Economy not reflecting situation on ground—SMEs

Post was last updated: June 25, 2018

Small and Medium Enterprises (SMEs) have lashed out at the government, claiming that despite all the claims of improvements in macro-economic indicators, there is little or nothing to show on the ground.

The government has been talking of stabilising the kwacha, reducing inflation to a single digit and reduction of interest rates within four years.

However, SMEs that spoke to Business Times in Lilongwe, indicate that business has stagnated as interest rates remain on the higher side and consumer buying power remains low.

Ralphs Trading Business Development Director, Sandress Chinjala, said, as SMEs, they struggle to market their products due to lack of finances.

He said this is affecting them, as they cannot afford decent showrooms for showcasing their products.

“The biggest challenge is the economy. Much as we are made to believe that all is rosy but we are still struggling as a country,” Chinjala said.

National Association of Small and Medium Enterprises (Nasme) National Executive Director, William Mwale, said there is need to ensure that SMEs access finances easily if the macro-economic gains are to be reflected in their businesses.

“Business has slowed down but there is room for improvement, the main issue is that those who have borrowed are just working for the bank because they borrowed based on a higher interest rate. Until when government brings down interest rates to between 10 and 15 percent, then will see improvement,” Mwale said.

A recent publication by the World Bank dubbed Malawi Economic Monitor (MEM) indicates that lack of access to finance and energy challenges remain the major challenges affecting performance of the private sector.

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