Malawi needs to create an efficient and reliable transport system if improving the country’s global competitiveness is to be achieved, a local investment and portfolio management firm has said.
Blantyre-based Alliance Capital Limited in its weekly advisory report said infrastructure, in particular, the transport sector is crucial for the country to carry out trade effectively and efficiently as it links production facilities with points of exit for goods.
Malawi remains one of the least competitive countries in the world with a recent Global Competitive Report ranking the country on position 132 out of 137 economies.
The country’s competitiveness on the global front has stagnated over the years ranking positions 129 and 134 out of 148 and 138 economies between the years 2012 and 2015.
The poor ranking, according to the firm has kept away potential investors who use the index as one of the factors for investment decisions on account of, among others, poor infrastructure.
Alliance Capital notes that despite the crucial role of the transport sector in the country’s competitiveness, the transport infrastructure base in the country has for many years been poor with network of roads airport facilities, ports and railway being unreliable, inefficient and at the worst being not available.
“It is not surprising that the country has unusually high transport cost, with 55 percent of costs of production for firms being taken up by transportation costs. The high transport costs have been aggravated by Malawi’s land locked status,” she the firm.
The firm has since asked government to ensure that the focus should go beyond road sub sector to include rail, water and air subsector.
“In this case, government should aim at creating a robust, well integrated efficient transport system which is more likely to lower the high transport costs,” said the advisory.
A senior lecturer in the department of economics at Chancellor College Exley Silumbu is also on record saying infrastructure development is an important element for the country.
He said there are still places in the country which are not easily accessible, saying government should be looking at these areas with great focus.