‘Political will key to industrialisation’



Investment management and advisory firm, Alliance Capital Limited, has said Malawi needs political will to ensure that it achieves industrialisation which is crucial in the economic transformation process.

The observation comes as Malawi continues to struggle to industrialise despite harbouring an ambitious dream of transforming the economy from a predominantly importing and consuming country to a predominantly producing and exporting one.


In its weekly economic commentary released yesterday, Alliance Capital Limited says government must show and commit enough political and economic will to ensure that meaningful policy efforts are being undertaken that would enable sectors to create synergies for a strong and sustained industrialisation process.

It says industrialisation has several advantages, especially in the long run, such as economic diversification, unemployment reduction, and technology transfer and welfare improvement.

The firm says industrialisation accords an economy not only levels of productivity that are higher compared to those of other less industrialised economies but also greater capacity to absorb labor force.


It adds that industrialisation provides a strong platform on which further technological progress is achieved.

Alliance Capital, however, notes that, for industrialisation to take place, there are certain elements that have to be set in place first.

“For Malawi, the dynamics behind a successful and sustained industrialisation are somewhat linear. We cannot talk about meaningful industrialisation if we ignore the agricultural sector keeping in mind that almost 80 percent of the population’s livelihood is perched on agriculture. This is so because there is a significant positive relationship between manufacturing expansion and domestic demand.

“In others words, as incomes per capita rise, share of manufacturing in national income increases. Improvements in agricultural productivity and marketing will therefore boost people’s income and stimulate domestic demand which is a very strong catalyst for industrialisation,” reads part of the commentary.

Speaking at the start of the 2014 Malawi International Trade Fair, the then Malawi Confederation of Chambers of Commerce and Industry president, Newton Kambala, proposed that the Stat e should lead the way in the industrialisation drive.

Kambala said government could deliberately set up firms in the manufacturing sector which could later be privatised.

The 2018 Annual Economic Report says manufacturing almost grinded to a halt last year, growing by 1.8 percent due to persistent power outages.

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