European Times: How would you describe the relationship between the US and Malawi?
Jeanine Jackson: The U.S. has been partnering with Malawi and supporting its development for over 50 years. For example, the Peace Corps is celebrating its 50th anniversary in Malawi this year, and the development agency USAID has also been active here for over 50 years. US funding for Malawi has been growing particularly strongly over the past five years and more than doubled between 2008 and 2012, rising from €82.2 million (US$110 million) to €189 million (US$253 million). In fact, the US provided over €747.3 million (US$1 billion) in funding for Malawi in this five-year period, and this is in addition to the support Malawi received from institutions that the US- funds like World Bank, the IMF, and Global Fund.
European Times: Why is international support for Malawi growing?
Jeanine Jackson: Private investment and donor funding was hindered by the policies of former President Bingu wa Mutharika. However, President Joyce Banda has taken steps to improve the governance and the investment climate thus creating much more confidence in Malawi’s future. Moreover, the IMF has been bending over backwards to support Malawi through an extended credit facility. In addition, other development partners have renewed budget support. President Banda is showing a tremendous amount of resolve when it comes to holding government officials accountable and reforming her civil service into a more productive and transparent body. Most importantly, the government of Malawi has finally prioritised private-sector-led growth as being its linchpin to development.
European Times: What are some of the most important US Government projects in Malawi today?
Jeanine Jackson: One key project is ‘Feed the Future’, the US government’s global hunger and food-security initiative. One of the Malawi government’s national policy priorities is to enhance agricultural production and nutrition. Today, ‘Feed the Future’ is complementing President Banda’s efforts to address food security, nutrition and poverty reduction by focussing on value-chain development in the agriculture sector.
Secondly, the Millennium Challenge Corporation (MCC) $350 million compact is a single-sector program designed to revitalise Malawi’s energy sector and improve the availability, reliability, and quality of the country’s power supply. One of the keystones of this initiative is infrastructure development, focussing on the rehabilitation, upgrading and modernisation of the national power system. The government of Malawi has committed to investing in additional generation capacity by completing the construction of new hydropower plants. The second MCC keystone is to provide support for the government of Malawi’s agenda for policy reforms in the power sector. To support this initiative, the MCC will provide technical assistance to the Electricity Supply Corporation of Malawi, the Malawi Energy Regulatory Authority, and the Ministry of Natural Resources, Energy and the Environment.
European Times: Can you highlight some particularly high-potential investment opportunities in Malawi today?
Jeanine Jackson: A couple of sectors really stand out from the rest. One of them is value-chain investment. Malawi is an agricultural country with a heavy focus on the production of tobacco, coffee, tea and cotton. These products are vulnerable to world price fluctuations and Malawi exports these products in raw form and therefore does not benefit from value addition. As investors are certainly aware, there is money to be earned in adding value to raw materials and investing in products that are price inelastic. Therefore, I would strongly suggest that investors look into adding value to Malawi’s agricultural products, particularly fruits, vegetables, and legumes. These can also be sold to the huge regional market.
The infrastructure sector is also ripe for further development. Thanks to its strategic location in the region, Malawi has the opportunity to be a transport hub connecting Tanzania, Mozambique, Zambia and Zimbabwe. To make the most of this advantage, the country needs to improve its transport infrastructure.
There are quite a few exciting road and rail projects underway, such as the M1 highway and the railway running across Malawi from Tete to Nacala in Mozambique. An inland port along that route would greatly facilitate regional trade and internal transport of goods.
Finally, Malawi’s tourism sector is untapped. Malawi has gorgeous attractions such as Lake Malawi and Nyika Plateau in the north, and there are a lot of opportunities to develop those areas. However, before the tourist sector can take off, Malawi needs to adopt “open skies” and improve services such as health, banking, and hospitality.
I would note that the government has made significant reforms in its public-private-partnership processes and we will see more PPP opportunities for investors to come.
European Times: What is your personal message to potential investors and visitors?
Jeanine Jackson: Malawi is on the right track to sustainable growth. International development partners and private investors have a cautiously optimistic view of Malawi going forward. We think that as long as Malawi sticks to its reforms and continues to be proactive in facilitating private sector-led growth, this country can look forward to a very promising future.