BAM ask government to create conducive environment for doing business

BAM ask government to create conducive environment for doing business

Misheck Esau CDH MD/CEO
 Picture taken from:
 www.cdh-malawi.com.

Bankers Association of Malawi (BAM) have asked government to create better conditions for business and investment so that Malawian businesses are not lag behind from what other business from other countries within the region are doing.

BAM president Mishek Esau made the call when presenting a topic ‘Doing business in Malawi: a financial sector perspective’ where he indicated two key annual reports on doing business by the World Economic Forum (Malawi: 132/144) and the World Bank (2015 Mw: 160/189) and the local key report produced by MCCCI have clearly shown that “Favourable conditions expected by the business community to be present in a country for business and investment to flourish in relation to other countries”

“We might do well this year and move a step, but also other countries are also on the move and that’s the most important thing. So we are in competition with each other” said BAM President Mishek Esau

“Countries are in competition with each other for foreign direct investment and also trade opportunities. Malawi needs to create a conducive environment to be able to compete on the world stage. Bankers are saying Malawi as a country we are too disorganised to compete on the World stage!”

BAM has among others mentioned that the country must improve on address challenges that business community are experiencing including unstable economic environment which makes long term planning problematic and cost of doing business which is too high. He in this respect mentioned high interest rates, high inflation rate and unstable exchange rate.

Esau said the solution is to create an enabling environment by a complete overhaul of monetary policy to one that reflects the realities, enhance fiscal discipline as well as reviewing of Monetary policy transmission mechanism.

BAM president also mentioned poor infrastructure of roads, energy, water and telecoms. He urged government to accelerate public sector investment programme through alternative ways of financing such as bond issues, Ring-fencing of statutory levies for investment like road levy, MAREP levy to service bond issues for development and invest in toll gates on roads where people must pay whenever they enter into a district or a city.

“Almost all commercial parastatals like Blantyre Water Board where we are experiencing frequent disruptions in water supplies can raise money in this way if they were well managed!” he said

BAM also indicated that there is under-developed capital market and that Security lapses is threatening confidence to businesses which MCCCI Chief Executive Officer Chancellor Kafera Panjira when making his presentation on ‘Cost of doing business’ also mentioned similar concerns including water disruptions particularly Blantyre Water Board, as areas consistently remain key constraints to economic development.

But speaking on some of these areas before engaging in camera discussions with the business community, President Mutharika gave hope to the business community that his government is trying to address these issues.

On security President Mutharika said “Recent high profile insecurity incidents may sow seeds of panic but this will not derail Government’s commitment to protect the economic interests of all companies against criminal activities.”

He said his government is making sure that security institutions have adequate resources “Additionally, Government will continue to enhance the capacity and professional competence of our security institutions to enable them to respond adequately to the security needs of the private sector.”

On Energy President Mutharika also mentioned that “Our Government will increase availability of reliable, sustainable and affordable energy. The current lack of access is one of the main obstacles for productivity growth and industrialisation. Therefore, this Government is in the process of enhancing the efficiency of the services of the Electricity Supply Corporation of Malawi (ESCOM) by separating its functions into electricity generation, distribution and marketing.”

He said “A US$ 350.7 million grant from the Millennium Challenge Corporation has been secured and is funding a Power Sector Revitalisation Project (PSRP). Furthermore, we are incentivising private sector companies to invest in the Energy sector through PPPs. At the end of this process, we shall see a thriving electricity sector that supplies enough energy to all Malawians.”

And concerns on infrastructure President Mutharika has assured the business community in the country that “Our government will improve transport infrastructure for traffic by road, rail and air and will prioritise those with economic drive.”

“We recognize that good transportation infrastructure can be a catalyst for agricultural development, industrialisation and trade. Therefore, this Government plans to improve road infrastructure through the resuscitation and construction of a number of roads, the rehabilitation of railway networks that can link all of Malawi to the Nacala corridor, and the construction and upgrading of international airports.”

“Government is committed to operationalize the Nsanje Inland Port. I am convinced that these projects, if successfully implemented, will significantly increase the attractiveness of Malawi as a destination for investors and tourists.” Said President Mutharika before engaging holding discussions with the business community in camera