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MW FDI down 16%—report

Foreign direct investment (FDI) into the country has been declining in the past four years, falling by 16 percent between 2013 and 2016, a recent United Nations Economic Commission for Africa (Uneca) report indicates.

The report released on Saturday in Dakar, Senegal, shows that since 2013, the net financial account balance of the country has been declining steadily as a result of the fragile global economy, policy uncertainty for investors and elevated geopolitical risks.

The report which is part of country profiles for 2016 shows that Malawi’s financial account balance fell from a net of $918.6 million (about K671 billion) to a net of $828.3 million (K605 billion) in 2014 and further to a net of $570.0 million (about K416 billion) in 2015.

The account balance is expected to have been a net of $493.1 million (about K360 billion) as of 2016.
The report indicates that despite registering the decline, Malawi’s investment policies have been principally dedicated to trade liberalisation, promotion and facilitation with a few investment conditions so as to reduce restrictions and promote sector-specific liberalisation.

For instance, in the past two years, Malawi has been on the overdrive to attract FDIs largely through Malawi Investment Forum (MIF) 2015 and 2016 organised by the Malawi Investment and Trade Centre (Mitc) as well as the first ever Malawi-China Investment Forum.

Through Mitc, Malawi has also established a one stop service centre where all crucial institutions in the investment registration process are operating under one roof.
Speaking earlier with Business News, Mitc public relations officer Deliby Chimbalu was upbeat that the reforms will reinforce the attractiveness of Malawi as an investment destination to foreign companies as well as local companies.

She said: “The establishment of the one stop centre has made a substantial contribution to levels of companies being registered for various investment projects. The Mitc has also reduced the period taken for applications for investment certificates to five days from the previous one month.”

Minister of Industry, Trade and Tourism Joseph Mwanamvekha is on record saying government is keen to improve the ease of doing business in Malawi.
He said government initiatives such as the Malawi Trade Portal, Online Business Registry and the passing of insolvency and company laws have and will continue aid the ease of doing business in Malawi.

In Malawi, most of FDI has been directed to the energy sector followed by the manufacturing and mining sectors.
During last year’s investment forum, government signed 13 memoranda of understanding (MoUs) with investors, many in energy and the rest in water, transport and agricultural sectors.
Over the past five years, the leading sources of FDI have been from Australia, China, India, the Republic of Korea, South Africa, the United Arab Emirates, the United Kingdom, Northern Ireland and South Africa. 

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