The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) say the country can move forward economically if it adopt and priotise Industrialization and Manufacturing sector.
MCCCI has come clear
that Malawi economy to succeed like China, Malasia among others it will have to
be driven by the manufacturing sector, as it produces high value exportable
goods, and maintains sustainable meaningful employment.
“Currently the
critical challenge is that the private sector is not growing particularly the
key sector of manufacturing. We need to emphasize on manufacturing because
manufacturing has different characteristics.” Said Mr. Chancellor Kaferapanjira MCCI Chief Executive Officer
“Every country that
has made progress in terms of economic development has done so because of
manufacturing sector. When you have factory you have sustainable jobs, a lot of
linkages within the economy and you produce products that have value added and
the prices of manufacturing goods are unlikely to be volatile like prices in
agriculture. So manufacturing should be number one priority for Malawi to move
forward.” He said
“The Malawi Investment
and Trade Center has indicated that per capita GDP, in other words income per
person in Malawi is below those of other countries. The major reason is that
the exports that we are exporting out of this country are raw materials and are
subject to face volatility.”
“Manufacturing has consistently contributed
just around 10 percent to GDP over the past two decades, and the outlook is not
promising either. Yet for the Malawi economy to succeed it will have to be
driven by the manufacturing sector, as it produces high value exportable goods,
and maintains sustainable meaningful employment.”
Kaferapanjira also
said government needs to correct some inconsistent policies that may discourage
industrialization by giving an example of raw materials for making soap (soap noodles) that
attract duty at 25 percent and V.A.T at 16.5 percent while, imported finished
soap does not attract duty and V.A.T.
He added that laws like Special Crops Act, Assent to Land Bill, The Companies Act, are not
consistent with investment needs of the country and must therefore be reviewed. The Land Bill must also be
accented to.
Kaferapanjira also asked
government to address current costs and access to finance. He said lending
rates in banks are high and banks usually target sectors or projects with high
rates of return over a short period of time. He added that such challenges are
also affecting Small Medium Enterprises (SMEs) in addition to lack of necessary
skills because of lack of adequate SME support on business information and
support.
He also urged government
to consider providing export guarantee insurance.
Meanwhile President
Peter Mutharika on
Wednesday evening at Kamuzu Palace in Lilongwe during the launch of Projects
Compendium and National Dialogue on Private Sector Development assured business community that his government
will facilitate the access to finance for Malawians, particular long term
loans.
“I know that banks are reluctant to lend
money to Malawian entrepreneurs because of high default rates and inefficient
enforcement mechanisms. Therefore, this Government will fast-track the
operationalization of the Credit Reference Bureaus through an amendment of the
relevant Act. Reform the secured transactions regime through the
operationalization of the Personal Property Securities Act and the Collateral
Registry, and the establishment of a National Identification and Registration
System.”
Furthermore, he said “To
address long term financing constraints, the Government, through the Reserve Bank of
Malawi, will establish a Development Bank that will fund projects that
have a potential to bring structural transformation to this country.” And
added, “We will further support the Export Development Fund (EDF) by
guaranteeing its US Dollar line of credit”
He added that the unpredictability of
policies has been identified as one of the major obstacles by some segments of
the private sector his administration will ensure transparency and avoid
disruptive policy reversals.
“This will entail review of certain laws that
are riddled with discretion and replace them with predictable provisions.” He
said
He also assured that government will advocate
for the enactment of all land-related Bills that were submitted to parliament, in
order to strengthen the rights of all land holders and allow for a more
transparent and efficient land market. Furthermore, he said government will
improve land management and administration and with support from its development
partners, will undertake a land profiling study of the whole county in order to
identify available land for investment.
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