Malawi FDI jumps in 2008, boosts job creation

BLANTYRE (Reuters) - Foreign direct investment into Malawi jumped to a record high of $143 million for the eleven months to November 2008, helping to creat almost 26,000 jobs, the Malawi Investment Promotion Agency (Mipa) said on Wednesday.

The state agency said FDI rose from $92 million for the same period in 2007, with investment into the largely agricultutal southern Africa country expanding into manufacturing and tourism.

The inflows helped create 25,908 jobs, up from 15,829 the previous year.

Malawi has enjoyed strong growth, but was hit last year by high food and fuel costs. Latest government data put economic expansion at about 7 percent in 2008 compared to 8 percent the previous year.

But the country remains poor and relies heavily on donor support.

Mipa senior manager for corporate affairs Aretha Kamwendo told Reuters that investment was boosted by incentives, including allowing investors to repatriate their dividends, and stable interest rates.

"A strong macro economic foundation, the cost of borrowing being stable and a steady bank rate are some of the other factors that have encouraged investment," she said.

The central bank's lending rate has been steady at 15 percent for the past two years, with the commercial bank rate at 19.6 percent.

Kamwendo said the bulk of investment during the 11 month period came from Asia and South Africa.

"Asia has led as the main source of FDI into Malawi in 2008 with 27 new companies, followed by South Africa, Tanzania and Zimbabwe."