Similarly, MSMEs themselves are likely to require very hands on support. The MSME sector is central to this.ĭesigning a MSME policy that ensures substantial resources are allocated to priority interventions, while formulating a strategy that focuses on private sector export led growth, will help in achieving sustainable economic development for Malawi. New strategies are needed strategies which recognise where many Malawians are employed and where economic empowerment of local people is a possibility.
If this vision is to be achieved there ought to be a deliberate effort to ensure a balance between relevant design of policies and appropriate interventions. An alternative strategy is therefore needed that would allow Malawi to transform the economy and ensure greater benefits to more people – and thus achieve its goals of wealth creation, sustainable economic growth and economic empowerment as laid out in the Malawi Growth and Development Strategy (MGDS). Despite this focus, the country maintains an over-dependence on traditional export crops like Barley Tobacco and further, remains a net-importer. Malawi’s National Export Strategy is focused on three priority clusters to help offset the effects of the country’s trade deficit – namely oil seed, sugar cane and manufacturing. KEY STRATEGIES FOR EFFECTIVE MSME PROGRAMMES This is particularly the case in light of the global financial crisis and the resulting withdrawal of aid in some quarters. It’s particularly important that resources are made available for entrepreneurship and enterprise development initiatives, to ensure not only that jobs are created but that wealth is generated and distributed to help address poverty levels. While there have been significant policy developments in Malawi to help SMEs, limited resources have meant not all of these strategies have been implemented as planned. This required a re-prioritisation, and the injection of substantial resources in terms of human resource, finance and infrastructure to adequately support SMEs. However, the recent global financial crisis created a particularly tough climate for MSMEs, with a reduction in demand for goods and services and a contraction in lending by banks and other financial institutions. Overall, this sector generates an income of 326 billion Malawian Kwacha (close to £462 million) making it a significant contributor to Malawi’s economy. Women make up 46% of these employment figures – up 4% from 2000 – and contribute about 16% to Malawi’s GDP. Evidence shows small and medium enterprises make up about 1.7 million people, equivalent to 38% of Malawi’s total working age population. Micro Small and medium-sized enterprises (MSMEs) play an important role in the economy of many developing economies and Malawi is no exception.
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