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Malawi 2018/19 Global Competitiveness Report Brief

 

Malawi ranks 129th on the Global Competitiveness Index (GCI)

Malawi ranked 129 out of 140 countries according to the Global Competitiveness report released by the World Economic Forum released on 17th October 2018. This means that Malawi is the 11th least competitive country in the world.

Table 1: Top and Bottom Ten Global GCI ranking

Top Ten

Bottom Ten

Global ranking

Name of Country

Global ranking

Name of Country

1

United States of America

140

Chad

2

Singapore

139

Yemen

3

Germany

138

Haiti

4

Switzerland

137

Angola

5

Japan

136

Burundi

6

Netherlands

135

Congo Democratic Rep.

7

Hong Kong SAR

134

Sierra Leone

8

United Kingdom

133

Mozambique

9

Sweden

134

Liberia

10

Denmark

135

Mauritius

Source: The 2018-19 Global Competitiveness Report

Malawi’s Overall Performance

The country’s economy ranked 129 from 132 recorded in the previous 2017/18 Global competitiveness with health scoring the lowest at (131/140) followed by Infrastructure (129/140), ICT adoption and Macro-economic stability at (128/140).

Malawi has experienced a 1.8 growth in competitiveness which is shown in the figure below which depicts the trend of the economy’s competitiveness over a period of six years. The country’s competitiveness has fluctuated around the ten bottom countries included in the GCI owing to Malawi’s struggle in improving major economic indicators that contribute to the competitiveness of a country. As shown in the figure, Malawi’s score adopted a declining trend from 2012 to 2016 where it remained stagnant until 2018 where it has grown from 3.1 to 4.9 and this is a positive indicator on the performance of the economy.

Table 2: Malawi’s Yearly Rank on the GCI

Year

2012/13

2013/14

2014/15

2015/16

2016/17      

2017/18

2018/19

Rank

129/144

136/148

132/144

135/140

134/138

132/137

129/140

Score

3.4

3.3

3.2

3.2

3.1

3.1

4.9

Source: 2018-19 Global Competitive Report

Malawi’s Performance by Pillar

The report covers 12 essential pillars which are Institutions, Infrastructure, ICT adoption, Macroeconomic stability, Product market, Labour market, Financial system, Market size, Health, Skills, Business dynamism and Innovation capability. For Malawi, the table below shows how each of the pillars have performed over the past 4 years.

Table 3: Performance of Pillars

Competitiveness Pillars

            

2018-19 (Out of 140 Countries)

2017-18 (Out of 137 Countries)

2016-17 (Outof 138 Countries)

2015-16 (out of 140 countries)

2014-15 (out of 144 countries)

Overall Ranking

129

132

134

135

132

Institutions

103

96

94

92

77

Infrastructure

129

131

135

133

135

ICT Adopted

128

125

122

121

108

Macroeconomic Environment

128

136

137

140

144

Health

131

115

120

121

123

Skills

127

128

131

133

132

Product market

116

121

119

117

108

Labour market

76

45

38

29

28

Financial system

123

102

115

100

79

Market size

127

122

125

127

123

Business dynamics

127

125

122

121

108

Innovation

112

124

120

121

115

Source: The 2014-15 to 2018-19 Global Competitiveness Reports

Ranking at 131, the country’s health sector plays a huge role in contributing to the lack of competitiveness of the economy. Malawi lacks health facilities furnished with basic equipment for treatment of patients. Most health facilities also lack availability of medicine and are short staffed which presents difficult if treating diseases.

For a country to perform well in production, it requires a readily available labor force that is efficient and produces quality products. Although the report ranks the county’s labor force as the best out of the twelve pillars, health plays a major role in the quality of labor force because productivity is affected by the quality of the labor force.

Malawi has been going under the process of transforming its economy into an Industrial economy through value adding to agricultural products. This transformation will require a lot of foreign and domestic investments into factories which is an area that is labor intensive. The fact that Malawi’s health sector scored the lowest is a bad indicator for most investors into the manufacturing industry because it signals a labor force that is of bad quality which is a threat to productivity.

Regional Performance; Sub-Saharan Africa

In this region, Mauritius is the top performing sub-Saharan country at number 49 followed by South Africa at number 67 followed by Seychelles at number 74. At the bottom, the least competitive country is Chad at number 40 followed by Angola at number 137 then Burundi at number 136.

Mauritius has maintained the number 1 position since the 2017-18 report even though its global ranking has fallen from 45 to 49. This indicates that on a regional level, the economy is doing well in improving their business environment. Their product market takes the top rank at 19 which is attributed with increasing competitiveness in services, low prevalence of non-tariff barriers, low trade tariffs and service trade openness. Financial system ranked 25 owing to availability of venture capital availability, low domestic credit to private sector, availability of SME financing, low occurrence of non-performing loans and good bank’s regulatory capital ratio which are crucial factors that enable the growth of private sector.

