To promote foreign direct investment (FDI) in Malawi, several strategies and initiatives have been identified. Currently, Malawi receives very little investment from overseas, consistently ranking among the bottom of African countries in this regard. In 2019, it is estimated that foreign investment in Malawi was around US$100 million, significantly lower than other African nations. To address this, the government of Malawi needs to establish a robust international presence on the global stage via media, networks, and enhanced and effective diplomacy to promote itself as an attractive investment destination. Additionally, reforms within the country, proper functioning of institutions, and promoting a more business-friendly environment are essential to attract FDI. The government should adopt a number of business-friendly policies to stimulate a conducive environment for investment, similar to the approach taken by Rwanda, which has been successful in attracting a higher share of FDI as a percentage of its GDP.
Malawi’s government has implemented policies to attract foreign investments through bilateral cooperation, as evidenced by events like the Malawi-China Investment Forum and the Malawi-Japan Investment Forum. The country is eager to receive foreign investments, and foreign investors are generally granted the same rights as Malawian investors. However, the administrative procedures for investments in the country can be time-consuming, involving obtaining a business license, a tax registration number, and a land permit. Despite this, Malawi remains open to foreign investment, with the agriculture sector being a key area that attracts the most FDI, primarily from countries such as South Africa, the USA, the UK, and India. The demand for electricity in the country remains high, leading to increased interest in renewable energy projects, particularly in solar, wind, and waste-to-energy, in addition to hydropower projects. Malawi’s government is open to foreign direct investment and has established legal instruments to protect investors, providing national treatment to both foreign and domestic investors. The country’s constitution prohibits the deprivation of an individual’s property without due compensation. Malawi’s government is implementing an economic recovery plan to stimulate the growth of the economy and attract foreign direct investment. The Reserve Bank of Malawi and the Malawi Investment and Trade Center maintain records on the value and composition of Foreign Direct Investment (FDI) in Malawi. The government’s move to devalue and float the currency, the Kwacha, is expected to stimulate the growth of the economy and attract foreign direct investment.
