Cashgate to frustrate foreign investors—US
The US government’s Overseas Private Investment Corporation (Opic) president and chief executive officer, Elizabeth Littlefield, said the looting of funds at Capital Hills will make it difficult for Malawi to attract foreign investors in the short term.
Littlefield, who was appointed by President Barack Obama on her position which is an undersecretary level, also said for Malawi to attract more private investment, government has make the environment much friendlier for business.
“The combination of less-inviting investment climate plus cashgate scandal is going to make investors choose other countries around but if [cashgate is] handled positively, it may be a positive thing in the long run,” she said in Lilongwe last week during her two-day visit.
Opic operates in 102 countries and manages an $18 billion portfolio of financing and insurance to support private investment.
Littlefield’s thinking resonates with many local economic commentators who have previously warned that in the aftermath of the revelations of theft at Capital Hill dubbed cashgate last year, Malawi is risking being perceived by the international community as a country without proper systems, a development that could deter the inflow of foreign direct investment (FDI).
FDI inflow is critical to creating both direct and indirect jobs and, in turn, contributes substantially to Malawi’s gross domestic product (GDP)—-a market value of all financial goods and services produced in a year—currently estimated at K1.8 trillion.
“Investors have a lot of choices these days, and they will invest their capital where countries make the greatest effort to welcome them, with transparent and predictable policies, speedy and smooth authorisations and a can-do attitude to addressing their needs,” said Littlefield.
She also said that investors need responsible, results-oriented partners in all the ministries and government agencies to get timely decisions and answers, adding that investors all over the world require predictable, quick and transparent processes to obtain permits, licenses and titles.
Commenting on Opic investments on the Africa continent, Littlefield said the organisation invests $1 billion on the continent each year through investment finance, political risks insurance and investment funds.
She said Opic has invested more on the continent during the past four years than what was invested over the prior eight years.
“Malawi is brimming with potential and we are eager to provide finance to commercially viable projects that will contribute to sustainable economic development in Malawi,” said Littlefield, stressing that President Obama and Opic are strongly focused on sub-Saharan Africa.
Last year, Malawi attracted $965 million worth of investment which is 19 percent lower than total investment the country attracted in 2012, according to the Malawi Investment Trade Center (Mitc).
Mitc public relations manager Deliby Nyale earlier said in 2013, Malawi prepared itself for an upsurge of transforming investments, adding that one important transformation process has been the streamlining of the investment coordination and processing environment under the Doing Business reforms.
