Page 16 - DMA Malawi Report 2013

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Investing In Malawi
ver the past decade,
contributed 1.2% to the
annual per capita growth of
Malawi’s gross domestic product (GDP).
According to the African Development
Bank (AfDB), raising the country’s
infrastructure endowment to that of
the region’s middle-income countries
could increase that contribution by 3.5%.
Although Malawi has had some success
in infrastructure development – including
reaching its Millennium Development
Goal (MDG) for water almost a decade
ahead of the target and making GSM
telephone signals widely available without
public subsidy-there are a number of
challenges that still remain.
In order to keep up with the demands
of sustained economic growth, the
government of Malawi has actively taken
steps to address its infrastructure needs
through a number of policies, including
The Malawi Growth and Development
Strategy (MGDS II) which is the
overarching medium-term strategy from
2011 to 2016 aimed at fur ther reducing
pover ty through sustainable economic
growth and infrastructure development.
It follows the implementation of the
country’s first medium-term strategy,
MGDS I, which was implemented
between 2006 and 2011. Fur thermore,
the development of infrastructure is one
of the five priority pillars of President
Joyce Banda’s administration’s Economic
Recovery Plan (ERP).
President Banda has highlighted the
importance of the sector, stating “a reliable
and modern transport infrastructure and
network is crucial for any country’s socio-
economic growth and development.” As
a landlocked country, the government
recognizes that Malawi is heavily dependent
on effective road, rail and air transport
networks,which are critical in supporting its
key economic activities, including agriculture
and tourism. Although steps towards
improving the transportation network
are already taking place, poor transport
infrastructure continues to impinge on
domestic and international trade as well as
on the country’s development.With such a
wealth of natural resources in remote parts
of the country, Malawi is in need of greater
investment in transportation infrastructure
to release its huge potential capacity.
During the mid-2000s, Malawi spent
close to US$200mn per year, about half
of which went to the transpor t sector.
However, road expenditure has fallen
since and is shor t of what is needed to
preserve the network in good condition.
Fur thermore, fuel shor tages and some
impor ted basic commodities have
affected the implementation schedules of
major road construction projects, leading
to huge costs for the projects, which were
predominantly financed by international
donors. Currently, over 70% of Malawi’s
public road network, just under 15,500
kilometers is unpaved. This includes a
large propor tion of secondary roads
(approximately 87%), and almost all the
ter tiary and district roads. Despite the
poor condition of roads, road transpor t
is the dominant mode of transpor t in
Malawi, accounting for 70% of all domestic
traffic and 95% of all external trade.
by Natalia Debczak-Debski