The role of investment incentives on foreign direct investment inflows : a Malawian perspective.
MetadataShow full item record
This study carries forward the exploration of the link between the enactment of the Malawi Investment Promotion Act (1991) and the investment incentives laid out therein, and the level of foreign direct investment to Malawi. In doing so, the study aims to establish the progress that Malawi has made in nurturing an investment climate that is attractive to foreign investors. The respondents were 26 foreign companies that have invested in Malawi following the enactment Investment Promotion Act. All participants completed a self-administered questionnaire covering several attributes pertaining to Malawi's investment environment. Interviews were also conducted with government officials and employees from the Malawi Investment Promotion Agency (MIPA). The data strongly suggest that FDI has contributed to Malawi's economic growth to a certain extent, and that foreign direct investment inflows have risen during the 1990s. However, the results must be viewed within the context of the broader macroeconomic environment. If Malawi is to see any increase in its FDI inflows, an overall strategy is essential to restore macroeconomic conditions that are conducive to growth, to strengthen the legal and regulatory framework for doing business in the country, and improve the infrastructure that supports the economy. Only when the fundamental determinants are attractive enough for investment to be profitable, will investment incentives have any significant effect.