By Duncan Mlanjira
In a communique from the UK-Africa Investment Summit, Malawi has been mentioned to be amongst African countries to benefit from the support of the UK Government.
Malawi President Arthur Peter Mutharika attended the Africa Investment Summit, which was opened by UK Prime Minister, Boris Johnson on January 20.
The communique said Summit agreed new lasting partnerships between the UK and African countries to deliver more investment, jobs and growth.
It said the Summit demonstrated that the UK Government will go further to generate business to business links between the UK and Africa, capitalising on the exciting potential of the African Continental Free Trade Area which, when ratified, will create the world’s largest free trade area, with a population of 1.2 billion.
For the increase in trade the UK says it has committed to over £397 million of new programmes to boost further trade and investment links between the UK and Africa.
According to the communique, there are some new country specific programmes to assist southern Africa and that includes a new programme in Malawi to support its shift into high value sectors for exports (funding of £95 million).
The assistance to southern Africa is to increase intra-African trade flows, reduce barriers to trade and increase investment with funding of up to £200 million over seven years.
The programme is also to launch a new Africa Investors Group to drive future growth and investment.
And also to establish an import promotion service, Trade Connect, to support African businesses to increase their presence in international markets, as well as support UK firms to source quality products from Africa (funding of £20 million).
And also to establish a Growth Gateway, available immediately to support all businesses, including from Africa and the UK, to trade with and invest across Africa (funding of £37 million).
More than one thousand people attended the summit, including Heads of State and Ministers from African Governments, CEOs and senior representatives from African and British businesses, institutional investors, international organisations, financial institutions and civil society.
In his keynote address, entitled ‘Malawi: Africa’s Investment Opportunity’ made on January 22, President Professor Peter Mutharika said the programme ‘Out of Africa, Invest Africa’ has identified Malawi as one of the most important investment destinations.
He said Malawi has a lot of resources and opportunities and reiterated that Malawi is not a poor country but it is only the people who are poor.
“As a matter of fact, poverty is an investment opportunity…Malawi is a country where you can come to create wealth. The challenge is that most people do not know the art of creating wealth.
“My job in leading this Government is to create conditions that enable the private sector to grow and create new wealth. Our policy is to create a bigger private sector and remain with a smaller public sector.
“This is our starting point. In short, we want a bigger private sector and a smaller but efficient public sector. We have taken belligerent measures to create growth of the private sector by doing a number of things.
“a) We have been improving the economy in order to create an environment where investments can grow. Nobody wants to invest in a collapsing economy.
“b) We officially launched a foreign direct investment program to encourage investors like you to come to Malawi and take up various investment opportunities abound in Malawi.
“c) We have carried out public sector reforms, including reviewing our legal framework, in order to improve the environment of doing business. As a result, Malawi has been rising on the World Bank Index of Doing-Business for the last five years.
“d) We started an aggressive infrastructure program because investment and trade require a good transport network. For example, we have built more roads than ever in the past five years. We are also expanding and diversifying energy generation as part of the infrastructure for investment. Our goal is to reduce the cost of production.
“e) We have commenced projects that are intended to upgrade local Malawians into productive actors in the private sector in order to complement foreign investors. For example, we have launched an Agricultural Commercialisation Project because agriculture is so far the backbone of our economy.
“f) Last, we are ensuring that Malawi must have a very productive skilled labour market to support investors. We are constructing community technical colleges to empower the Youth with skills across the country. I believe no society can develop without a skilled labour force.
“Any investor who comes to Malawi will find a very well skilled labour market.
“Malawi is growing both at the macro-economic and micro-economic levels. As I speak, Malawi has a very good macro-economic environment which every investor needs.
“Our inflation has been in the single digit with a stable local currency for the last four years. Inflation was at the average of 8.8 percent throughout 2019.
“At the same time, we have reduced our interest rate down to 13 percent. By the way, interest rate was 47 percent when I took government in 2014.
“Now we have comfortable reserves of forex that has gone up from 2 months to 6 months of import cover lately — the highest in the history of our country.
“In the past three years, we have registered impressive average growth of 4.7 percent. In 2019, our GDP grew by 5 percent. This is one of the best economic growth records in the world.
“Some economic commentators have actually forecast Malawi as the next economic boom in our part of Africa. And I am certain you want to be part of this economic growth.
“But as we know, people are the reason why governments exist. We want Malawians to experience economic growth in their individual lives.
“So far, we have made the right policy decisions and taken the right actions. Many positive-minded Malawians are busy pursuing the opportunities we have created and changing their lives.
“Whatever challenges we face, Malawi remains an economic rising promise. I invite you to be part of our growing economy. Be part of the story,” Mutharika said.