Although Malawi is in the bottom ten countries, it is important to note its significant 3 step move upwards from the 2017-18 report. For the Malawian economy to be more competitive, there is need to take notes from Mauritius and improve our product market by minimizing non-tariff barriers, reforming trade tariffs and removing distortive effects of taxes and subsidies. The financial system can also be improved as it is currently faced with very high Domestic credit to private sector, lack of venture capital availability and SME financing and persistent occurrence of Non-performing loans.

Table: 4 Top and Bottom sub-Saharan GCI Rank

Top Ten

Bottom Ten

Global ranking

Name of Country

Global ranking

Name of Country

49

Mauritius

140

Chad

67

South Africa

137

Angola

74

Seychelles

136

Burundi

90

Botswana

135

Congo Democratic Rep

93

Kenya

134

Sierra Leone

100

Namibia

133

Mozambique

106

Ghana

132

Liberia

108

Rwanda

131

Mauritania

111

Cape Verde

130

Lesotho

113

Senegal

129

Malawi

Source: 2018-19 Global Competitive Report

With the top performing countries in the region, the following countries have made significant improvements in their ranking; Seychelles moved from 107 to 74 and Ghana from 111 to 106.

In the bottom ten, Chad ranked as the least competitive country in the region at 140 followed by Angola at 137 and Burundi at 136. Mozambique has made a significant move from ranking as the least competitive country in 2017-18 to ranking number 133 and this can be attributed to improved market size and business dynamics. Liberia has also shifted from ranking as the third least competitive country at to number 132 which is highly attributed to improved business dynamics and labor market.

The aim of the GCI is to identify challenges to be addressed and strengths economies can build on through economic growth strategies. The report also works as a source of information for individuals and companies that are interested in expanding business ventures globally.

The Malawi Confederation of Chambers of Commerce and Industry will use results of the Global Competitiveness Report alongside those from Malawi Business Climate Survey and World Bank Doing Business to lobby for improved business climate in Malawi. Businesses are encouraged to take part in these surveys to inform policy making.

The full report can be obtained at https://www.weforum.org/reports/the-global-competitiveness-report-2018-2019

Season's Greetings from MCCCI and warmest wishes for the New Year

 

Buy Malawi Strategy organizes a buy local campaign

The Buy Malawi Strategy (BMS) in collaboration with the Ministry of Industry, Trade and Tourism has organized a Buy Local Campaign, across the three regions, targeting companies producing local goods and services to showcase their products and services.

The campaigns will be held in Blantyre at Chichiri Shopping Mall, Lilongwe at Game Complex and Mzuzu at Mzuzu Shoprite Mall from 21 to 22 December starting from 9:00am to 5pm every day.

Buy Malawi members will participate free of charge while non-members SMEs are required to pay K10, 000 and Non-members others K35, 000 per day.

The campaign is part of a series of activities that the BMS secretariat has been conducting to raise awareness of the local products and services.

All interested companies should register before 17th December 2018 by sending an email to This e-mail address is being protected from spambots. You need JavaScript enabled to view it , This e-mail address is being protected from spambots. You need JavaScript enabled to view it or call 09995228510 or 0993707729

Potential business prospects from Zalala Festival

The recently held Zalala Beach Festival and Trade Fair, has identified potential business partners and buyers for some Malawian products that were showcased through the Malawi Confederation of Chambers of Commerce and Industry (MCCCI)

Mixing business with pleasure, the 11th Zalala Beach Festival, was held in the Mozambican City of Quelimane off the shores of the Indian Ocean, attracting thousands of revelers and business executives from Mozambique and its neighboring countries.

MCCCI showcased products from: Candlex Limited, Nampak Malawi Limited, and Lilongwe Dairy (2001) Limited while exposing Small and Medium Enterprises SMEs to the international showcase.

Speaking on the sidelines, Teras Healthcare, Commercial Director, Ronald Amos hailed MCCCI for exposing SMEs to international opportunities through trade events.

“MCCCI provided the much needed business linkage for Teras during the festival. We have clinched a deal with an agent who will be selling our product. We just need to work on the branding to reflect the ingredients in the Portuguese language,” said Amos.

MCCCI, Head of Business Linkages and Events, Linda Pete expressed gratitude to the companies that provided product samples and encouraged businesses to embrace such opportunities when they come by.

Opportunity for Malawian companies to exhibit at a New York Food Show

The Southern Africa Trade and Investment Hub is supporting a limited number of export-ready specialty food firms from Southern Africa to exhibit at the Summer Fancy Food (SFF) Show 2019 under the Africa Fine Foods Pavilion.

The 65th Summer Fancy Food Show (https://www.specialtyfood.com/shows-events/summer-fancy-food-show/) will take place from Sunday June 23- Tuesday June 25, 2019 at the Jacob Javits Centre, New York, USA.

