Japanese Ambassador Youichi Oya says most businesses in his country are sceptical to invest in Malawi due to the regulatory environment and utility risks, including erratic supply of utilities.
Speaking at the second Japan-Malawi Business Seminar in Lilongwe yesterday, he said this is happening despite the embassy courting Japanese businesses to invest in Malawi.
Oya said Malawian businesses can still benefit from their Japanese counterparts through business franchise partnerships.
comfortable. | George Lumwira
He said: “Foreign investment is key to minimising the challenges of this country. As the Japanese Embassy, we are working hard, we are asking Japanese companies to invest in this country.
“But the investment environment is still not comfortable for the Japanese companies, maybe other countries as well, compared with surrounding countries. The Japanese companies are very worried about risks. So, it is difficult to bring in Japanese companies because of many risks.”
However, Oya said Japanese companies such as Tokyo8 Global which produces organic fertiliser as a replacement of chemical fertilisers offer franchise opportunities which could be transformative for Malawi as an agro-based economy.
Tokyo8 Global international business development officer Glory Sibale said the company has already started working with potential franchisees as their liquid fertiliser certificate process is at advanced stages in the country.
She said: “This product is not just biofertiliser. It is a product that will help Malawi’s environment and agriculture in terms of improving soil quality, soil texture and also transition the country from overdependency from chemical fertilisers towards organic fertilisers. It is also available at lower prices.”
The sentiments come at a time experts have been stressing that for the country’s economy to grow, there is need to incentivise Foreign Direct Investment (FDI) to significantly invest and produce more for import substitution and exports.
In an interview, Chamber for Small and Medium Businesses Association executive secretary James Chiutsi described the challenges outlined by the envoy as longstanding which also affect local investors and need urgent attention.
Earlier, Malawi Confederation of Chambers of Commerce and Industry deputy president Arnold M’bwana observed that the government is still assessing the incentives to offer foreign investors as evidenced by the instability of incentives that were offered.
Mzuzu University economics lecturer Christopher Mbukwa said while FDIs play critical roles in boosting the country’s productivity capacity through technology transfer and access to international markets, it should be done alongside the thriving local sector.
Ministry of Trade and Industry spokesperson Patrick Botha was not immediately available for comment.
Japan is expected to host the Tokyo International Conference for Africa Development from August 20 to 22.
