Manufacturers Association of Malawi says lack of an enabling business environment has led to job losses, subdued government revenue and dwindling growth of the sector.
Speaking in an interview on the sidelines of a meeting with Minister of Trade and Industry Sosten Gwengwe and his officials in Blantyre yesterday, the group’s chairperson Godwin Ngoma said more firms have closed shop while others have switched to trading as opposed to local production due to unfavourable policy and taxation issues.
He said: “For any country to develop and do well, manufacturing needs to be the biggest enabler.
“In Malawi, manufacturing has been dwindling every year because the environment has not been well. What we want is for government to deal with operational and structural challenges and implement our proposed solutions.”
Ngoma, who is Coca-Cola Beverages public affairs director, said local manufacturers have the potential to boost exports and create jobs, but the environment for doing business is not conducive.
On her part, Annie Chifulemba Msiska, director of Blantyre-based Joan Footwear, said while small-scale enterprises (SMEs) are under the impression that the Ministry of Trade and Industry supports local manufacturers through various interventions such as Buy Malawi Strategy, on the ground the situation is different.
She said as an SME in the footwear manufacturing, they are limited in terms of participation in government business.
Said Msiska: “We are limited from bidding as the requirement to bid for the full lot of footwear comprises 80 000 pairs of 10 different items, but if this was broken down, small businesses would have been able to bid.
“Besides that, the requirement to have a credit line of K100 million or more limits most SMEs.”
She said government procurement should ensure that it accommodates SMEs to enable them to thrive and create jobs.
Malawi has over the past 30 years failed to make headway in the manufacturing sector, leaving analysts wondering whether the promotion of import substitution and industrialisation is yielding results.
The poor industrial performance is despite the Malawi Government implementing policies aimed at supporting the private sector and promoting value addition such as National Industrial Policy, National Trade Policy and the National Export Strategy I and II.
Minister of Trade and Industry Sosten Gwengwe conceded that there have been many challenges that contributed to the declining growth in the manufacturing sector.
He said: “We need to look at our sector’s hurdles most of which have been compounded by shortage of foreign exchange and an enabling environment that has not been supporting the sector.
“We are looking at six months to turnaround the situation. We want the private sector to work as harder as they can to turn the corner together after aligning the exchange rate.”
In November this year, the Reserve Bank of Malawi devalued the kwacha by 44 percent to align the official and parallel market rates.
