By Kingsley Jassi and Benadetta Chiwanda Mia:
The Treasury has said its hope for real industrial and revenue growth lies in the newly re-established Malawi Development Corporation (MDC) through which the government will champion state-led industrialisation.
MDC used to be the strut of Malawi’s industrial base, owning several investment ventures across industries before losing this profile through the privatisation policy under the structural adjustment agenda pushed by the International Monetary Fund (IMF).
Historical records show that most companies under MDC were already struggling and had become a burden on the Treasury through bailouts beginning from the 1980s when the economy started to show signs of stress, hence the privatisation call which came to full force in the mid-1990s.
- Advertisement -
However, the private sector has been slow to take up the mantle and champion the much needed industrialisation as the economy suffers structural imbalances with a weakening production base.
- Advertisement -
This has, apparently, prompted the government to re-establish the MDC and set up Malawi Mining Corporation (Mamico), among other investment vehicles, to invest in key industries.
Treasury spokesperson Williams Banda said the government expects this as a medium to long-term revenue mobilisation strategy that will involve direct investment in key sectors while improving operational efficiency of existing state owned enterprises.
“We anticipate progress in revenue performance. MDC Holdings was created for this industrialisation drive,” Banda briefly said.
Banda added that MDC is now fully re-established but could not give more details.
- Advertisement -
The SOE sector is believed to have potential to contribute heavily in revenue growth and industrial transformation but is marred by efficiency challenges that limit performance.
A recent IMF statement after Article IV consultations called for transparency in the SOEs operations, noting their potential to revenue.
“The public procurement process and SOE operations would benefit from greater transparency and less discretionary decision-making,” the IMF stated.
Meanwhile, the Treasury recently projected SOEs profitability to surge to K106 billion in 2026 from K39 billion
As of this year, the government owns 77 parastatals and 33 are commercial, 36 are sub-vented while eight are semi sub-vented, operating in trading, services and regulation.
According to a performance report total assets will increase to K4.8 trillion in 2026 from K4.2 trillion registered in the year to March, 2025.
Total revenue is expected to increase by K1 trillion to K2.7 trillion while liabilities will grow from K2.9 trillion to K3.3 trillion.
Meanwhile, MDC interim board is expected to meet to finalise the composition of a permanent board, marking a major step in its full operationalisation.
Secretary to the Treasury Betchani Tcheleni confirmed the development in an interview over the weekend.
Tcheleni said the soon-to-be-appointed board will take over the recruitment of a full executive management team to steer the corporation into its next phase.
Economist Alick Nyasulu cautioned that MDC’s success hinges on how well it is governed.
