Private sector players under the banner of the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) expect a better performance in 2024 than in 2023 due to stability of electricity supply, availability of foreign currency, and the confidence that an inflow of Foreign Direct Investment (FDI) will follow as a result of the Extended Credit Facility (ECF) with the International Monetary Fund and budgetary support from the World Bank.
This is contained in the recent Malawi Business Climate Survey 2023 conducted and published by the MCCCI.
It further indicates that in 2024, 58.2 percent of businesses expect to increase their employment levels, while 8.2 percent plan to reduce their employment levels.
“For most businesses, 2024 holds a better outlook for their business compared to 2023. Approximately, 77.3 percent of businesses are projected to increase their levels of investments in 2024. In 2023, 50.8 percent of the businesses increased their investment levels, while 17.1 percent decreased their levels of investments.
- Advertisement -
“It is expected that in 2024, 58.8 percent of the businesses will be able to utilize 76 to 100 percent of their capacity with the expectation that foreign exchange will be available on the market. In the year 2023, 16.1 percent of the businesses decreased their capital expenditure, compared to 13.2 percent in 2022. In 2024, only 5.8 percent of businesses are expected to decrease their capital expenditure,” the survey reads.
- Advertisement -
It adds that there was marginal improvement in capital expenditure with 64.2 percent of the businesses increasing their capital expenditure in 2023, compared to 56.1 percent in 2022 whereas in 2024, 78.1 percent of businesses plan to increase their capital expenditure.
Speaking on the sideline of a stakeholder meeting for Illovo Sugar Malawi, MCCCI president who is also the company’s Managing Director said looking at the weather pattern suggestions are that there will be normal levels of rainfall which will improve total agriculture production, among other things.
“When you look at inflationary pressures, reading publications from the Reserve Bank of Malawi (RBM) we are at or close to peak point before it starts decelerating so we hope that would be better and if you look at the exchange losses this time last year, they were substantial.
“…Much bigger gaps between the official rate and the parallel market rates. Even the rates in the bureau the gap were more than 50 percent back then but now, bureaus are selling around K2,000 against the official rate of K1,700 so even if there was to be another depreciation of the kwacha it would not be anywhere near the 64 percent that we have seen in the last one year,” Katandula said.
- Advertisement -
In an interview, Telekom Networks Malawi (TNM) plc Chief Executive Officer Michel Hebert said the company was heavily affected by the 44 percent devaluation which wiped out its profit in November and had to start over in December 2023.
“January results are looking quite positive and in February we are on a good track so we will have to wait for the next announcements, but I believe that we will remain profitable. We have learnt from 2023’s massive devaluation so since then we have taken steps to reduce our risk and exposure to foreign currency. For example, we are lowering our foreign debt, we are trying to source more things locally and of course cutting costs in many areas. Should another devaluation happen, we will be better to handle it,” Hebert said.
