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Industry discuss economic landscape

Industry captains convened in Mangochi for the two and half days 2024 Business Leaders’ Summit have underscored the need for policy interventions that will assist businesses withstand shocks and build resilience for the nation to register economic progress.

Speaking during the official opening of the Summit at Sunbird Nkopola on Friday, Malawi Confederation of Chambers of Commerce and Industry (MCCCI) president Lekani Katandula observed that prevailing challenges such as climate shocks, macroeconomic imbalances and unfavorable tax regimes continue to pose as a threat to the business environment.

Katandula: Prevailing economic challenges such as climate continue to pose as a threat to the business environment

“This is why this year’s conference has been organized under the theme: “Re- engineering Businesses to Withstand Shocks,” underlining the critical importance of adaptability, resilience, and transformation in navigating dynamic economic challenges,” said Katandula.

He urged government to review the corporate tax rate, which it says at 40 percent, is the highest in the region.
Said Katandula: “We are growing backwards because of lack of international competition, we need to find ways of making Malawi a more competitive business environment.

“It is not ideal that our corporate tax rate at 40 percent is the highest in the region, that is taking Malawi backwards as an investment destination. We need government to rethink that very quickly.”

Katandula, said while businesses are aware of the pressing demands on the part of government that would make it impossible to have a lower rate in the region, bringing it down to an average would make a meaningful impact.

On his part, Press Corporation Limited chief executive officer Ronald Mangani observed that considering that the private sector is touted as the engine of economic growth, the fact that the economy is not growing means the private sector is not meeting expectations.

“It is very clear that challenges we face are challenges of production. The economy is not producing enough and not able to meet the consumption demand of the economy,” he said.

Attentive: Participants follow proceedings at the Summit

In the past three years, Malawi has experienced weather shocks, unprecedented health and geo-political conflicts.
The shocks, according to MCCCI, continue to pose a threat to businesses, including continuous liquidity challenges in foreign exchange markets, high global commodity prices have left a toll on agriculture, energy, and infrastructure development.

Considering these trends, MCCCI says the country is expected to achieve a growth rate of two percent in 2024.

On his part, Minister of Trade and Industry Sosten Gwengwe admitted that some policies including tax regime is not conducive for businesses, a situation that he said government is working to address.

“We are doing all these reforms, cognisant that better economic conditions are needed for companies and individuals to invest, create employment and encourage entrepreneurship, innovation, and creativity.

“The lessons learnt from the occurrence of such shocks, therefore, call for a complete transformative strategy that revamps business operations completely,” he said.

The minister further challenged the private sector to take advantage of available opportunities and work hand in hand with government to grow the economy.