UK investments to Malawi slow

UK investments to Malawi slow

Post was last updated: March 23, 2023

Foreign direct investment (FDI) from the United Kingdom (UK) to Malawi has declined over a three-year period, published data shows.

The UK’s Department for International Trade data indicates that in 2019, FDI to Malawi stood at  £66 million (about K82.6 billion) before declining further to £61 million (about K76.5 billion) in  2020 and £57 million (about K71.5 billion) in 2021.

Economic statistician Alick Nyasulu observed in a written response on Monday that the cost of doing business, among others, has dampened the investment landscape.

He said: “Issues such as constant power cuts, high costs of capital, unreliable transport systems and corrupt practices affect us in terms of investment.

“Unless we deal with these issues and with good leadership that looks beyond election, this trajectory will continue. We should learn from neighbouring countries who within the same region are doing well in terms of infrastructure.”

On his part, Catholic University of Malawi economics lecturer Hopkins Kawaye also observed that a decline in investment is a cost to economy.

He said: “Malawi misses out on economic growth and job creation due to the lower FDI levels.”

On the other hand, the Malawi-UK Trade and Investment  factsheet shows that total trade in goods and services between the UK and Malawi was worth £63 million (about K79 billion) in the three quarters to the end of 2022, an increase of 23.5 percent  from the three quarters to the end of first quarter of 2021.

Meanwhile, the United Nations Conference on Trade and Development  has indicated the outlook for FDI’s in Malawi remains weak.

In its Global Investment Trends Monitor, the UN agency observes that this will be mainly on account of negative or slow growth in many economies across the globe.

But Malawi Investment and Trade Centre chief executive officer Paul Kwengwere is on record as having said they are working towards adapting to new ways of doing investment promotion and advocating for more business reforms to attract quality FDI

FDI is a category of cross-border investment whereby an investor in one country  establishes an a significant degree of influence over an enterprise in another country.

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