British Prime Minister Boris Johnson this week hosted the inaugural United Kingdom-Africa Investment Forum in London, a platform through which the UK also unveiled a new strategy for development in Africa ahead of its withdrawal from the European Union (EU) on January 31.
President Peter Mutharika was among the 16 African leaders who attended the forum where Britain also signed 11 trade agreements with the African States.
From the meeting, we learnt that British businesses have already signed deals worth $7.8 billion and counting with African countries. I am not privy as to how much of this multi-billion dollar investment cake is destined for my beloved Malawi.
Prior to the London forum, Malawi Investment and Trade Centre (Mitc) indicated that it prepared 18 bankable projects for marketing.
Naturally, like every patriotic Malawian, platforms such as the recent investment forum in London should be exciting news. But, given past experience, I am not excited, to say the least.
This is not the first time that Malawi has taken part in such forums. In fact, in 2015 the country hosted the Malawi Investment Forum through which it sought to court potential foreign direct investment (FDI).
Mitc presented an investment compendium comprising 118 bankable projects in various sectors, including energy, mining, agriculture, manufacturing, media and communications and infrastructure development. In 2015, on the other hand, the compendium had about 76 projects.
We were told that seven companies signed memorandum of understanding (MoU) agreements while the one held in 2015 yielded deals and MoUs estimated at $1 billion. Few of the projects have taken off.
Malawi, according to the 2017 Malawi Economic Report, remains one of the countries with the lowest levels of meaningful FDI.
For years, Malawi has always promoted itself as a good destination for FDI because it enjoys peace and stability. However, peace in itself is not a major catalyst. It is a means, but not an end in itself. Peace and stability should be balanced with an economic environment that stimulates doing business.
Malawi has relatively stagnated on the World Bank’s Doing Business Index largely because of the slow pace in implementing legal and regulatory reforms to improve the business climate. Unreliable utilities such as water and electricity supply and high cost of finance are some of the contributing factors.
Back in 2018, the UK Government stated its ambition to be the largest G7 investor in Africa by 2022. Britain’s Department for International Development(DfID) pegged UK-Africa trade as worth over £33 billion in 2018 and that about 2 000 British businesses currently operate in Africa. Malawi should strive to tap from such huge injections.
From the past initiatives, the experience has been that full of promise but in reality the trickling of new investment generated from the forums has been frustratingly slow or, in some cases, non-existent.
It is my expectation that this time around the Mutharika-led investment hunting team will yield positive results for the country.
It is encouraging that the Malawi team also includes 10 private sector firms, including Press Corporation plc and Nico Holdings plc.
Malawi has failed to reap benefits from international trade and has also stagnated in as far as attracting new meaningful investment is concerned.
But, if truth be told, Malawi, more than any of the participating countries, needs more meaningful FDIs, not mere trading by some ‘illegal’ foreign nationals who masquerade as investors.
There is stiff competition for FDI. To get investors, there is need for seriousness, less talk and more action. The country should utilise the expertise of investment and policy professionals. The business environment should be improved as per guidelines on the World Bank Doing Business Report. Politics should also be taken out of the equation. If we do that, then, surely, Malawi will be open for business.