The business challenge
Malawi has been categorised as a partial performer on logistics according to Ernst and Young’s Africa Attractiveness Survey 2013.
The report released on May 6, indicates that on logistics Malawi is ranked better than all African countries except South Africa, Tunisia, Morocco, Egypt, Benin, Botswana, and Mauritius.
The logistics performance indicator scores across six components: customs, infrastructure, ease of arranging shipments, quality of logistics and services, tracking and tracing, and timeliness.
Ernst and Young in the report, says for the majority of African countries, infrastructure is clearly lagging and adds that lagging further behind are border management, clearance, and the competence and quality of logistics services.
“There is no silver bullet for solving the transport and logistics challenge in Africa. While investment in hard infrastructure is obviously critical, it will not, in and of itself be sufficient. Countries that have made substantial performance improvements are the ones that have implemented long-term and comprehensive reforms and investments across the transport and logistics supply chain,” reads the report in part.
And commenting on the report in an e-mail on Thursday, Ernst and Young leader for Malawi, Shiraz Yusuf, said quality of logistics can have a major bearing on a particular country’s investment and trade.
“Malawi’s main problems are poor railway infrastructure to the sea and limited air routes out of the country, and particularly lack of frequent flights in Blantyre. The country also suffers port and customs delays, numerous regulations, import and export procedures and limited use of information technologies by many small companies. Investment, world trade and commerce depend on reliable and efficient infrastructure, freight transport services and distribution channels. Other important factors that affect foreign direct investment in Malawi include, ease of doing business, fiscal incentives and skill of labour force,” he said.
He added that there is evidence of the country’s recent improvement in becoming one of Africa’s investment destinations especially in mining, agriculture and tourism. He added that, however, Malawi needs to take advantage and harness the optimism by being competitive against our neighbours in terms of the incentives to foreign investors.
The report divides African economies into five parts, quintiles. In the top quintile described as logistics friendly, has only South Africa ranked at 23 out of 155 economies in the world. Tunisia ranks 41 and Morocco is at 50, in the second quintile, the consistent performers.
The third and fourth quintile for partial performers in which Malawi belongs, also includes Botswana, Mauritius, Madagascar, Tanzania Namibia, Zimbabwe, Ghana, Senegal, Nigeria and Kenya.
In the bottom quintile, the logistics unfriendly, there are notably Libya Angola, Rwanda, Ethiopia, Lesotho, and Sudan
However in the 2013 World Bank Doing Business report, a survey that analyses regulations that apply to an economy’s business life cycle, Malawi slumped six steps to 157 out of 185 economies.
In the region South Africa topped the ranking at 39, Rwanda on 52, Botswana on 59, Zambia on 94 and Mozambique on 147.
Below Malawi were Angola on 172, Zimbabwe on 173, Democratic Republic of Congo 181 and Republic of Congo at 183.
