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Forex scarcity stifles investment projects

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Taz chaponda

The Malawi Agriculture and Industry Investment Corporation (Maiic) has decried shortage of foreign exchange and slow document processing, rating them as challenges derailing financing of some projects.

This follows revelations that 20 projects were approved to receive funding of up to K28.6 billion from Maiic but only 10 have received K2 billion.

In an interview, Maiic Chief Executive Officer Taz Chaponda said some of the big infrastructure projects require foreign currency, which was not readily available.

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“Our disbursement rate is affected by the client’s ability to comply with loan conditions and our inability to access foreign currency for the bigger infrastructure projects. Our initial funding as Maiic was in local currency so we do not have any dollars,” Chaponda said.

He, however, described 2020 as a busy year, saying, due to the co-financing model adopted by the institution, the K2 billion disbursements were magnified to a total of K6.77 billion thus far.

Chaponda said the other funds are from Maiic’s investment partners such as commercial banks and development partners who are also supporting the investments.

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“The disbursed funds have gone towards a diverse group of businesses including a crocodile farm, new hotel, fish feed production, seed production, cassava processing women’s cooperative, dairy processing and a new school, among others.

“Across these new investments, Maiic has already helped to create 700 direct jobs and thousands of indirect jobs along the value-chain,” Chaponda said.

When asked on 2021 outlook, Chaponda was cautious due to the unpredictable trajectory of the Covid pandemic which, he said, has affected all sectors.

Nonetheless, he was quick to say the institution is working with key partners such as the Agriculture Commercialisation Project to provide support to the private sector.

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