Foreign private capital on the rise –NSO report
The Foreign Private Capital (FPC) has increased to 3.7billion US dollars (3.7trillion kwacha) in 2021 –recent National Statistical Office(NSO) report shows.
This is the inflows of investment to acquire a lasting management interest (10 % or more of voting stock) in an enterprise operating in an economy other than that of the investor –also known as Foreign Direct Investment -FDI.
Thus, the ninth FPC survey by NSO which collected data on stocks and corresponding flows for the years 2019, 2020 and 2021 shows a 68million US dollars rise from 3.64billion to 3.17billion US dollars.
The findings provide a reliable source of data for the compilation of the Balance of Payments and International Investment Position statements which form a basis for decision making and formulation of macroeconomic management and investment policies.
“Overall, the survey established that FDI continues to be the main source of capital for long-term investment in Malawi as such, long-term policies should endeavor to create a conducive environment for attracting foreign direct investment. It was also noted that Foreign Portfolio Investment was insignificant during the period under review,” reads the report in part.
It shows that the major source countries of Foreign Direct Investment net inflows are Mauritius, South Africa and Mozambique.
Malawi’s private investments mainly come from South Africa as the region’s hub with most of the region’s big companies incorporated in Mauritius.
Some analysts have a cautious approach to foreign private capital as they fear the economy could be losing out subject to taxation flows awful dividend policies.
In 2021, total dividends declared stood at 95.2 million dollars compared to 62.5 million dollars the prior year with 106million dollars reinvestment from 61 million in 2020.
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