New legislation to boost economic participation

A group of influential Malawian businessmen has called on the government to create more economic opportunities for its citizens. Mike Mlombwa, a founding member of the Indigenous Business Association of Malawi, claimed that under former president Bakili Muluzi, locally-owned businesses were sidelined from government tenders. "As local businessmen we are struggling to get business from government, but instead it is the foreigners that are benefiting," he alleged. Local businessmen selling motor vehicle spare parts in the capital, Lilongwe, recently clashed with police, claiming that the government favoured Nigerian-owned businesses. Nigerian shops were shut down temporarily until the situation had calmed down. According to business consultant Mark Maleta, new legislation aimed at broadening economic opportunities for indigenous Malawians would help to alleviate economic pressure. The Economic Association of Malawi has long complained that economic growth was difficult to predict because of the lack of commercial opportunities. The proposed National Empowerment Policy is geared towards improving access to capital and bolstering businesses acumen, particularly among the poor. The draft document reiterates that policies would favour 'Malawian citizens'. An estimated MK 178 million (US $1.68 million) is expected to be allocated to improving access to financial services and capital, while MK 15 million (US $138,000) will be spent on improving access to land and infrastructure, especially for women, the disabled and the youth. Malawians needing land for commercial purposes will be given preference. A key recommendation was that goods and services "consumed" by the government and parastatals be outsourced to businesses owned by Malawians. The country's economy is expected to grow by 4.2 percent in the coming fiscal year, but recently elected President Bingu wa Mutharika has said that 6 percent growth per year would be needed to eliminate widespread poverty. Landlocked Malawi lacks mineral resources and is one of the most densely populated countries in sub-Saharan Africa. In a mainly agrarian economy that employs 85 percent of the labour force and accounts for 40 percent of gross domestic product, three droughts in four years have had a devastating effect on household coping mechanisms. Almost 65 percent of the population live in abject poverty.