Anti-Bakili Muluzi / MALAWI POLITICS TODAY

Malawi Business Climate Good
The Chronicle Newspaper (Lilongwe)

March 13, 2006
Charles Chisi
Lilongwe

The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) says it expects businesses to perform better this year than last year due to improvements in fiscal management by government.
MCCCI Chief Executive, Chancellor Alison Kaferapanjira said this in his 2005 Malawi Business Climate Survey results presentation during the regional chapter meeting held at Capital Hotel in Lilongwe on Tuesday "Both current and expected business performance is encouraging this year unlike last year because of improved fiscal management which has been spiced up by the fight against corruption. This does not only win investors' confidence but is also a catalyst for economic growth," said Kaferapanjira.
Kaferapanjira said from the survey conducted between July and November, over 70% of the respondents of their questionnaires indicated that businesses would be good.
He said businesses from the textiles, garments and footwear; and food-processing sub-sectors are the most optimistic ones when it comes to the expected performance this year. "The optimism in the food-processing sub-sector could be a result of the prospects for a good agriculture season, which will ensure supply of raw materials," he said He, however, said pharmaceuticals, paints and soaps sub-sector are the least optimistic in terms of their expected performance this year with less than 50% of the respondents indicating between good and very good.
He attributed this to the unfair competition in the market arising from counterfeit products, imported substandard products and smuggled products.
Kaferapanjira, nonetheless, said the signing of the Malawi-Mozambique bilateral trade agreement will enable the sector to record highest export revenues than any other sector as some of the exports would go to Mozambique.
However, Kaferapanjira bemoaned exchange rate fluctuation, which he described as an obstacle to maintain a healthy business in the country. "While there is an improvement in the rating in most of the areas, the environment is still not conducive to doing business as indicated by the proportion of respondents. Kwacha depreciation is still viewed as a major threat to the maintenance of healthy businesses in the country," he said.
He said a solution to this is for the government to increase imports to enable forex inflow, which is a cushion for Kwacha stability as contained in its vision of transforming the nation from a predominantly importing and consuming nation into a producing one.

In its 2005 Malawi economic performance report, MCCCI said the meager 1.9% GDP growth rate achieved last year is because of the decline in Agriculture, which forms the backbone of the country's economy.