MCCCI bashes Reserve Bank
The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) yesterday did not mince words in exposing weaknesses in Reserve Bank of Malawi policies describing them as responsible for the stagnation of the country’s development and economic growth.
MCCCI, which is the mastermind of the country’s annual trade fair events, told President Peter Mutharika and other international dignitaries present during the official opening of this year’s event that companies in the country are failing to grow mainly due to narrowed down policies on reduction of inflation that the central bank implements under the dictatorship of the International Monetary Fund (IMF) and the World Bank.
MCCCI’s Vice President Arthur Chirwa said, in his hard-hitting speech, that Malawi is now left with a few manufacturing companies after most of them closed due to financial challenges emanating from high policy rate offered by the central bank which tends to retard growth of business due to accumulated arrears in the interest rates.
“We are from time to time told that if we fight inflation everything is going to fall into place, however, since we started implementing austerity measures in the late 80s, we still have not arrived” said Chirwa.
He further said the central bank misses the fact that concentration on fighting inflation actually kills the manufacturing industry that would otherwise produce the goods that would then reduce the pressure on prices.
Chirwa said it was not possible for a company involved in manufacturing to borrow money at an interest rate which is in excess of 40 percent and expect to make a return.
“By the time the business starts generating profits, it is already technically bankrupt due to accumulation of arrears in interest payments,” he said.
Chirwa also said there is a disconnection between what the RBM advocates for and what the country needs in terms of industrialisation and industrial growth. He described the situation as retrogressive bearing in mind that other countries in the region are benefitting and progressing through regional integration.
Chirwa therefore said Malawi can resolve the said challenges on its own as no external powers will develop the country.
“The solutions have got to come from us and not be imported from countries where the environment is different, our people trekked to South Africa and all over the world because we failed to fend for them,” he hinted
During the meeting, President Peter Mutharika renewed government’s commitment to facilitate the annual trade fairs saying it is through such forum that Malawi sells itself to potential investors.
“I urge all Malawians to take this event seriously and urge public officers in government to provide necessary support to participants in such events,” said Mutharika.
He also encouraged local companies to create business linkages with the country’s small and medium entrepreneurs (SMEs) by either buying their products or entering into smart partnerships in order to promote their growth.
He said his government has noted that for the private sector to thrive there is need for a proper business environment and support services to attract financing, capital, networks and markets as core values chains.
In this year’s event themed: “Achieving Regional Integration Through Trade,” 213 small and medium entrepreneurs SMEs and companies are participating, 37 less than last year’s 250, a development which the chamber attributed to cash flow problems faced by the business community due to high cost of borrowing.
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