Managing director for EDF Gerald Msomba concedes that capacity gaps that could best be addressed through partnerships are failing many Malawian entrepreneurs to develop bankable business plans to accelerate the country’s exports.
Msonda said on Friday that local traders fail to make breakthroughs because of capacity gaps that in the end stop potential financiers like Standard bank from committing to support.
It is anticipated that through the memorandum of understanding the two institutions have signed, doubts on traders seeking financial support from the bank will be minimized, in the process, enhance the country’s economy.
EDF feels scarcity of capital is not the only challenge that the nation is dealing with in the quest to accelerate development.
“Banks always need to be de-risked and that is always done by development fund institutions therefore the collaboration is trying to address the risks that banks cannot deal with on their own. EDF is coming in with instruments to de-risk them so that they can equally allocate capital to priority growth sectors of the economy without any worry on their returns,” he said
Standard Bank of Malawi Chief Executive officer Phillip Madinga says Malawi’s turnaround from being a predominantly importing economy to a net exporter hinge on viable partnerships that will help unlock sources of capital for local producers and manufacturers.
He said considering that the country’s exports are agro-based, focus in the new partnership will lean on supporting sectors that have been earmarked as boosters to realizing the country’s development agenda, Malawi 2063.
‘’The one particular sector that we are targeting is agriculture. We believe that providing both short term and long-term financing as well as trade instruments, we can actually begin to support export diversification that this country is implementing but at the same time supporting import substitution” said Madinga.
The new partnership is coming at a time the Africa Continental Free Trade Area has been operationalized which Standard Bank Malawi hopes will boost chances of local producers to tap into export markets being created under the new trade arrangement.
