One of the local entrepreneurs, Thomas Njilika of Thompex Group, has applauded the government through the Reserve Bank of Malawi (RBM) for reducing interest rates in the country. He is optimistic that the move would help companies to get back on their feet.
Speaking in an interview, Njilika, who has expanded his business into cooking oil manufacturing, said the past years have been tough for businesses in the country.
He said most businesses, especially small scale, have collapsed due to high interest rates offered by commercial banks which raised the cost of borrowing.
“The cost of borrowing has been too high for most business resulting in negative effects to their operations. There was no profit margin, because whatever was earned went straight to the banks to repay the loans,” he said.
Njilika said with the reduction of the interest rates, most businesses have breathed a sigh of relief.
He said with the new rates, business will now be able to make marginal profits, thereby increasing their production.
“The government has done well on the interest rates and we would like to see more of this if we have to grow our economy. The lower the interest rates, the more businesses will revive. With more businesses, it means our youths will be able to secure jobs and contribute positively to the country’s economic growth,” said Njilika.
He further said that Malawi continues to lose out in the agriculture sector as most produce is exported raw.
Njilika said manufacturing companies should strive to use local raw materials in their production.
“We need to promote our local farmers by paying them better prices for their produce. As producers we should also strive to value add the produce so that it fetches better prices when it goes on the market,” he said.
Njilika also urg ed the government, to monitor local producers and guide them on how best they can produce quality products that can compete effectively on the market.