The Ministry of Industry and Trade has said it is engaging potential investors from South Africa, India and China for investment in the Special Economic Zones project.
The government plans to establish industrial parks in four sites; Chigumula and Matindi in Blantyre, Area 55 in Lilongwe and Dunduzu in Mzuzu, with the aim of turning Malawi into an industrialised economy.
Once it materialises, the project is earmarked to create about 240,000 jobs.
Minister of Industry and Trade Simplex Chithyola Banda said, already, Africa Export-Import Bank (Afreximbank), a pan- African multilateral trade finance institution, has set aside $950 million as capital investment for two industrial parks.
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“We have also started engaging other financiers from South Africa, India and China who are interested in the projects and that will go towards Chigumula and Dunduzu and other areas we shall identify along the lakeshore,” Banda said.
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In the 2023-24 national budget, the government allocated K4 billion for compensation to people who will be relocated from areas meant for the special economic zones and industrial parks across the country.
But the amount is not enough.
According to Chithyola Banda, for Area 55 site, the government would need between K8 billion and K10 billion while for Matindi, compensation would cost about K4 billion.
“The K4 billion we have received in the budget is to ensure that we get started; so, very soon, we will start compensating them and when the private sector and other investors are coming in, they do so because the government has already committed to addressing the issue,” he said.
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In a separate interview, Malawi Investment and Trade Centre Chief Executive Officer Paul Kwengwere said they are exploring other financing modalities to complement the available resources.
Economist Betchani Tchereni said financing has been the main challenge in rolling out the project.
“Government-led industrialisation is the way to go. In the past I proposed an Industrialisation levy and I am still for that because, in doing so, the government can raise some resources that can assist to establish some strategic industries,” Tchereni said.
The zones would propel creation of industries, job opportunities, increased export of Malawian manufactured goods, expansion of cities and making available land for houses to reduce slums and for businesses in view of Malawi 2063’s industrialisation agenda.
The government already earmarked 624 hectares across three regions to develop the special economic zones which will transform cities and provide jobs through value-addition of export-oriented products and other products that can compete favourably with imports.
Of the earmarked 624 hectares for the zones, the government has 22.7 hectares at Chigumula Industrial Site that would host agro-processing and light manufacturing enterprises including small and medium size firms owned by Malawians.
There is another site located at Matindi with 128 hectares earmarked for manufacturing, agro-processing, chemical and pharmaceuticals, light engineering, mineral processing and construction materials production.
