in economic and regulatory policies.
The private sector should take Gondwe’s challenge seriously. After all, the private sector is considered as the engine of development. But as things are now this seems to be on paper only because the sector is not doing enough to transform the country. Companies are getting a lot of business from government, but there is little to show for it. Some of them are just good at criticising government and looking for favours.
Actually, some companies survive on government contracts and they get billions of kwacha worth of business, yet they do not use the money to transform the economy. If the government was to stop doing business with them, they would collapse. Perhaps, Gondwe’s discovery that CEOs in the private sector earn obscene salaries shows that they would rather have money in their pockets than expand their businesses for the good of the country.
There are so many areas that the private sector can play a role in to transform the country. Government compiled a compendium of projects for the private sector to take advantage of, but they have ignored it. For example, the private sector can construct modern houses or block of flats in our cities and towns to ease pressure on housing market and reduce the growth of squatters. Students in the university lack accommodation and such an investment can go along in alleviating that problem.
They cannot even come up with their own projects or support existing ones. One has in mind the Kanengo Northgate residential and industrial park that has stalled for close to 10 years for failing to attract private sector financiers.
While the obstacles highlighted in the survey are genuine, many of the problems are created by the private sector itself in attempts to make profits; government has nothing to do with them. For example, the telecommunications sector is in private sector hands. If the business community is complaining about high cost of telecommunications, they should complain to the service providers, not government. The business community has also been vocal in urging government not to manage the Malawi kwacha. Common sense tells you that a weak currency is damaging to the economy and fuels inflation and economic instability.
Equally, the interest rates are high. While the central bank determines the bank rate upon which commercial banks base their lending rates, this should not be used as a scapegoat because commercial banks have refused to reduce interest rates. So, the private sector should stop complaining and play their rightful role in the economy. n