Delegates to the Malawi Agribusiness Investment Summit have asked government and relevant stakeholders to de-risk smallholder farming and pursue public private partnerships to unlock private sector investment in the agricultural sector.
Addressing delegates to the summit at the Bingu International Convention Centre in Lilongwe on Wednesday, Britain’s Foreign, Commonwealth and Development Office senior sector development adviser Tim Lamont said investors are reluctant to invest in agro-based businesses despite agriculture anchoring the local economy.
Data from the Ministry of Agriculture shows that agriculture contributes about 20 percent to the country’s gross domestic product (GDP) and about 75 percent to the country’s foreign exchange earnings.
Lamont said private sector investment to the agricultural sector remains relatively low at $60 billion against an estimated demand of over $160 billion.
Speaking at the same event, NBS Bank plc head of food and agribusiness James Chiumia said investors are usually reluctant to invest in the agricultural sector because most of the proposals made to the banks are not “commercially viable”.
He said: “One of the biggest challenges among SMEs and smallholders farmers is the high interest rates. We have to understand that those problems cannot be solved overnight.
“For now, we have to focus on enhancing productivity and efficiency in smallholder farming. We should look at de-risking the agricultural value chain to make it more attractive to investors.”
Malawi Agriculture and Industrial Investment Corporation chief projects development officer Pius Mulekano called on the government to activate enablers to agricultural transformation to make agro-based ventures more commercially viable.
He urged stakeholders in the sector to focus their investments on mechanisation and irrigation to enhance productivity and efficiency in smallholder farming.
“Farmers should also be encouraged to use science-based methods of farming such as soil testing so that farmers know what types of fertiliser to apply,” he said.
President Lazarus Chakwera has earmarked agriculture as one key driver of economic growth.
