As the Tonse government begins its reign to usher Malawi to new levels of development, one area that is geared to push fulfilment of the popular manifesto pledge of 1 million jobs is the potential influx of foreign direct investments.
Malawi has struggled to attract investors in the past five years, a situation which has had a hit of the country's economy. The diaspora Malawians whose role in Malawi economy has mainly been in their remittance have been identified as a key group in unlocking trade and investment for Malawi.
According to Chalo Mvula, a UK-based Malawian FDI expert, who is also the spokesperson of Malawi Congress Party Diaspora Wing, the onse alliance government has its work of attracting investors cut out as it has a lot of active people in the diaspora who will play an instrumental role in the government endeavours.
"We are talking of a huge network of Malawians in diaspora, well-educated and possessing a variety of skills who are focused on seeing Malawi develop," he pointed out.
A foreign direct investment (FDI) is an investment made by a firm or individual in one country into business interests located in another country. The current state of Malawi FDI leaves a lot to be desired despite government efforts to attract more investors.
Malawi remains one of the world's poorest countries. GDP growth fell from 7.8% in 2019 to 6.4% in 2019, according to the World Bank. The organisation's data also shows headline inflation has continued in single digit standing at 9.3% in July 2019 compared to 9.0% in July 2018. FDI plummeting from $598m in 2017 to $112m in 2019.
Malawi has also faced problems of its own making such as the rampant levels of corruption and government failure to tackle the problem head on which has been a deterrent for potential investors.
Mvula suggests, the involvement of the diaspora is the key catalyst that can bypass several hurdles to get investors flowing in Malawi again.
"Firstly let's not ignore the fact that those in diaspora themselves are potential investors, so we have a group of people who can provide the investment but also help attract other investors."
He argues that Tonse government need to quickly realise that above the well-known role as senders of remittances, Malawians in the diasporas can also promote trade and foreign direct investment, create businesses and spur entrepreneurship, as well as transferring of new knowledge and skills.
The Diaspora facilitates acquisition and exchange of technical knowhow, market information and physical capital, and should there be considered as social capital.
Malawi boasts several opportunities for FDI with Agriculture and tourism being on top of the list.
"We have the land for agriculture and all we need is to diversify the crops, create added value while promoting use of proper machinery and irrigation, and we can see agribusiness both countering droughts and rewarding investors," added Mvula.
Mvula believes Malawians in diaspora have connections with potential investors using their networks.
He argues that some Malawians have lived abroad long enough to establish business relationships with would be potential investors and Tonse government would benefit tapping into this advantage.
Mvula said the government should have the diaspora in their plans as they already act as brand ambassadors for Malawi and called on Ministers to identify the goals that need to be achieved, map out the location and skills of those in diaspora, work on fostering a relationship of trust, maintaining sophisticated means of communication with the diaspora, and more importantly encouraging diaspora contributions to national development.
Malawi provides good conditions for the enablement of FDI attraction. The country has been one of the most peaceful countries in Africa. The government has tried putting incentives that are tailored to every potential investor.
Malawi has also improved its standing in the World Bank's Ease of Doing Business index, jumping from position 133 in 2016 to 109 in 2020.
Among other areas of potential investments are the natural resources with Malawi having large uranium and coal deposits. There is also Lake Malawi which hasn't been explored fully of its potential for minerals. The country also provides great opportunities for investment in ICT due to the growing use of mobile and internet services.