Malawi Economic Outlook and Opportunities
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Transcript of Malawi Economic Outlook and Opportunities
Malawi Economic Outlook and Opportunities
United Kingdom - Malawi Investment Forum20th March 2013
Clement Kumbemba,CEO Malawi Investment and Trade Centre
(MITC)[email protected]
www.malawi-invest.net
Introducing Malawi
Population 15.4m GDP $5.6bn
Population growth rate 2.8% GNI per capita $360
Rural population 80% Exchange rate $1 = MWK 383 (at 10.03.2013)
Urban population 20%
“The warm heart of Africa!”
Key figures
Second most peaceful country in Africa: Global Peace Index 2009
Stable democratic government
English-speaking and growing managerial work-force
Macro-Economic Performance
•GDP Growth expected to rebound to 5.5% in 2013 from 1.9% in 2012 due to re-establishments of external credit lines, improved availability of foreign currency and fuel and favourable weather conditions.
•Headline inflation accelerated to 35.1% in January, 2013 largely due to declining food stocks. Inflation figure in April, 2013 is projected to slow down to 32.1% and will decline further to 18.0% by Dec.2013.
•Interest Rates remain high at 25% Reserve Bank Base Rate. Commercial Bank lending and savings rates are averaging 36% and 10.5% respectively.
Cont. Macro-Economic Performance
•Exchange Rate of the local currency has continued to weaken against the major currencies after the devaluation and is currently averaging US$1 = MK390. It is expected to stabilize by June, 2013 due to receipts from tobacco and agricultural related exports.
•The Central Bank has revised upwards the export proceeds retention rate from 60 to 80 percent. Move will significantly encourage disclosure among exporters and will also boost exports.
Strategic Direction for Malawi
A new coherent national framework for investment
- Key development strategies (MGDSII, ERP, NES) aimed at encouraging private sector led economic growth
- Provides a coherent policy for investment in priority sectors and export clusters
- Aims to increase ease of doing business and transform Malawi’s economy into one of the fastest growing in Sub-Saharan Africa.
Reforms in the critical areas for private sector development
- Reforms in immigration specifically target ease of access of the country by foreigners
Malawi’s Prospects are Bright
Fiscal Policy Measures
• Austerity measures to reduce unnecessary expenditure and focus on key result areas
• Removal of subsidies on petrol and utilities
• Review of tax incentives structure
• Recent reforms in tax administration
Economic Reforms Under Ministry of Industry and Trade
• Task Force to Improve the Ease of Doing Business in Malawi which has timelines and targets and is working with all stakeholders involved in business registration and facilitation
• Operationalization of the One Stop Investment and Export Centre. Government through the Investment and Export Promotion Act has empowered the Malawi Investment and Trade Centre (MITC) to be the focal point for investment and trade matters.
Other Key Investment Enablers
• Political Stability and Peace
• Security of Life and Property Guaranteed
• No history of Civil War and Peaceful and Democratic Government Changeovers
• Peaceful Co-Existence
• Free Repatriation of Profits, Dividends and Loyalties
o Beneficiary to the COMESA and SADC Trade
Protocols
o Beneficiary to the EU’s Everything But Arms (EBA)
o AGOA beneficiary
o Beneficiary to the India, China, Canada, Japan
Preferential Markets
o Duty free, quota free and preferential bilateral trade
arrangements with a number of countries, among
them Zimbabwe and South Africa
Preferential Market Arrangements
Security of Investment
oConstitution of Malawi guarantees protection of foreign investors
oMalawi is a member of the Multilateral Investment Guarantee Agency (MIGA)
oMalawi is a signatory to the international centre for settlement of investment disputes
oMember of the Africa Trade Insurance Agency of COMESA
Malawi is open for business!
Contact us
Malawi Investment and Trade Centre (MITC)
P/ Bag 302
Capital City
Lilongwe 3.MALAWI
Tel: + 2651770800
Fax: +265 1771781
Email: [email protected]
www.malawi-invest.net