2011 tough for business—Ibam

The Indigenous Businesses Association of Malawi (Ibam) has described 2011 as a tough year for doing business in Malawi in as far as small and medium enterprises (SMEs) are concerned.

Ibam president Mike Mlombwa said this is in an interview with Business News in Blantyre on Wednesday.

Mlombwa cited the acute shortage of forex and fuel as some of the major issues that affected SME operations in the year.

“Generally speaking, the year was tough in as far as doing business is concerned. Malawi, just like many economies, faced a number of challenges,” said Mlombwa.

He, however, expressed hope that 2012 will bring new opportunities to the SMEs once the authorities address the challenges.

“We believe the authorities are putting in place all the necessary measures to ensure that the problems are solved,” said Mlombwa.

He asked the authorities to carefully ration foreign exchange in the New Year so that priority is given to indigenous businesses who, he claimed, have the welfare of Malawians at heart.

Mlombwa said most foreign-owned businesses have other ways of acquiring foreign money.

Finance Minister Ken Lipenga told Parliament late last month expressed optimism that the country’s economic nightmare will come to an end next year through employment of prudent actions.

Lipenga acknowledged, in his statement on the status of the economy, that the challenges the country is facing such as shortage of forex and erratic fuel supplies, have adversely affected the construction and production industries.

Mlombwa said, while tobacco continues to face an uncertain future mainly due to the various challenges such as the anti-smoking lobby, government needs to pump up extra energy towards revamping the tourism sector.

“Tourism has a potential to help Malawi realise more forex which could help the authorities to sort out some of the challenges the country is facing,” said Mlombwa, adding that bringing back concessional rates for indigenous hotel operators and car hire company operators would be a step in the right direction.

A latest study by the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has singled out unreliable power supply as the biggest huddle of doing business in land-locked Malawi in 2011.

The Malawi Business Climate Survey 2011, says inadequate and erratic power supply, with a score of 9.7 out of 10, is one the greatest challenges that is increasing the competitiveness of enterprises in the country.

The report said most companies have suffered from power supply failures to the extent that production capacities result in high costs.

It further says the power failures are a disincentive for companies to investment in other potential
areas.