|
Malawi has scored poorly in the World Economic Forum’s Global Competitiveness Report which has rated 102 countries in the world in terms of business and macroeconomic climate.
In their response to the 2004/05 Executive Opinion Survey questionnaires, local business executives mentioned access to financing, inadequate infrastructure including roads and telecommunications, inflation, tax rates and inefficient bureaucracy as the five most problematic factors for doing business in the country.
The report, covering the period 2004 to 2005, shows that Malawi has slipped from position 76 to 87 on the Growth Competitiveness Index (GCI) and dropped from 72 in the 2003-2004 survey to 84 in the latest one on the Business Competitiveness Index (BCI).
On the Macroeconomic Environment Index (MEI), the country has dropped from 98 to 100 in the latest survey whose copy Nation Business Review accessed from the Malawi Investment Promotion Agency (Mipa) Business Information Centre in Blantyre.
The report is based on a survey of 7,300 business leaders worldwide who responded to questionnaires on the Executive Opinion Survey which captures perceptions and observations of business leaders in a given country.
The GCI, according to the report, mainly analyses the potential for the world’s economies to attain sustained economic growth over the medium and long term.
Finland is ranked first on the GCI followed by the United States, Sweden and Denmark in that order based on scores in the GCI’s three main sub-components: the Macroeconomic Environment Index, the Public Institutions Index and the Technology Index.
The report says a country’s overall performance is weakened by the quality of its public institutions and Finland scored well in all areas while United States trailed second because of varying levels of achievement in the different components.
The BCI, on the other hand, is based on a conceptual framework and statistical approach which follows that of the previous reports and its findings are comparable with previous Microeconomic Competitiveness Index.
In the Macroeconomic Environment Survey which tackles issues like national savings rate, interest rate spread, recession expectations and inflation, among others, Malawi is one place behind Zambia which is ranked 97 and three above Zimbabwe on position 102.
In a covering letter for Executive Opinion Survey questionnaires for the 2005-2006 survey, Mipa acting deputy general manager Alick Sukasuka said Malawi’s performance in the past year has not been satisfactory.
Findings of the survey have come about four months after the Malawi Confederation of Chambers of Commerce and Industry (MCCCI), a representative body for the private sector, outlined what it called ‘10 priority issues for improving the investment climate in Malawi.’
In the ‘10 priority issues’, the business community, among other things, said it expects government to respect its own deadlines for tax refunds and making investment incentives clear, transparent and non-discretionary.
The businesses are also demanding that the requirement for 40 percent foreign exchange conversion for exporters be removed.
In 1998, Malawi was ranked third from the bottom as an investment destination in Africa in the Africa Competitiveness Report on countries’ ability to attract investment compiled by the same World Economic Forum and the Havard Group.
Observers have argued that Malawi offers very competitive investment incentives outside Mauritius in the Southern Africa Development Community, for example, but only needs to correct its disincentives to attract investors.
Business executives have mentioned unreliable utilities—water and electricity supply, high transport costs and inconsistent policies on expatriates as some of the investment disincentives.
Major incentives sought by investors, according to observers, include ability to repatriate profits, dividends and capital; stable macroeconomic environment; efficient policies that allow employment of labour of an employer’s choice; efficient and reliable telecommunications, electricity and water supply.
Investors also look for competitive and efficient services demanded by companies such as accounting firms, transport and legal services.
|
