Malawi participates in the 10th CII Exim Bank Conclave in India

Far left; Mr Randson Mwadiwa, Secretray for Industry and Trade, Malawi Government with other speakers at the second session of the 10th CII-Exim Bank Conclave at Taj Place Hotel in New Delhi on 10 March 2014

Mr. Randson Mwadiwa led  the Malawi delegation to the 10th  CII –Exim Bank Conclave held at Taj Place Hotel in New Delhi on 10 March 2014. Also attending the Conclave were Mr Sandram Maweru, Secretray for Water Development and Irrigation and Mr Clement Kumbemba, Chief Executive of Malawi Invetsment and Trade Centre (MITC). From  the Malawi High Commission, H.E. Dr. Perks M. Ligoya , High Commissioner; Captain Lewis Mbilizi, Deputy High Commissioner; Mr. Alfred Vilili, Counsellor (Trade); Mr. McDonald Mizati,  First Secretary, (Polotical); Ms Bertha Msusa, First Secretary (Tourism) particpated in the Conclave.

In his remarks at the Conclave, Mr. Mwadiwa thanked the organisers for inviting Malawi to the Conclave. He also thanked the Government of India for extending Lines of Credit to other developing countries including Malawi.

He noted that the India Africa Cooperation was mooted on the principle of South –South Cooperation and was pursued bilaterally as well as multilaterally. He alluded that the commitments made under this Cooperation were capable of delivering substantial benefits to the people of the two sides as they had been backed with concrete projects and earmarked funding. The Secretary further noted that India Development Assistance was mainly disbursed in two forms, namely; financial assistance through lines of credit and grants, and technical assistance programmes for capacity building. He noted that the India–Africa trade and investment conclaves have also played a crucial role in promoting trade and attracting investment in Africa.

He said, in spite of having been independent for the past 50 years and more, many African countries continue to lag behind in many aspects of development. The levels of education continue to be low; food security was still a challenge and infrastructure wass still of levels far below the critical mass to support investment in key industries such as mining, manufacturing and ago-processing. This had necessarily meant that most countries have remained exporters of primary produce with little or no value addition.

With regard to credit, Mr. Mwadiwa observed that the Government of India was providing concessional loans through line of credit through the Exim Bank of India.

The Secretary observed that there were three challenges with the lines of credit, namely; the level of concessionality was very high, way below the World Bank International Development Assistance (IDA) levels; the requirement for government guarantee on private buyers’ credit was effectively transferring the burden more or less to the Government. He further noted that the concessional loans had, as a condition the importation of 70% of goods from India, which had resulted in a number of infrastructure and agricultural projects being implemented.  He however observed that the 70% requirement was not conducive to industrialisation in the beneficiary countries.   He said that there was the need for the Government of India  to consider reducing the interest rates to the level of IDA.

He recommended that the Exim Bank of India should find a way of working with financial institutions in Africa to be able to extend these loans to the private sector. Finally, he called on the Government of India to consider reducing this to between 60% or 65% to encourage importing countries to benefit their industries as well