Financing the vision: Where is the money?
On November 9 2021, Malawi launched the first 10-year Implementation Plan (MIP-1) of the Malawi 2063.
The MIP-1 seeks to take Malawi from the current least developed country status to a lower middle-income economy by 2030. In addition the MIP-1 seeks to help Malawi meet Sustainable Development Goals (SDGs) whose end-line target is 2030.
Lower-middle-income economies have per capita GNIs of between $1,046 and $4,095.
That is to say by 2030, Malawi dreams to be in the league of the likes of Algeria, Angola, Bangladesh, Bolivia, Cameroon, Ghana, Egypt and India.
To reach that stage, the MIP has proposed that Malawi must grow her economy by not less than six percent continuously over the next coming years to 2030.
To achieve this, authorities have qualified the amount of investments needed to realise the MIP- 1 currently pegged at K12.440 trillion spread over the 10-year period from 2021 to 2030.
But where is the money?
The MIP-1 is anchored on the three pillars of MW2063 which are agricultural productivity and commercialisation; industrialisation; and urbanisation.
These pillars are catalysed by seven enablers, namely mindset change; effective governance systems and institutions; enhanced public sector performance; private sector dynamism; human capital development; economic infrastructure; and environmental sustainability.
At the crafting stage of MIP-1, the framers of the plan carefully calculated as to how much each enabler would consume in each of the 10 years up to 2030 for the dream to happen.
For example, in 2021 Malawi needed to spend K802.9 billion on the seven enablers.
Similarly in 2022, about K1.479 trillion was to be spent on the enablers.
This year, the MIP-1 projects that authorities would spend a hooping K2.192 trillion in energizing the enablers.
Of the total spending for 2023, about K999 billion is targeted towards the industrialisation enabler, followed by agriculture productivity and commercialisation at K361.5 billion.
The MIP-1, therefore, aims at improving the share of manufacturing to GDP from 9.1 percent in 2020 to at least 13 percent by 2030. Similarly, the share of mining to GDP will increase from 0.8 percent in 2020 to at least 10 percent in 2030.
But the million dollar question remains, where are the trillions of kwacha for implementing all this?
Public Private Partnership Commission (PPPC) Chief Executive Officer, Patrick Kabambe, believes the plan could be financed through partnerships between the public and private sector.
According to Kabambe, Malawi cannot just build public infrastructure by looking at the national budget, adding that authorities are looking at private sector coming in in form of a partnership arrangement.
Old Mutual Malawi Group Managing Director Edith Jiya says the MIP- 1 could benefit from the ever-growing pension funds, currently hovering above K1 trillion.
She says nations and societies have used pension funds to develop economically.
“From a business point, we also say: How is that making us as a market competitive in terms of whatever we produce,” Jiya said.
She observed that, on the part of private sector players, they need partnerships with the public sector to help them in de-risking some of the projects.
Malawi Investment and Trade Centre (MITC) Chief Executive Officer Paul Kwengwere says the success of MIP-1 needs the involvement of many Malawians in investment and export trade.
He said as a country, Malawi needs to develop a clear-cut avenue of generating capital for businesses.
“Otherwise, progress or success of MIP-1 will be very shadowed,” Kwengwere says.
Ministry of Finance Director of Aid and Trade Nations Msowoya says the first source of financing could be what the country already has in terms of taxes.
He added that ensuring that big international philanthropists find their way into Malawi could also be crucial in financing the MIP-1.
Deputy Director of Revenue in the Ministry of Finance Catherine Chilima said Malawi needs to seriously look at how effectively it is mobilizing revenue and how prudently it is spending the revenue.
Nico Holdings Chief Executive Officer Vizenge Kumwenda believes a stable and conducive environment is key in attracting private sector participation.
According to Kumwenda policy consistency helps to protect private sector investments.
“When you look at creating a conducive environment, for me the starting point is the government. That’s where the power is. And government in that sense is the parent, is the father is everything,” Kumwenda said.
Seasoned banker Misheck Esau warns against suggestions to recreate the Malawi Development Corporation in financing the MIP-1 and Malawi2063.
According to Esau, national Development Finance Institutions have failed in Africa, adding that the success stories are not many.
He said perhaps private sector-led development finance institutions is the way to go.
Furthermore Esau said government has a few success stories in terms of investments and that as a source of funding, government could get rid of some of these initiatives.
Conclusion
But as the sun rises and sets each day, the nearer 2030 comes. One thing remains clear at the end of the day: Malawi does not have a luxury of time.
It is time we make the all-important decisions today so that we make MIP-1 a reality. Otherwise, it may just face the same fate as Vision 2020.
