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China cautions Malawi on Foreign Direct Investments

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An expert in overseas investment and economic cooperation in the People’s Republic of China has said it will be difficult for Malawi to attract meaningful Foreign Direct Investment (FDIs) if challenges impeding on doing business are not addressed quickly.

The expert, who works as a Director at the Chinese Academy of International Trade and Economic Cooperation, Liang Guining, has identified water and electricity shortages as some of the top challenges eroding investor confidence.

Liang made the observations during a presentation made to over 60 delegates from developing countries attending a conference on machinery and electronics underway in Being, China.

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Liang noted that while Malawi has the potential to attract investors due to a wide market with its neighbours, it is failing to attract big investors because of poor road network, electricity and water supply problems.

“Malawi has a good market which investors can take advantage of but for rapid economic growth, you need to address the three challenges, which your government is working on. Once these challenges are addressed, you will see more investors coming in to provide the much needed FDIs,” he said.

Liang said policies and incentives are key to attracting big investors that will bring change to an economy and not just for the company to make profits and not benefit the local communities.

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“Before approving any investment, you need to do a feasibility study on the company and check its capabilities in terms of production and capital investment. By doing that, you will be able to attract serious and big investors,” Liang said.

He also said encouraging joint ventures can help Malawi to grow her economy faster. Liang said while most local companies do not have enough capital to enter into a joint venture, locals can use infrastructure as capital.

“The local investor should provide buildings while the foreign company should bring in the capital and technology,” he said.

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