Stakeholders in the construction sector have identified weak long-term financing structure, high banking risk and lending constraints, poor planning as well as untapped institutional and market opportunities as main bottlenecks affecting public projects in the country.
This is contained in a brief report from the Construction Sector Joint Consultative Group (CSJCG) held in Salima recently convened by the Construction Industry Regulatory Authority (Cira), aimed at facilitate discussions, share updates, and implement joint solutions
The report notes that there is no viable mortgage system, no patient capital and unpredictable foreign financing due to currency devaluation, which is affecting financing for the sector.
It reads: “Banks require proven cash flows, reject land as collateral, charge high interest rates, and lack construction-sector expertise. Reserve Bank of Malawi 10 percent pension fund infrastructure directive and stock market parallel listing present financing opportunities.
“Data and forecasting systems are inadequate. Limited consistent data on water levels, siltation, erosion, and changing river courses weakens planning and early warning systems.
It said while feasibility studies, Environmental Impact Assessments (EIAs), and Environmental and Social Management Plan (ESMPs) are conducted, recommendations and monitoring are often poorly implemented.
The group also called for establishment of a Development Bank, a Cira-backed financing facility using retention funds, and adoption of the World Bank-supported Fines model.
It also called for ring-fencing repayment mechanisms, improving transparency, Public Private Partnerships (PPP) regulatory reforms, decentralisation, and digitised due diligence processes.
It has since suggested expanding PPPs with clear risk sharing frameworks, strengthening feasibility studies and project appraisal systems to attract financiers and leveraging climate and resilience financing for infrastructure upgrades.
In his keynote address, Minister of Transport and Public Works Jappie Mhango challenged the sector to build infrastructure that serves future generations and withstands emerging pressures such as climate change and population growth.
Chairperson of the Construction Sector Transparency Initiative Malawi, Engineer Samuel Biton said earlier that persistent delays and cost escalations are symptoms of systemic weaknesses in public infrastructure delivery.
The CSJCG was held under the theme ‘Quality, resilient and sustainable infrastructure: A shared responsibility’.
