2009 Reports

Foreign Direct Investment in Blantyre, Malawi: Opportunities and Challenges

Nakagawa, Sawa; Bahl, Abhinav; Demisse, Meron; Ishizuka, Megumi; Miranda, Francisco; Ramirez, Frank; Sung, Kwi Young

In 2006, the Earth Institute at Columbia University launched the Millennium Cities Initiative (MCI), an urban counterpart to the Millennium Villages Project (MVP), to assist nine mid-sized cities across subSaharan Africa in achieving the Millennium Development Goals (MDGs). MCI provides research and policy analysis in order to attract foreign direct investment (FDI) to the cities. Using the investment evaluation framework described in Section I, the authors identified the textile manufacturing sector as having considerable investment potential in Malawi, distinguished by higher impact and feasibility. Investment in this sector is expected to have high positive impacts on employment and productivity, as well as high feasibility measured by demand, supply, enabling market and profitability factors. In addition to textile manufacturing, which is the sole high feasibility-impact sector, the authors identified five medium feasibility-impact sectors. These investment opportunities include the following agricultural value-added products: cassava processing, pigeon pea processing, chili processing, groundnuts processing and macadamia nut processing. Having identified opportunities for investment, the authors also evaluated constraints hampering the growth of each industry and set forth recommendations for MCI with a view to encouraging FDI in the High Feasibility-Impact sectors and alleviating constraints that hamper growth in these sectors.