On the Fast Lane of Malawi: Where are we on $1billion FDI from MIF?
This week British Prime Minister David Cameron is filling a plane with captains of business in his country to South East Asia where they are expected to strike trade deals worth £750 million. Wow. This is eye-watering.
The British PM is heading not to India and China but to the furthest corner of South East Asia like Indonesia, Malaysia, Vietnam, and Singapore. The UK we are told has a target of doubling its exports to £1 trillion by 2020 and sees the booming economies in the east as plum markets for British goods and services as well as sources of direct investment to the UK.
In this trip, Cameron is breaking ranks with his predecessors with regards to Vietnam. He will be the first British prime minister to visit that country which has the fastest growing middle class in South East Asia.
As for Indonesia, there are likely to be some diplomatic tensions, of course. The world’s biggest Muslim country has seen between 200 and 500 of its nationals get enlisted into the so-called Islamic State (IS) in Syria and Iraq. The picture is not different from Malaysia where some of its young men have been seen as engaging in weapon training in IS-held territory. But Cameron is focussing on the brighter side of things.
The background is that Britain does more trade with Belgium than it does with Indonesia, Malaysia, Vietnam and Singapore.
But Cameron is visionary. By 2030, the largely untapped South East Asia market is expected to be the fourth largest single market in the world.
When I saw this, I remembered that close to two months ago the Malawi government hosted the Malawi Investment Forum (MIF). The event was touted as the first-ever high level and high profile investors’ forum on the land to bring together potential investors from around the world. Our Chinese friends pumped in around K17 million for the function to take place.
A hyped Minister of Industry and Trade Joseph Mwanamvekha told the country at the end of the forum that within two weeks the business captains from around the world be sealing these trade and investment deals.
The deals promised to transform Malawi’s economic landscape. This is what Malawi badly needed not today but yesterday. But for organising the forum, I gave the government the benefit of doubt.
I have since not heard anything from the Minister since that time except all the negative publicity about government’s investment environment. One of them is that government, through the Green Belt Initiative (GBI) in Salima, has no confidence in its own security. The firm has hired a private security firm—G4S—to guard the Chikwawa Sugar Factory currently under construction.
The background to this is that 10 police men officers who used to guard the premises were arrested in connection with the theft of building materials and some welding machines from the company. If the state can’t ensure security to potential investors, who will?
While Cameron and his 31-member business leaders will go back to the UK smiling after striking the lucrative trades deals, I can on the other hand, guarantee that on efforts to secure trade deals from the recently held MIF, Malawi will continue to be dogged by issues like government’s police officers leading the onslaught not only on investors but also its citizens.
The Salima incident—where government’s law enforcers are in the forefront of perpetuating insecurity in the country—is the 1,001 that I have heard only this year about the country’s police officers being linked directly or indirectly to theft and robbery. All the while, we have a whole Ministry of Home Affairs and Internal Security whose mandate is to provide security to the citizens and organisations.
As I write this, I am reminded of the late Mr Issa Njauju, former corporate affairs manager at the Malawi corruption busting body—the Anti-Corruption Bureau (ACB)—who died in mysterious circumstances two weeks ago. His death is suspected to be connected with investigations that ACB is conducting to bring justice and fairness against enemies of law and order in the country.
All this is happening against the background of an economy that is heading south. Interest rates are prohibitive for investment at 40 per cent, prices of commodities are rising by the day, while the country is reeling under the weight of a food shortage for close to three million Malawians this year for the better part of the year.
Malawi remains one of the top 10 poorest countries in the world with over 39 percent of its population living below the poverty line of $1 a day not for nothing. It is not an appealing destination for investors compared to its neighbours, and that is why it has one of the lowest investment levels on the continent, measuring at only 8.1 percent of the Sub-Sahara GDP average. Government should seek to reverse not only the image but also the trend.
Given the hype that MIF was given and the trade investments deals that were touted, one would have expected government to keep informing its citizens about what has so far fallen into the trade basket as opposed to the total blackout on what is happening as if the MIF was not held at all.
Malawians expect the Minister of Industry and Trade to continually update them on what investments deals government is notching from such forum otherwise they will not be wrong to conclude that the MIF’s success was just politicking aimed at giving people the impression government is at work.
Political will is vital in ensuring that economic policy issues are conscientiously followed through. This seems to be a major deficit in this government. Otherwise the MIF was a good initiative and people are now waiting to hear results.
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