BLANTYRE-(MaraviPost)—Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has attributed the negative balance of payment facing third world countries including Malawi to unfair policies imposed by the International Monetary Fund (IMF), World Bank (WB) and World Trade Organization.
MCCCI president Karl Chokhotho, speaking during the official opening of the 28th Malawi International Trade Fair by President Peter Mutharika at Chichiri Trade Fair grounds in Blantyre, asked the president to boost the private sector by heading towards industrialization saying the international bodies’ policies led to massive deindustrialization in the country.
“The fair started as a component of the structural adjustment measures package, which malawi adopted in order to avert the economic challenges the country was facing then. During that period the prices of agricultural commodities on the world market plunged.
“As an exporter of such primary commodities Malawi experienced highly negative balance of payment during this time. In order to improve the net balance of payment position the government then decided to introduce the international trade fair, that’s creating platform for showcasing manufactured products that would attract foreign customers who in turn would bring in the much needed foreign exchange and improve the country’s balance of payment position,” Chokhotho said.
He further said that the country today is faced with the similar situation of negative balance of payment citing the low prices tobacco is fetching on the international market.
“Today we are faced with the similar situation. Our primary agricultural products are fetching unprecedented low prices. We all hear the news about the low prices being offered in the exchange with our tobacco. The major difference between mid 80s and now is that the country has very few manufacturing industries remaining, whereas the country’s population has exploded. Our manufacturing sector has been principally dismated by the liberalization policy regime which the country adopted following what I am tempted to say improper advice of the IMF, WB and later on the WTO.
“The liberalization and privatization policies which these international bodies, that’s IMF, WB and WTO, forced upon third world countries including Malawi as solutions to our problems devastated our economy leading to massive deindustrialization and turning our country into a consuming economy. It is upon recognizing this fact and acknowledging that we need to resuscitate our manufacturing industry that we decided to give this fair the theme “achieving competitiveness through innovation”.
Chokhotho, while hailing the president on Buy Malawi Strategy, said the government should strive for industrialization to ensure the growth of revenues which the government collects from the private sector.
“Your excellence, even before the donors walked away from funding the government budget directorate, the main source of government revenue has always been taxes from private companies. These are in the form of income taxes and customs duty. Overtime custom duty is becoming less important because of the regional treaty the country is entering into.
“As such production by private sector needs to be boosted. The government must rely on the sustainable inflow of revenue from private sector. However, without growth in private sector, due to numerous obstacles in doing business, they will not be enough growth in government revenues.”
In his speech, President Mutharika said his government will continue working with the private sector, saying the business community success translates into national success and he asked the companies to be innovative and competitive so as to attract foreign customers.
“Your prosperity is our prosperity and my success should be your success. We are partners in business and partners in development and so let my vision be your vision. We are taking innovation to initiate private sector reforms. We need a beautiful minded public service that serves the public and the private sector efficiently,” he said while asking the private sector to think innovative and support government policies.
The Fair is an annual trade promotion event that gives exhibitors an opportunity to market their products and services and enhance product and brand visibility and generate leads that helps drive incremental sales.