The show is considered the largest specialty food industry event in North America, and the premier showcase for industry innovation.

The Hub support: covers exhibition space, pavilion build-up, media marketing, pavilion branding, drayage, retail tour, marketing linkages costs, and marketing intelligence seminars.

Exhibitors are expected to cover their own airfare, accommodation and samples freight costs.

Since 2017 the Hub has been increasing its support towards this event, which has seen an increasing number of regional firms generating export sales to the US under AGOA, and to other markets.

The US specialty food sales was estimated at US$140.3 billion in 2017.

 If you are interested and export-ready food company, kindly complete and return the Summer Fancy Food Show 2019 ACTION FORM, by Monday, 10th December 2018 by clicking the link provided above.

Industrial Rebate Operators reminded to renew licences

The Malawi Revenue Authority is reminding Industrial Rebate Scheme operators to renew their licences and obtain Tax Clearance Certificate as provided in the eighth schedule of the Customs and Excise Act.

 Manufacturers under the scheme are required to pay K5, 000 before the first day of January each year.

The Act stipulates that: “At the time of registration and annually thereafter not later than the 1st day of January in each year the manufacturer shall pay to the Commissioner General a fee of K5, 000: Provided that if the manufacturer is registered after the 30th day of June in any year he shall pay a fee of K2, 500 in respect of that year”

 According to the Act, MRA is obliged to revoke registration of any manufacturer which fails to pay or renew its licence.

 “If a registered manufacturer does not pay the annual fee on or before the 1st day of January in any year the registration of such manufacturer shall be cancelled on and from the 1st day of January of that year,”

 Industrial rebate Operators are further informed to obtain a Tax Clearance Certificate and prepare for an inspection instituted by the Commissioner General to assess if materials entered under rebate are used.

 MRA, Commissioner General may also at any time cancel the registration of a manufacturer if satisfied that conditions of the bond are not adhered to.

 

 

Kapondamgaga elected COMESA Business Council Board Member

 President of the Malawi Confederation of Chambers of Commerce and Industry, Prince Kapondamgaga has been elected COMESA Business Council (CBC) Board Member at a meeting held in Lusaka, Zambia. The Board which will be chaired by Mauritius Chamber of Commerce and Industry President, also elected at the same meeting, will serve from 2018-2020. The meeting also elected Sudan Union of Chambers of Commerce and Kenya Association of Manufacturers as first and second vice chairperson. Other Board members are Ethiopia, Zimbabwe, Rwanda and Seychelles. CBC is a private sector organization in Africa that promotes competitive and interconnected industries to actively participate in regional and global markets through advocacy, business facilitation and enterprise development.

Exporters to the EU migrates to REX self-certifying system

Exporters to the European Union (EU), Norway and Switzerland will effective 1st January 2019 migrate to the electronic self-certifying of exports called Registered Exporters System (REX) This means that the GSP Certificate of Origin, form A, will cease to be accepted for exporters to the EU. Malawi set 1st January 2019 as a date for transition to migrate to the REX system which is expected to be completed on June 30, 2019. Exporters will be required to register under REX to acquire a REX registration number to use for self-certifying their exports. Exporters are encouraged to complete the online REX pre-application by following the link https://customs.ec.europa.eu/rex-pa-ui/#/create-preapplication/. Once the Online form is completed, exporters are requested to print a copy and submit to the Competent Authority (CA), Malawi Revenue Authority (MRA) Export division who will assign them REX Registration number. Exporters are advised to use MW followed by Tax Payer Identification Number (TPIN) for the TIN to read MWTPIN e.g. MW20120565. Contact MCCCI if you encounter problems.

Canada Trade Commissioner Service holds talks with MCCCI

The Canadian Trade Commissioner Service, on Wednesday held talks with the Malawi Confederation of   Chambers of Commerce and Industry.

The aim of the meeting was for the service to learn how Canada could advance its interests in the market and look at the areas of opportunities for business as well as understand the business environment in Malawi.

Regional Senior Trade Commissioner for Angola,Botswana, Eswatini, Malawi, Mozambique and Zimbabwe, Angela Dark said the Trade Commissioner Service aims at promoting business and partnerships between Canada and other countries particularly in innovation, Science and Technology and global values chains.

She said most Canadian companies will be interested to invest in agri-business and mining sectors in Malawi

 

Malawi Agricultural Industrial Investment Corporation to be launched

The Ministry of Finance, Economic Planning and Development in conjunction with CDH Investment Bank will on 28 November 2018, launch the Malawi Agricultural and Industrial Investment Corporation PLC.

Malawi Agricultural and Industrial Investment Corporation PLC (MAIIC) is a new private sector led development finance entity established to spearhead industrialization in Malawi.

MAIIC will open its doors to people, businesses, companies, agricultural cooperatives with bankable business projects seeking finance and technical skills to kick start or expand their businesses.

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