Business captians, financiers and farmer organisations have agreed that Malawi’s biggest obstacle to economic transformation is not a shortage of opportunities, but persistent policy, infrastructure and market constraints that continue to undermine competitiveness.
The stakeholders made the consensus on Wednesday in Lilongwe during a panel discussion held on the sidelines of the launch of the World Bank Group’s Country Private Sector Diagnostic and the Public-Private Dialogue Forum (PPDF).
The diagnosis identified commercial mining, nature-based tourism and mango production as sectors capable of attracting more than $2.4 billion (about K4.2 trillion) in private investment, creating about 100 000 jobs and boosting exports if key reforms are implemented.
However, the participants argued that Malawi has struggled to commercialise similar opportunities because of long-standing structural bottlenecks.
Malawi Confederation of Chambers of Commerce and Industry president Ronald Ngwira said rising production costs, foreign exchange shortages, expensive financing and unreliable energy supply were making local businesses increasingly uncompetitive.
He said production costs have been rising by about 42 percent annually in recent years while businesses continue to grapple with limited access to foreign exchange and high borrowing costs.
Ngwira, who is also Illovo Sugar (Malawi) plc managing director, said reforms in licensing, trade facilitation and export systems could unlock significant investment and export opportunities.
“A lot of businesses are in a shaky mode,” he said.
Standard Bank Malawi plc head of strategy enhancement Graham Chipande said Malawi already has examples of sectors where coordinated public and private sector action can delivered results.
He cited investments in the energy sector and structured export-oriented agricultural value chains as evidence that Malawi can attract capital when projects are well coordinated.
Chipande said Malawi’s challenge was no longer identifying opportunities, but implementing solutions.
“It’s how we get those things done that becomes a little bit of a difference,” he said.
National Smallholder Farmers Association of Malawi chief executive officer Betty Chinyamunyamu said smallholder farmers were often wrongly viewed as incapable of participating in export markets.
She said tobacco demonstrated that smallholders can compete internationally when supported by strong institutions, financing, structured markets and reliable buyers.
Chinyamunyamu argued that many export sectors suffer from a “coordination failure” where finance, logistics, markets, standards and support systems fail to develop together.
She said: “The [commercial] banks are expecting the farmer to first have a market before they can finance them.
“The farmers are producing before they can have a guaranteed market. The buyers are waiting for volume and quality,” she said.
Responding to the concerns Ministry of Industrialisation, Business, Trade and Tourism Principal Secretary Wiskes Nkombezi said the newly established PPDF will focus on implementation, accountability and results.
He said technical working groups will bring together regulators, government agencies and private sector players to identify and resolve specific investment bottlenecks.
Nkombezi said the forum would be judged by its ability to deliver reforms rather than produce reports.
