Tuesday, October 28, 2008
by Pilirani Semu-Banda
LILONGWE, Aug 12 (IPS) - Malawi is on the prowl to extend its trade connections to different corners of the world, west and east. The small southern African country is hoping foreign investment will help it to become a producer and exporter rather than a consumer and importer economy, as is presently the case.
The Commonwealth Business Council (CBC), which seeks to link budding markets in the developing world with the international private sector, has become Malawi’s latest ally in its quest to find much-vaunted, but ever-elusive, investment by foreign companies.
‘‘The Malawi economy is as good as any economy you would want to invest in. We have achieved a lot. The International Monetary Fund (IMF) cannot believe what we have achieved in just four years. We have managed to stabilise the economy,’’ Malawi’s finance minister, Goodall Gondwe, told the CBC.
The CBC and the Malawi government agreed on July 18 that the council will assist in wooing investors for the country’s industries of mining, tourism, information technology, telecommunications, agriculture and agro-processing, transportation, energy and banking.
The CBC was founded by the Commonwealth’s heads of state at a meeting in 1997 in order to use the network connecting Britain and its former colonies to spur investment and trade.
The new deal comes on the heels of another trade venture which the small southern African country has cultivated with the emerging trade giant, China. Just in May this year Malawi signed a memorandum of understanding with the Asian state, aimed at promoting bilateral trade relations between the two countries.
Another three trade missions are expected this year -- from Japan, the United States and India.
A total of 25 major project proposals were presented to the CBC by Malawian business people, with bankable projects worth 10 million dollars and above.
The council will facilitate investment of 20 million dollars by a team of financiers from the developed world for an upmarket international conference facility.
This is aimed at attracting international conferences to the country, head of the CBC team that visited Malawi, Sanmit Ahuja, told government and private sector leaders who met his delegation.
‘‘There is a lack of conference facilities in the country. We believe that if we invest in a conference centre, Malawi will be able to host international conferences and in turn attract more tourists into the country,’’ said Ahuja.
The CBC and the Malawi government, through the ministry of trade, have since agreed on an action plan which will ensure that the country sustains momentum based on its economic fundamentals.
Through a communiqué signed by Malawi and CBC, the country is expected to promote public-private partnerships for the provision of economic infrastructure and to increase productivity in the agricultural sector to ensure food security.
It is also expected to build on existing economic advantages, such as tourism and information communication and technology, as a way of broadening its economic base.
The CBC, on its part, promised to facilitate the availability of geological surveys to develop and exploit Malawi’s mineral resources and attract investors to transportation, energy and health.
The council also pledged to commit itself to creating a follow-up mechanism on the investment pledges that were made during the visit.
Gondwe told the CBC that Malawi is courting investors to help build the country’s private sector which, he said, is the engine of economic growth.
Gondwe also assured the CBC delegation that the country’s markets are up to standard and that government will continue to step up the trade environment and improve security on investments.
He explained to the CBC team that Malawi’s interest rates are down from around 35 percent in 2004 to about 15 percent now and that the inflation rate has dropped from 17.5 percent to 7.9 percent during the same period.
‘‘Government’s target is to cut the inflation rate to about 6.5 percent by the end of the year, to make the economy even more stable,’’ Gondwe promised CBC.
The industry and trade minister, Henry Mussa, has since indicated that Malawi is arranging more trade missions this year. He said the country is now targeting the United States, India and Japan.
‘‘We expect to start seeing the real fruits of improved trade and investment in three or four years to come. In three to four years’ time, real investment will take place in the country,’’ Mussa argued.
CBC works to provide leadership for the improvement of international trade and investment flows, to create new business opportunities and to promote good governance and corporate social responsibility. It seeks to reduce the digital divide and to integrate developing countries into the global market.
The visit by CBC to Malawi followed a Malawi Investment Forum which was held in London in April this year. The forum is reported to have generated a lot of interest in investing in Malawi. (END/2008)