The Malawi Investment Forum (MIF) opened yesterday after a year-long absence with the promise from political and administrative leaders that the country was ready for investment in the sectors of agriculture, manufacturing, tourism and transport and infrastructure.
However, such promises come against the backdrop of the worst shortage of energy in recent years which have crippled manufacturing and resulted in loss of employment to thousands of Malawians as well as weather related shocks which have affected agricultural production.
While President Peter Mutharika acknowledged the energy deficit which has impeded private sector growth, he claimed the country did not make sufficient investments in the sector for over 50 years. Minister of Finance Goodall Gondwe downplayed it saying it was a continental wide problem which did not only affect Malawi.
Mutharika told potential investors that government planned to double the current power output from 351 megawatts (MW) to 720MW in two years towards a goal of 2 000MW within 10 years.
Energy Generation Company (Egenco) currently produces about 150MW against an installed capacity of 351 MW.
The MIF has outlined investments aligned to the MGDS III which include flagship projects to cost an estimated K5.3 trillion.
Speaking at the opening of the forum, Gondwe said after stabilising the economy through manageable interest rates and a single digit inflation, the government anticipated expenditure of $5.1 billion in the medium to long term for projects that would be resilient to factors that impede growth.
“Of the $5.1 billion, a good deal of that will be spent on the resilience of the economy. We plan to spend a lot of money, close to $2 billion on the generation of electricity to enable us to be self-sufficient on that front,” he said.
The minister said discussions with the Chinese investors are underway on the Kam’mwamba coal project, $1 billion in transport including the Shire Zambezi Waterway as well as investments in education and skills development.
In transport, the government is looking for investor interest in the expansion of Chileka International Airport, rehabilitation and expansion of the Limbe-Marka-Nkaya-Mchinji railway lines, among others.
Mutharika described Malawi as a country with untapped investment potential and his government has taken necessary steps to encourage private sector investment growth.
According to the Malawi Investment and Trade Centre (MITC), investments were required at several potential hydro-power generating plants at Mpatamanga, Fufu, Kholombizo, Chisomba, Chizuma and Lower Songwe to meet the country’s energy deficit.
The first MoU signed at the MIF yesterday was the Mbongozi hydro-electric project on Bua River worth $410 million.
Mitc executive director Clement Kumbemba said Malawi’s improved score on the World Bank Ease of Doing Business survey, from 141 in 2015 to 110 in 2018 was a sign that the country was doing better in facilitating investor growth.
Though the opening of the MIF 2018 was full of optimism, the past two forums generated a lot of interest and deals worth over $1 billion but failed to deliver.
For example, three memorandums of understanding (MoUs) were signed at the 2016 MIF with Khato Civils: for the construction of a modern bus station, the Salima-Lilongwe Water Project and toll gates.
So far, funding is yet to be identified for the water project, toll gates were deemed not feasible considering the low traffic levels and the bus depot has not taken off due to land wrangles.