Representatives of the business community have warned against political manoeuvring and abuse of funds in the K35 billion Malawi Agricultural and Industrial Investment Corporation (MAIIC) established to facilitate industrialization. Board chairperson of CDH Investment Bank, Franklin Kennedy, expressed his reaction yesterday in Lilongwe after President Peter Mutharika launched the corporation, in which the government has a 20 percent stake and is seeking partners to take up the remaining 80 percent under a public, private partnership (PPP) arrangement.
The government’s start-up capital comprises K22 billion ($25 million) and another K13 billion from the sale of Malawi Savings Banks (MSB) and Indebank. Kennedy said the corporation will succeed if, right from the onset, it operates on strict compliance guidelines and policies key to preventing resource abuse, money laundering activities and governance on professional lines.
Among other set-up tasks, the corporation has yet to engage its chief executive officer (CEO) and hopes to attract several commercial banks and pension fund administrators among those to capitalize it. But some of those expected to invest in the corporation yesterday showed that they will employ a wait-and-see approach—over how the entity will kick off—before committing their funds into it.
In an interview, Ecama president Chikumbutso Kalilombe described the launch as a welcome development but was quick to point out that it will closely monitor how the corporation will be established. He said cautioned the government to watch out and avoid killing the corporation through political factors, citing how a viable entity like the Malawi Development Corporation (MDC) collapsed.
Old Mutual Malawi plc group CEO Edith Jiya, whose institution also manages pension funds, hailed the launch of the corporation but said her institution will first study the corporation’s business model before considering partnering with it.
Launching the corporation, Mutharika described it as a game changer and a pathway to the country’s achievement of the industrialization goal for socio-economic development, which is part of his government agenda.
He said: “Today we are empowering the Malawian farmer. This is the day we begin to industrialize Malawi in a practical sense. With this investment corporation, we are implementing our national vision to end poverty. “We have talked about reducing poverty for too many years. Now, talk time is over.” Minister of Finance, Economic Planning and Development Goodall Gondwe said the establishment of the corporation follows wide consultations with key institutions such as the Reserve Bank of Malawi, the World Bank, donors and lessons from other countries.
The corporation is meant to offer rare opportunities to farmers and businesspeople to get long-term investment, as they will operate in cooperatives. Commercial banks in the country have not been financing long-term investment projects, owing to risks that are associated with sectors like agriculture, mining, manufacturing, among some sectors. This left the farmers and some investors destitute.