By Kingsley Jassi:
Outbound investments have been increasing over the past four years, surging to K80 billion in 2023, the Reserve Bank of Malawi’s Financial and Economic report indicates.
But experts have urged authorities to take a look at the kind of investments people are making and further check if they bring any remittances back home to support the economy.
On the balance of payment summery in the report, a look at the investment flows in and outside the country shows that there was an increase of the investment abroad from K55.7 billion in 2022 to K80.3 billion in 2023.
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This sharp increase over the few years comes from a K512 million outflow in 2021 and a negative K133 billion in 2020, according to the summery.
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Economist Lesley Mkandawire said while it was commendable to see more Malawians investing abroad, it is the nature of investments that matters.
“Investing outside the country can bring forex if there are remittances of profits.
“However, that depends on the type of investment and this trend should awaken the authorities to see what is happening and what type of investments these are,” Mkandawire said.
He cited capital flight as a possible risk, where people simply externalise money and make the country lose out.
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Mkandawire has since urged the authorities to rework the remittances policy and ensure that those investing outside the country and Malawians in the diaspora do not lose anything when they make remittances to Malawi.
In recent years, the country’s financial sector has seen local banks buying stakes in foreign banks, a trend that may be contributing to the development.
National Bank of Malawi, FMB Capital holdings are among local banks that have recently acquired stakes in foreign banks, as FDH Bank is further poised to acquire controlling stakes in an undisclosed bank outside the country.
During the same period, investment inflows have grown from K188 billion in 2020 to K235.6 billion in 2023, registering steady annual growth over the period.
