Malawi Confederation of Chambers of Commerce and Industry (MCCCI) says scarcity of forex is one of the most pressing challenges affecting the manufacturing sector.
Speaking during the opening of the Second Annual Manufacturing Conference in Blantyre yesterday, MCCCI councillor and Press Cane chief executive officer Bryson Mkhomaanthu said the unavailability of foreign exchange has hampered the sector’s ability to import essential raw materials and inputs necessary for production.
He said the shortage has resulted in production delays, increased costs and reduced output, making it increasingly difficult for manufacturers to meet both domestic and international demand.
Said Nkomaanthu: “Our journey towards industrial prosperity is both demanding and promising, and it is imperative that we navigate this path with clarity and determination.
“Our export-oriented approach has not fully succeeded. Instead, there has been an increased inflow of finished goods into Malawi under these arrangements.”
Moving forward, the MCCCI councillor said it is crucial to balance national goals and regional trade arrangements by exploring initiatives that promote a balance between export-oriented and import substitution approaches to develop the manufacturing sector.
According to the 2021 United Nations Industrial Development Organisation Competitive Industrial Performance (CIP) Index, Malawi is ranked 142 out of 153 economies.
Malawi’s neighbours Mozambique are ranked 135, Tanzania 129, Zambia 126 and Zimbabwe 116.
The CIP considers a country’s productive capacity, intensity of industrialisation, and impact on the world market as major components.
This is despite numerous policies government has been implementing to support private sector development, apart from signing several bilateral and multilateral trade agreements to provide the private sector with markets.
On his part, Minister of Trade and Industry Sosten Gwengwe urged resilience among firms as government is working hard to promote industrialisation.
He said: “If the sector is dwindling, then obviously, the economy dwindles and the common man is hampered by hyperinflation and shortage of supplies.
“We have the new industrial development policy through which we are advocating for inter-linkages in our industry.”
Meanwhile, United Nations Development Programme resident representative Fenella Frost said the agency remains committed to fostering an enabling environment for industrialisation in the country.
“We recognise that manufacturing is not just about production, it is about supply chains that empower communities, uplift small and medium enterprises, and drive national prosperity,” she said.
The manufacturing sector is the third largest contributor to the country’s gross domestic product, accounting for 11 percent, after agriculture at 22 percent and the wholesale and retail trade sector at 12.6 percent.
