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Lack of finance slows engineering ventures

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Sustainable economic growth for any country is premised on many factors. Engineering has been recognised as one such driver of the global economic revolution and engineers are expected to take a leading role to ensure that countries create wealth for the well-being of their citizens.

It follows, therefore, that in Malawi, engineers are not just there to make sure that our cities are beautiful with well-crafted buildings. Engineers need to be innovative and ought to come up with solutions that would address some of the challenges that we are facing.

Water shortages and power outages are some of the issues that engineers are supposed to address with long term and innovative solutions.

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But the sector says lack of financial resources is affecting its ability to come up with solutions to the troubles that we are grappling with.

Malawi Institution of Engineers (MIE) immediate past president Andrew Thawe said there is need for serious reforms in the financial markets to encourage investment and borrowing for the engineering sector.

He said the financial market in the country is not supportive to technological development and entrepreneurship, and investment.

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“More than 50 years after independence, the banks are not ready to share risks with local investors towards new areas. This is an area that needs huge reforms if we are to achieve entrepreneurial and technological development. If we are to curtail importation of toothpicks, money pins, stables, rubber bands and other many demeaning imports,” said Thawe.

He said with the current practice of the financial markets, the risks are just too high for technology developers and entrepreneurs.

“Actually the rates at the banks are too frightening for one to try. Prevailing silent assumptions in financial markets beat engineering ingenuity. How can you borrow K100 million and invest it as K136 Million because of the mega interest rate? How much return should one expect for the K100 million to cover both the assumed K136 million and make profits? How do they explain the mega profits in billions of kwachas in a sick economy?” questioned Thawe.

Thawe further said the current economic situation does not need one to be an economist to conclude that the Malawi economy has taken a negative turn.

He said despite numerous rhetoric to turn Malawi from net consumptive to net productive country, it seems practical strategies are not there.

“The resulting effect is a blame game and finger-pointing between professionals, the private sector, and the government. Economists will tell you that depreciation and inflation are some indicators of the performance of the economy. On the other side the indicators tell us that some activities are not being done or, something that ought not to be done is being done,” he said.

Apart from lack of financial support, the engineers also feel they are being sidelined as big jobs are given to foreign contractors.

The development according to the engineers results in foreign currency being externalized.

Managing director of South Africa based firm, Mdina Engineering Tione Mdina said the problems of infrastructure development need a long term finance solution.

“Generating income for infrastructure projects is a national responsibility and jointly we need to come up with long term solutions on all levels that will generate income for government which in turn will be in a position to fund the necessary projects. For instance development of our lakeshore can tremendously improve tourism and generate money for successful innovation,” he said.

Mdina said as a country, we need to drop a culture of looking for new inventions only and overlook what is applicable and important at a particular point in time.

“What we need in Malawi is the maximization of standards. The other challenge that we have is the transfer of skills from the foreign companies and expatriates. It is ridiculous, that in this day and age, our companies are importing engineering and management skills.

“We need to provide a regulatory framework that supports or even demands knowledge transfer from anyone who does business in Malawi,” he said.

Mdina said Malawian companies and engineers will not be given contracts to build stadiums in other countries if they do not have the opportunity to build stadiums here at home in Malawi.

“We have to encourage growth and innovation at grassroots level. As far as funding is concerned –an engineering design without financial backing is a useless exercise,” said Mdina.

He further said Malawi is one of the few countries in the world where one can just come and start practising engineering.

He said in other countries, only certified or engineers registered by a local engineering body can practice engineering.

“This is the only way that countries can ensure that their own engineers have the necessary competencies,” said Mdina.

Minister of transport Francis Kasaila said the government is setting up a standard whereby 30 percent of local contractors will be given construction works.

Kasaila said the ministry is working hand in hand with the National construction Industry Council (NCIC) on the new policy framework.

“We are working on improving the situation, but you also have to know that some of the jobs are donor funded and there are certain requirements on contractors that have to be met,” said Kasaila.

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