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Legal System Supports Investors

Malawi’s legal system based on English common law gives comfort to investors as it is well known. Malawi also has its own legislation. “Malawi’s Constitution is the supreme law of the land,” explains Krishna Savjani OBE SC of Blantyre-based law firm Savjani & Co.

Krishna Savjani, OBE SC Savjani & Co.

Malawi’s judicial system includes the Supreme Court of Appeal, the High Court and subordinate magistrates courts. “The High Court has established a commercial division to deal with commercial matters. Malawi also has an Industrial Relations Court, dealing with employment matters. However, for a variety of reasons, it can take a long time to progress cases through the courts,” Krishna Savjani says. Subject to a few exceptions, all cases commenced in the High Court or any subordinate court must first undergo mandatory mediation and, if this fails, they are handled by the court system.

Economic reforms bearing fruit

According to Krishna Savjani, Malawi has made great progress over the past year in upgrading conditions for doing business. He says, “Things have begun to change for the better since April 2012 and positive economic reforms have been introduced. The government’s new economic recovery plan should result in an attractive investment environment, and continued political stability and consistent economic policies both before and after the next elections in May 2014, along with the ongoing economic reforms, will further improve the investment climate.”

Krishna Savjani cites mining, energy, irrigation, commercial farming and agro-processing as sectors with outstanding development potential in Malawi. The country’s extensive mineral deposits, include bauxite, heavy mineral sands, monazite, coal, uranium, precious and semi-precious stones, limestone, niobium and rock aggregates. Agriculture, which remains key to the country’s economic growth and wealth creation, is currently dominated by subsistence farming, but commercial farming, which would in turn benefit and expand the agro-processing sector has excellent growth prospects. The challenge is to create an environment that will encourage and facilitate commercial farming.

To make the most of these advantages, Malawi needs significant investment in its infrastructure, from roads and power grids to power generation and water supplies. Krishna Savjani points out, “Malawi has inadequate and poorly maintained power-generation capacity, so the government actively supports investments in energy generation and supply. It is also promoting public-private partnerships in energy generation and distribution.”

While challenges remain, Malawi is on the right track, Krishna Savjani believes. He says, “Investment in infrastructure, including transport systems and utilities, is a prerequisite for the growth of the Malawi economy. Political stability and sound and consistent economic policies, and the implementation of the government’s economic recovery plan, should result in increased infrastructure investment, which will in turn promote investment in the potential growth sectors.”

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