PRESS BRIEFING STATEMENT MADE BY THE MIPA BOARD OF DIRECTORS CHAIRMAN, AT THE PRESS BRIEFING SESSION HELD iN APRIL 11, 2007 IN BLANTYRE

Members of the press present here, Ladies and Gentlemen, I have called for this press conference, as Board Chairman of the Malawi Investment Promotion Agency (MIPA) and on behalf of my fellow Board Directors who are not present here today. You are all aware that the Malawi Investment Promotion Agency (MIPA) is a Government body that was created through an Act of Parliament with a mandate to promote, attract, encourage, facilitate and support both local and foreign investment in the country. It is also important to note that one of the crucial roles of the Agency is to engage consultations with the private sector and make recommendations to Government on changes that should be made to improve the investment climate.

In light of this, the objective of our press briefing today is to update the Nation on the activities that the Agency has embarked on in fulfilling its mandate.

The briefing today will touch on broadly on three issues which are (i). The review of the National Investment Policy, (ii). Implementation of a project known as Capacity Building to Grow Sustainable Business, and (iii). Construction of MIPA Factory Shells.

1. NATIONAL INVESTMENT POLICY

Government through the Agency is in the process of reviewing the National Investment Policy for the country. The process started in January, 2006, with an inauguration ceremony that was presided over by the Minister of Industry, Trade and Private Sector Development, Hon Dr. Ken Lipenga, at the Malawi Institute of Management in Lilongwe. We have been using the Statement of Investment Policies since 1988 and it was time that we looked at new set of investment policies.

We feel that with the Government’s current economic agenda i.e achieving higher rates of economic growth, can better be achieved if it supported with a good investment environment in the country, which must include a current, well developed and implemented National Investment Policy, which will help create a conducive investment climate.  MIPA initiated the reviewing and updating of the National Investment Policy.  It is believed that with this review, Government’s broad economic development agenda will be realized.

It is important to note that the review process aims at coming up with a National Investment Policy that will assist Government to achieve its strategic goals which include

Increased value-adding of our primary products;

Transforming Malawi into a producing and exporting nation;

Facilitating the transformation of the rural areas; and

The creation of new employment opportunities for Malawians thereby assisting in poverty reduction.

The review of the National Investment Policy has been consultative process, which so far has involved many stakeholders from the private sector, public sector, the Parliamentary Committee on Commerce, Industry and Tourism and the Civil Society. Through this consultative process a draft National Investment Policy was produced in November 2006, which has been at the center of further consultations.

We have so far conducted four stakeholder workshops, the first one was a national workshop, which brought all stakeholders together. During this workshop, the objectives were spelled out and stakeholders were encouraged to fully participate in the process so as to help create a good environment for investment. Then we have had three regional workshops which were conducted in Lilongwe, Blantyre and Mzuzu. I must say that these consultations were well attended by stakeholders and created an interesting debate on the sections of the draft policy.

Currently MIPA is finalizing the Draft Policy by incorporating all the important comments that were made to ensure that it reflects stakeholder consensus. Once this is ready it will be presented to the Cabinet for consideration and approval. We feel that by the end May the process will be through.

It is envisaged that after the work on the New Investment Policy is finalized, a review of the regulatory, administrative and legal framework to ensure that they are in line with the National Investment Policy will commence.

2.  GROWING SUSTAINABLE BUSINESS

I am pleased to inform you that in an effort to strengthen its capacity to facilitate investment, the Malawi Investment Promotion Agency (MIPA) is implementing the Growing Sustainable Business (GSB) programme with support from the United Nations Development Programme (UNDP). In line with the Government of Malawi’s strategy of poverty reduction through sustainable economic growth, the GSB programme aims at attracting pro-poor investment and business to Malawi, thereby bringing new employment opportunities and needed goods and services to the poor. 

The GSB programme consists of two components:

A, Facilitating pro-poor investment to the country

Jan Willem van den Broek, the GSB Broker, will assist MIPA in identifying pro-poor investment opportunities, developing innovative business models, brokering partnerships between key stakeholders on selective projects, and marketing those projects to both local and international investors.

B. Building capacity at MIPA

MIPA’s capacity to promote, attract and facilitate investment will be improved through the adoption of best practice standards in its business information/investment resources, communications/outreach, and investment service activities.

In addition, a GSB Project Development Analyst will assist MIPA in developing feasibility studies, business plans, and company profiles;

while a Business Development Analyst will assist MIPA in carrying-out industrial audits and facilitate industrial linkages between large companies and SMEs.

It should be noted that the GSB programme is a global initiative.  While new to Malawi, GSB is currently operating in nine African countries, including neighboring Tanzania, Zambia, and Mozambique, as well as nine countries in Central America, Asia, and Eastern Europe with ambitious plans for expansion. The global initiative has facilitated a large number of investments, ranging from rural telecommunications to the provision of finance for small and medium size enterprises.  The global GSB portfolio includes investments ranging from US $200,000 to US$23 million. 

The programme was introduced to Malawi in February 2007 and will run until the end of the year, subject to a five-year extension. 

3.    CONSTRUCTION OF FACTORY SHELLS

In order to support MIPA’s strategies of attracting investment, the Agency is in the process of constructing State of Art Factory Shells. These are ready-made factory buildings which will be allocated to serious investors both SMEs who will be engaged in production of goods and also serious foreign investors.

The provision of advanced factory shells is a key component of the industrial development strategy. The strategy to provide advanced factory shells has proved successful in many developing countries as well as in the newly industrialized countries such as Mauritius, Malaysia, Singapore and South Korea.

It should also be noted that currently Malawi does not have adequate serviced industrial sites and does not have warehousing facilities which are readily available for rent to investors for production. Malawi is often in a situation where every new investor has to start the process of constructing factories which otherwise could have been made available and the task of investor be left for machinery installation. It should therefore be noted that industrialization cannot take place in the absence of this critical aspect of the physical infrastructure.

In addition, we should also know that currently Malawi has not reached a stage where development of serviced industrial sites can be left entirely in the heads of the private sector.  This is why MIPA is involved in the construction of Factory Shells, to heavily reduce time taken by the private sector in construction.

This project will initially start in Area 28, which is the industrial site in Lilongwe but will extend to the cities of Blantyre and Mzuzu, and later to all other districts.  The industrial estate in Area 28 can accommodate nearly 200 developed plots, of which the Agency has been allocated three (3) hectares. This can accommodate fourteen standard shells.  The site is quite ideal and appropriate, as it is closer to the main road and rail line.  The site is also close to the labour pool.

Benefits of Factory Shells can not be over-emphasized but will help achieve the following:

The lead time between the period investors decide to invest and the implementation shall substantially be reduced;

Serious investors will now be able to make a decision quickly as land and factory shells will be readily available;

MIPA will be able to confidently promote investment as the current problem of non-availability of serviced land and factory shells will have been minimized;

As more investors will be investing, more employment opportunities will be generated;

Government revenue will be increased through tax collection; and

Consumers of different products will benefit on account of lower prices and/or dependable supply of goods and services as more ventures will be in operation.

Ladies and Gentlemen, these are some of the major developments that the Agency is currently pursuing in an effort to create a conducive environment for investment and at the same time promote investment in the country.

I thank you for your attention.