By William Kumwembe:
Lack of credible entrepreneurs has been cited as a major constraint militating against investment growth in Malawi.
The situation is said to also hinder economic development, wealth creation and poverty reduction efforts.
Nico Group Managing Director, Vizenge Kumwenda, made the observation on Friday during the Institute of Chartered Accountants in Malawi (Icam) dinner held in Blantyre under the theme ‘Challenges and Solutions to Investment in Malawi.’
He also cited economic and political risk, corruption, high cost of borrowing, low technology uptake, underdeveloped infrastructure and lack of expertise among the constraints.
Kumwenda said the constraints are, however, less spoken of or not emphasised.
“This is the lack of an adequate pool of good quality [sic] entrepreneurs that we need to create the investment capacity that this country requires.
“Small and medium enterprises have proven to be a key driver of economic growth in developing countries across the globe, as they play a key role in job creation and wealth generation,” Kumwenda said.
SMEs sector creates between 55 and 70 percent of jobs in Africa.
Kumwemda said it was in this sector that credible entrepreneurs could dominate to form a critical mass.
He said Malawi needs entrepreneurs that know the significance of finance discipline and budget their expenditures within the capacity of their businesses.
“These are entrepreneurs that will spot the numerous business opportunities in our country and exploit them. These are entrepreneurs who will run their business ethically and make profit after having paid all their taxes.
“These are not entrepreneurs who believe they are making profit yet their profit is coming from evading customs, import duties and other taxes,” Kumwenda said.
Commenting, Icam President, Bwighane Mwenelupembe, said, to a greater extent, the country has also been lagging behind in terms of development of investment due to lack of innovation and concerted efforts in most sectors.
He then urged accounting professionals to value partnership and tap from the existing market potential.
“This is an opportunity where we learn a number of critical things; accountants play a significant role and they have the intellectual know—how on a number of areas impacting various aspects of business and the economy. We should, therefore, be able to invest in various sectors and participate on the growth agenda,” he said.