The recent data on foreign dirct investment (FDI) inflows is not good. First, it suggests that the significant increases have been driven by mining and the infrastructure related to it (Nacala rail road) (hence the volatility See Figire below. The country has not been able to attract investment in the vital manufacturing sector.
The Malawi Investment and Trade Centre (MITC), the agency in charge of attracting foreign investment has time and again confused any signs of interest with actual investment and has thus made outlandish claims about the effectiveness of its campaigns. Its claims have been contradicted by data from UNCTAD . This is undermining the credibility of the agency. Investors want one agency they can trust in navigating new territory.
A major mistake of the agency is its focus on transaction costs or on the World Bank "Doing Business" indicators when the real issue is production costs (cost of finance, transport costs, electricity). What investors would like to know are: the precise information on when the dry port at Liwonde will be completed, when exactly will Malawi connect to Mozambique power grid and when are the power plants announced by the government to be completed. This kind of data would have been useful during the recent investment forum.
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The Malawi Investment and Trade Centre (MITC), the agency in charge of attracting foreign investment has time and again confused any signs of interest with actual investment and has thus made outlandish claims about the effectiveness of its campaigns. Its claims have been contradicted by data from UNCTAD . This is undermining the credibility of the agency. Investors want one agency they can trust in navigating new territory.
A major mistake of the agency is its focus on transaction costs or on the World Bank "Doing Business" indicators when the real issue is production costs (cost of finance, transport costs, electricity). What investors would like to know are: the precise information on when the dry port at Liwonde will be completed, when exactly will Malawi connect to Mozambique power grid and when are the power plants announced by the government to be completed. This kind of data would have been useful during the recent investment forum.
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