Path towards inclusive wealth creation
Malawi’s poverty levels are indescribable, with the World Bank ranking the country among the top 10 of poorest territories on earth.
But Malawi has a dream.
In 2021, the country launched Malawi 2063 (MW2063) a blueprint that aims at making the country an inclusively wealthy and self-reliant nation by the year 2063.
Anchored on three pillars, the country wants to achieve this through agricultural productivity and commercialisation, industrialisation and urbanisation.
The dream has enablers for the pillars to be met and enabler Number Four is the private sector dynamism, which indicates that the country shall have a dynamic and vibrant private sector that effectively delivers on making Malawi an industrialised upper middle-income country within the shortest time possible.
It is against such background that the private sector has been actively scouting on more and more investments to grow the economy and change lives of people.
An example of such initiatives by the private sector is the alternative investment venture which one of the investments, insurance and corporate solutions groups in the country, Old Mutual Malawi, has embarked on.
In 2021, the company invested over $20 million in agriculture through Gala macadamia nuts farm in Lilongwe district and the construction of a girls’ hostel at Kamuzu University of Health Sciences (Kuhes).
The farm spans along the district in the area of Namitete covering over 6,000 hectares and the hostel houses 142 girls at one of the Kuhes campuses in Lilongwe City.
According to Old Mutual Investment Group Managing Director, Mark Mikwamba, they decided to venture into alternative investments because the Malawi Stock Exchange (MSE) cannot consume all the funds since there are few listed companies.
Mikwamba added that the alternative investments are a part of creating worth for everyone because, according to him, for example, 2,000 people have already found the comfort of employment at the farm and investment returns have already hit double digits just in the two years that the investments have been made.
“For MSE to grow, we need to beg new companies to list or help in growing companies that can be able to list therefore it is our role to create companies that can reach at a stature where they can list,” Mikwamba added.
The group has further indicated that it has embarked on feasibility studies to invest in energy, transportation and affordable housing as part of its Alternative Investment drive.
Mikwamba said the company has it on the cards to have solar and hydro power plants and using its infrastructure fund, invest in the transport sector and they are also looking at investing in affordable housing.
He is of the view that these, together with other investments in private equity, will help in financial inclusion for the country and spread wealth to the untapped population.
“By the end of the year, we should be at a very good space to start going into these areas because, as investors, on behalf of our clients we have to do our homework before we enter into these areas and right now we are busy doing that,” Mikwamba said.
Such ventures have been touted as the right and best path towards the realisation of MW2063 blueprint which is being championed by the National Planning Commission (NPC).
NPC Public Relations and Communications Manager Thom Khanje said in an interview that when the country is talking about achieving the vision it does not mean that the responsibility rests in the hands of the government alone but other players that drive the economy.
“The private sector is the biggest player to the vision because the role of the government is mostly just to put an enabling and conducive business environment. Therefore, when the private sector is aligning their investments to the vision, we know it will be achieved,” Khanje said.
Financial market analyst Bond Mtembezeka says no meaningful wealth creation can be achieved without the masses’ participation, especially in the context of Malawi.
Mtembezeka touts the alternative investments venture, saying meaningful wealth creation should look at how an investment will trickle down to the masses or how the masses will participate in it.
“I believe Malawi has so much potential in all sectors and companies need to move away from the typical investments into other sectors as well. I like to consider that the challenges Malawi faces offer opportunities for business and investment.
“There are opportunities in the health sector: pharmaceuticals and world class hospitals. There are opportunities in energy; Malawi is perpetually battered by energy challenges. There are opportunities in the education sector: university accommodation, nice Infrastructure and many more,” he says.
According to the World Bank, over 70 percent of the Malawi population lives below a dollar a day, indicating that that percentage wallows in poverty and only below 30 percent of the population is above the poverty line.
Moping poverty out of the Malawi floor needs concerted efforts and the time has never been good than now when the private sector should up their socks and contribute to the development of the nation.
With only 16 counters on the Malawi stock exchange, companies need to look further where money can be invested and the effects trickle down to the masses on the ground.
Alternative investments, though the new talk of the town, has proven to be the right path towards inclusive wealth creation and realization of the Malawi 2063 blueprint.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.