Covid-19 has had a huge impact on Malawi’s tourism sector and greatly reduced remittances from Malawians working abroad this year. The World Bank estimates the country’s economy will expand at two percent this year. In this interview, first published on September 15, Malawi Investment and Trade Centre (Mitc) director of planning and research Felix Kadewere tells FDI, a specialist division from THE FINANCIAL TIMES, how Malawi is entering a new political era that could help it to attract greater foreign investment. He also talks about how the investment promotion agency plans to co-operate more closely with the country’s key embassies around the world to market Malawi better. Excerpts:
Q: How did Covid-19 impact the functioning of your investment promotion agency?
A: When the government imposed Covid-19 restriction measures, it had a very big impact on our ability to do our work. There was a drastic drop in terms of traffic and requests from investors that we received. We had to work from home and use digital technology to serve our clients. Other government departments were also closed, and people were working from home, and it became challenging to process applications and permits on behalf of investors in a timely manner. It was a big challenge because we were concerned about the safety of our staff and clients amid Covid-19’s health implications. After detailed safety measures were put in place, we are now able to return to the office, although we are operating on a roster basis, so that not everyone is in the office at the same time. We are pleased for now because we are able to maintain our services for investors.
Q: What is the status of Malawi’s borders and airports which were closed because of the Covid-19 pandemic?
A: The airports opened again early September. When the airports were closed we were certainly affected. Not only were foreign business people and potential investors not able to come into the country; officials from other countries were also not able to visit Malawi either. The prospects are that it will be some time before the traffic of businesspeople returns to previous levels. Notwithstanding, the re-opening of the airports is good news for our investment promotion.
Q: Did foreign investment flows into Malawi slow down during the Covid-19 crisis? What are your expectations for next year?
A: Investment inflows into the country had already been slowing down, even before the pandemic, due to a ‘wait-and-see’ attitude in view of the political climate in the past year. According to our sources, FDI inflows declined from $876.7 million in 2018 to $542.2 million in 2019. The presidential elections that took place in May 2019 were contested by the stakeholders. Now that fresh presidential elections took place at the end of June, and the country now has a new President, Lazarus Chakwera, this is a new era and everything is now in place for investor confidence to be restored. We, therefore, expect Malawi to stage a very strong economic recovery in terms of foreign investment next year. In line with this momentum, Mitc will be working more closely with the country’s investment and trade attaches at our embassies in key markets such as India, South Africa, the UK, China and the US. I think this co-operation will help us to market Malawi in a more impactful way.
Q: What was the set up of your priorities in terms of investment promotion and investment retention during the pandemic?
A: Since we were not able to have one-to-one meetings with new investors, we put our efforts into helping existing investors and those on the ground. We helped to ensure that any issues they had were resolved quickly. We are now used to using digital technology to communicate with potential investors and I am sure that is something we will want to build on in the future. As you know, technology provides a good means of cultivating an initial business contact but still face-to-face meetings matter as they help to cement business relationships.
Q: What are the biggest foreign investment opportunities in Malawi?
A: The energy sector offers some of the biggest opportunities. We really want to bring more independent power providers into the country. Malawi has worked hard to create the right enabling environment for this sector. We also believe there are significant opportunities in medium- and large-scale agricultural production, in plantations and estates. Industrial hemp could become an increasingly important crop for us. We have put a legal framework in place to support that sector, as well. Manufacturing and value addition opportunities are equally strategic for foreign investment in Malawi.