IBAM bemoans hostile business environment
Local businesses have this week complained about a harsh business environment in which they are operating in, with some describing the businesses atmosphere as having reached a ‘boiling point.’
The businesses have also questioned the efficacy of the Economic Recovery Plan (ERP) which the Joyce Banda administration formulated two years ago to heal the ailing economy characterised by high interest rates, double-digit inflation rates and less than six percent annual Gross Domestic Product (GDP), especially in 2012.
Speaking in an interview on Tuesday, Indigenous Business Association of Malawi (Ibam) chairperson Leston Mulli claimed that most of their members have been squeezed out of businesses since 2012 when government devalued the local currency and subsequently floated the unit to reflect the forces of demand and supply.
“The situation has reached boiling point and it is very pathetic. Most of our members are out of businesses and the future looks very uncertain because the environment in which we are operating in is very tough and needs immediate action to reverse such an environment,” decried Mulli.
He said at the moment, demand for most basic goods such as iron sheets, sugar, salt and others has shrunk.
“I agree with what [former Finance Minister] Goodall Gondwe said that we need bottom up approach in the economy to first empower the locals before empowering the elite. But I do not see this happening in our economy,” he said.
Mulli also said the current appreciation of the Kwacha against major international currencies is hurting most businesses, especially exporters as they are selling their consignment abroad at an appreciated rate.
On Wednesday, general secretary for the Central Region Scrap Metal Dealers (CRSMD), Alexander Phodogoma, also lamented tough businesses operating environment which he said has culminated in most of their members finding it hard to sell their products locally.
He said currently, demand for the metals has slumped unlike during the same period last year when most of the members enjoyed a boom in their businesses.
Lilongwe-based female entrepreneur Tamala Banda, who owns Tamala-Designs which specialises in producing and exporting leather bags, said on Wednesday that business has slowed down and suspected that Cashgate might have impacted negatively on income levels of most Malawians, hence low demand for goods.
The general outcry by most businesses comes barely a week after Capital Alliance Limited, an investment and portfolio management firm, noted that the overall economic activity in the first quarter of 2014 has slowed down due to a less favourable financial environment and the looming May 20 elections.
Ministry of Industry and Trade spokesperson Wiskes Nkombezi could not be reached on Wednesday to comment on the complaints by local businesses.
