Investment flows fluctuate
Foreign Direct Investments (FDI) flows to Malawi have been fluctuating in the recent past, peaking at $959 million in 2018 and averaging $50 million between 2019-22, United Nations data has shown.
An analysis of the UN Commission on Trade and Development data by Lloyds Bank shows that FDI inflows stood at $50 million in 2021, while the total stock of foreign investment reached $1.59 billion, around 13.1 percent of the country’s gross domestic product.
“The agricultural sector attracts the most FDI, primarily from South Africa, Germany and the United States, followed by energy and mining. In recent years, there has been an increased interest in renewable energy projects, particularly in the solar and hydropower sectors.
“The exploration of rare earth elements near Lake Malawi could also attract new investments in the mining sector. There is also hope that an oil field would be discovered in the region. Other sectors that offer investment opportunities include agro-processing, manufacturing and tourism.”
In recent years, Malawi has been on the drive to increase FDI flows through, among others, the Malawi Investment Forums.
This year, the Malawi Investment Summit organised by Economist Impact and supported by Philip Morris International and Pyxus Agriculture explored ways to build resilience, reduce bureaucratic barriers to investment and promote rigorous consultation between government and the private sector to unlock opportunities for growth. In his speech at the investment summit, President Chakwera acknowledged governance dysfunctions within public institutions and external shocks as the two biggest obstacles to production, international investment and growth.
