The decision by President Lazarus Chakwera to dissolve cabinet and his subsequent hint not to retain Minister of Lands Kezzie Msukwa in the next reconfigured cabinet is a milestone towards Tonse administration’s efforts to spur Foreign Direct Investment (FDI) inflow as well as restoring donor confidence.
Anywhere in the world, FDI inflow is a critical enzyme for economic growth and Malawi is not an island as the agro-based Southern Africa nation is yearning for increased FDI, and Chakwera himself has repeatedly said this before in his previous addresses to the nation.
Picture this: Investment rates averaged 15.3 percent of gross domestic product (GDP) from 2000 to 2019, while neighboring Zambia (35.4 percent) and Tanzania (32 percent), according to a recently-released Country Private Sector Diagnostic (CPSD) report, launched recently by the World Bank in Lilongwe.
But that rating is bound to take a different course, according to Chakwera, as he promises an economic transformation that has already sparked the interest of foreign investors from across the corner of the global sphere.
On one hand, the country is also still at crossroads with the international community, more especially when it comes to direct budget support which was affected soon after Cashgate scandal was unearthed in September 2013.
Before suspension of direct budget support, donors were putting up to 30 percent in Malawi’s recurrent budget and at least 85 percent of the development budget.
But the first citizen has taken a bold approach in his latest showdown.
He has demonstrated courage that has earned him praise from all people regardless of political affiliations.
Chakwera is fully aware that there is need for a continuous battle to be waged against dangerous cartels of corruption that have milked Malawi dry for decades.
He is cognizant of the fact that a promise of ending corruption, which he made himself Malawians, is also at the heart of all unsuspecting Malawians who also loathe corruption of all type.
“My resolve to win this fight is the reason why I have never once interfered with ACB [Anti Corruption Bureau]
investigations, including those into the conduct of my
own Ministers. My resolve to win this fight is the reason
why even I myself have cooperated with ACB investigations by subjecting myself to questioning by its officers, which no sitting Head of State has ever done in this country,” said the President in his Monday address.
True to his words, Chakwera has always been the most vocal advocate against corruption and supporter of its work ever since he ascended into power.
And over the past one year he has steered the ship, he has single-handedly fought so many evils just to make graft-busting body free from hassles, and he confessed on Monday.
“I have fought many forces to ensure that the Bureau is fully funded and its Chief is well-protected,” said Chakwera.
What is, however, clear in all his Monday’s bold actions, the president has provided Malawi economy a new-lease of life and the tone that will go in long way to excite further the international community while also inducing the excitement by would-be investors.
FDI inflow is what Malawi urgently need, among others, as it unleashes job creation which reduces unemployment pressure, provides for the much-needed tax revenue to government, increases exports as foreign investors don’t only produce for domestic consumption but for exportation as well.
More importantly, FDI inflow helps to facilitate the transfer of technology from elsewhere to countries such as Malawi which is a critical ingredient of Malawi’s planned self-reliance and wealth creation as envisaged by the Malawi 2063, which is Malawi’s new long-term national development strategy replacing Vision 2020.
An uptick in FDI announcements prior to the Covid-19 crisis was a promising sign of confidence in Malawi’s investment climate.
Prior to Covid-19, a small number of fairly large deals seemed to suggest Malawi was becoming a more attractive location to invest and this is remains the conviction of Chakwera and team.
For example, China’s continued interest in the real estate sector, and a joint venture with European partners for green building and manufacturing rings a bell of Malawi as a sort-after investment destination.
Let us also not put into oblivion that government also signed a major PPP with an Israeli firm to invest in one of the region’s largest greenhouses for horticulture production.
In addition, a leading tea, coffee, and macadamia producer from Kenya has expanded into Malawi for macadamia and coffee production with over 3,000 smallholders.
In the energy sector, a Swiss company won the country’s first-ever competitive tender for a power purchase agreement (PPA) recently. Summing up all these, Malawi is deemed as a conducive business environment.
The tone set by the President in his Monday address and the action he has undertaken by dissolving the cabinet, among others, speak of a leader who is decisive and this always augurs well with the “let us wait and see” investors all over the world as well as Malawi’s traditional donors who are also craving for a restored Malawi.