High interest rates affect tourism growth

Despite the economy showing signs of recovery, the Malawi Tourism Council (MTC) says it could have loved if interest rates were lower to help developers invest in the tourism sector.

This comes at a time many projects in the hospitality industry are failing to take off while some are being undertaken at a snail’s pace.

Projects contained in the 2016 Malawi Investments Compendium include the Malawi Institute of Tourism office complex in Lilongwe and the Chintheche Hotel.

In an interview, MTC chairperson Oswald Bwemba said high interest rates are indeed a problem affecting the growth of the sector.

“High interest rates are a challenge to the growth of the hospitality sector and we will continue to lobby other players so that they can be affordable,” he said.

Developer of Chintheche Hotel Wallie Resorts, Faisal Karim, explained in a separate interview that interest rates are a huge problem, saying he is failing to expand his hotel.

“There is no progress at the moment because in Malawi it is difficult to borrow. Long-term investments need a lot of cash and since we are using our own resources, it is tough to expand. We will continue developing the site but slowly and currently we have built two chalets and five rooms.

“We are looking at $1 million [K733 million] and if we can get sponsors so much the better. Last year, the estimated cost was $467 894 [K342 million] but costs for building materials are going up on a regular basis,” he added.

Interest rates are averaging 27 percent across all the bank in the country.