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Malawi FDI dropped 88% in 2020—report

Malawi’s foreign direct investment (FDI) registered an 88 percent decline to $98 million (about K7.74 billion) in 2020, a recent United Nations Conference on Trade and Development (Unctad) report shows.

The Unctad’s 2021 World Investment Report released on Monday says the decline was largely due to the economic turmoil caused by the Covid-19 pandemic, policy uncertainty for investors and elevated geopolitical risks.

The Investing in Sustainable Recovery Report shows that in 2019, Malawi generated $822 million (about K6.49 trillion) in FDIs, down from the previous year’s $959 million (about K7.57 trillion).

In a statement accompanying the report, Unctad director of investment and enterprise James Zhan said to ensure recovery, countries should focus on infrastructure sectors.

In a written response to an e-mailed questionnaire on Monday, Malawi Investment and Trade Centre (Mitc) investment promotion manager Modie Chanza admitted that Covid-19 has led to a downward trend of investors coming into Malawi to register their investments.

She said: “Some companies that are already operating in the country have also been heavily affected by Covid-19.

“They cannot secure funding from foreign partners who have now been affected by Covid-19, the cost of importing raw materials has increased and others have scaled down on production while some have lost part of their market.”

Chanza said Mitc has taken some measures to promote and facilitate investments in the face of the pandemic, adding that “Mitc is working with the Ministry of Lands in securing land parcels that can be availed to investors in order to deal with challenges they face in accessing land”.

She said all investment opportunities have been uploaded on Mitc website for easy access and that their investment promotion team is readily available to provide business support to all investment enquiries via online platforms like the website, e-mails and even phone calls.

In Malawi, most of FDI has been directed to the energy sector followed by the manufacturing and mining sectors.

Over the past five years, the leading sources of FDI are from Australia, China, India, Republic of Korea, South Africa, United Arab Emirates, the United Kingdom, Northern Ireland and South Africa.

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