Foreign exchange and fuel scarcity, high taxes, exchange rate volatility and high cost of electricity are among major factors that stifled the manufacturing sector’s growth in 2023, the Malawi Confederation of Chambers of Commerce and Industry has said.
MCCCI chairperson of the manufacturing sector Godwin Ng’oma said the sector is operating below its capacity due to the challenges.
“The government should come up with a Special Purpose Vehicle (SPV) or an Industrial Development Fund to provide patient capital, specifically targeting investments in manufacturing.
“The government should [also] provide tax incentives to manufacturing and agro-processing industries that use at least 70 percent of raw materials sourced locally in their production,” Ng’oma said.
But Minister of Finance Simplex Chithyola Banda said the government was already implementing policies that will propel industrialisation aspirations.
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“We are enforcing import substitution. The more they [manufacturers] produce using locally available resources, the more they increase their production capacity,” Chithyola Banda said.
A recent Financial and Economic Review published by the Reserve Bank of Malawi shows that the manufacturing sector is poised to grow by 4.4 percent in 2024.
In 2023, the growth forecast was adjusted down to 0.4 percent from an earlier estimate of one percent.
In a recent interview, Economics Association of Malawi Vice President Bertha Bangara Chikadza said Malawi needs to understand the essence of creating a competitive edge for the local industry.
