Malawi has tumbled seven steps to 136 out of 148 economies on competitiveness indicates the World Economic Forum’s flagship report, the Global Competitiveness Index (GCI) 2013-14.
The report released on Tuesday, shows that Malawi scored an overall 3.3 out of a possible maximum of seven and assesses the competitiveness of economies and provides insights into the drivers of their prosperity and productivity.
The report which has three pillars—basic requirements, efficiency enhancers, and innovation and sophistication factors—further indicates that since 2011 Malawi has dropped by a whopping 19 steps, from 117 (3.6) in 2011, to 129 (3.4) in 2012 to the current 136 (3.3).
Ranking high on the problematic indicators, according to the latest report are foreign currency regulations, access to financing, tax rates, corruption, and theft and crime.
Reacting to the news Ministry of industry and Trade spokesperson Wiskes Nkombezi in a telephone interview on Thursday, argued that Malawi has improved tremendously and the basis of the report is outdated.
“We have improved a number of things and the business environment is better than last year due to the reforms that have been implemented.
Some of the issues being raised in the report such as foreign exchange regulations, and theft and crime no longer apply now. We have liberalised our foreign exchange regime and the country’s security has improved since last year,” said Nkombezi.
Reacting to the report which shows that 18.3 percent of respondents indicated that foreign currency regulations is the most problematic factor for doing business, Reserve Bank of Malawi spokesperson Mbane Ngwira in a telephone interview said the central bank has liberalised the foreign exchange regime.
Ngwira noted that the RBM has implemented a lot of reforms on foreign exchange transactions including cross border trade, seeking approval for international payments, and tobacco auction floors foreign exchange.
However, Indigenous Business Association of Malawi (Ibam) president Mike Mlombwa in a telephone interview took government to take arguing it needs to do more to improve the business environment.
“There has to be political drive to ensure that Malawi becomes more competitive and improves the business environment. This will consequently encourage the development of small scale enterprises and indigenous businesses. Interest rates are so exorbitant which is big problem in terms of access to finance especially for small businesses,” said Mlombwa.
In the region, neighbouring Mozambique inched up one step from 138 to 137, Zambia improved from 102 to 93 and Zimbabwe moved up from 132 to 131. Ethiopia fell from 121 to 127, Tanzania fell from 120 to 125, South Africa slipped from 52 to 53, Rwanda moved down from 63 to 66, and Botswana moved up from 79 to 74.