Power blackout still a barrier to investment—MCCCI
The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has said intermittent power supply continued to be the biggest hurdle to investment, despite the a number of tariff adjustments effected between 2010 and 2013.
The chamber said this in an assessment of the business environment in 2013, which is the perspective of the country’s private sector.
“When businesses were asked to rate how they perceived the business environment, out of 26 factors, 17 were perceived as most serious in 2013 compared to 11 in 2012,” read the assessment that covered July and September 2013.
It said this indicates that the business environment has deteriorated, adding that electricity refuses to die as the number one problem, despite the Electricity Supply Corporation of Malawi (Escom) implementing a number of tariff adjustments that have had a negative bearing on companies and households.
Late last year, Escom engaged in a number of consultations with businesses and individuals on the parastatal’s intention to raise tariffs by over 50 percent for three years to raise money for capital investment.
However, the suggestions have been shot down by MCCCI and the Consumers Association of Malawi (Cama) arguing that the hike is exorbitant and will have dire consequences on businesses and consumers.
Meanwhile, government is banking its hope on the 64 megawatts from Kapichira II which will be added on to the grid this year.
The MCCCI assessment said uncertainty in economic and regulatory policies has climbed to position two because of uncalled for government interventions in the market.
The private sector lobby group has cited the issuance of export bans when the same government’s National Export Strategy (NES) is supposed to promote exports.
“The interventions in issues not requiring central government intervention such as government procurement requiring OPC [Office of the President and Cabinet] approval when the law is clear about ODDP [Office of Director of Public Procurement] responsibility.
MCCCI said intervention in the government hotel management contract by replacing Peermont with Legacy.
Early last year, President Joyce Banda cancelled a hotel management deal with Peermont in favour of Legacy, a move that is now threatening the multibillion kwacha investment.
It said these acts signify either lack of confidence in the people below or indeed personal interest, and that in such an environment businesses do not thrive.
MCCCI has asked authorities to desist from ‘heinous’ temptations to get involved in matters that raise suspicions.
The chamber has said that uncertainty is the enemy of business and, that “no investor with sizeable resources, who does not want to pay bribes, will waste their time considering Malawi as an investment location, yet Malawi desperately needs investment to create much-needed jobs for its jobless millions.”
