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Business confidence improves in 2017

The Business Confidence Index (BCI) compiled by the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has revealed that business confidence among the country’s industry players improved in 2017.
According to the MCCCI’s Malawi Business Climate Survey, business confidence was seen at 67 percent in 2017, up from 58.5 percent in 2016.
BCI is a qualitative index of scores of enterprises’ assessment of current as well as future expectations of business climate indicators.
The indicators for measuring business confidence include current performance, expected business performance, employment outlook and investment outlook.
Opinions are compared to a ‘normal state’ which is a base year.
The chamber said an index value above that recorded the previous year shows an improvement in the perceived confidence whilst a decline implies a perceived decline in the confidence.
“However, the BCI score of below 100 percent shows that confidence levels are low. It is desirable that the BCI score should be in excess of 100 percent from year to year.
“The expected business performance and outlook are used to estimate business confidence in the economy,” reads the MBCS in part.
The chamber adds that the BCI helps to understand the overview of the state of the economy.
The BCI comes hot on the heels of the investment climate assessment (ICA) conducted by the World Bank, which revealed that the country’s climate remains challenging for investors.
The ICA revealed that three major obstacles— namely access to finance, unreliable power and corruption—continue to trouble investors and affect the investment climate.
“The effects of limited access to finance are quite far-reaching, and felt more severely by Malawian-owned local firms, especially those that are rural-based, female headed, domestic market oriented, small scale and those engaging in the service industries.
“The high collateral requirements from commercial banks deter investment, especially by the small and the medium enterprises (representing the majority of enterprises in Malawi), resulting in heavy reliance on internal resources for financing investments, other than from the formal banking system,” the ICA says.

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