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Malawi INTRODUCTION • • • • • • •

Dr. Joyce Banda A New Kind of Leader Vice-President Positive about New Development Strategy The Warm Heart of Africa EU Ambassador Confident about Malawi’s Future Two Cities, Two Key Roles to Play US Ambassador Highlights Malawi’s Promising Future Embassy in Brussels Serves as Gateway to Malawi

GOVERNMENT

• Democratic Government Spurring on Development

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• World Bank a Long-Term Partner 22 • UNDP Reports Significant Progress Being Made 23 • IMF Supportive of Government’s Economic Recovery Plan 24

BUSINESS & INVESTMENT OPPORTUNITIES Ministry Launches New Support Strategy 27 Universal Industries 28 Far-Reaching Export Strategy 29 Boosting Exports, Adding Value 30 Candlex 31 Dynamic Organisations Spearheading Private-Sector Development 32 Akzo Nobel Malawi 33 MITC: Your Gateway to Investment Opportunities 34 Legal System Supports Investors 44

FINANCE • • • • • •

Former Minister of Finance Promoting Trade Instead of Aid Reserve Bank Governor Outlines New Recovery Measures Malawi Revenue Authority Light at the End of the Tunnel Following Bold Reforms CDH Investment Bank National Bank of Malawi

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• Former Agriculture and Food Security Minister Highlights Diversification

• Harnessing Renewable Energy Resources • Significant Energy-System Upgrades in Progress • Electricity Supply Commission of Malawi

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MINING

• New Survey to Give Accurate Picture of Vast • Mining Industry Positioned as Major Economic Driver • Establishing the Right Foundations for Mining Industry

TRANSPORT & PUBLIC WORKS • • • •

Ministry Focussing on Upgrading Infrastructure Mota-Engil Lafarge Group Transport Infrastructure Upgrades Keeping Economy on the Move • Toyota Malawi

IT & TELECOM

• Improving Access to Information and ICT Services • Liberalised ICT Sector Welcomes Innovative Services • Malawi Communications Regulatory Authority

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70 71 74 75 76

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HEALTH & EDUCATION

• Great Progress Being Made in Coping with Healthcare Challenges

• Educating the Next Generation of Leaders • Humanitarian Groups Ensuring Better Quality of Life

TOURISM

AGRICULTURE & FOOD

• Premium TAMA Tobacco Limited • Mapeto • Agriculture Continues to Drive National Economy

ENERGY

Minerals Resources

INTERNATIONAL ORGANISATIONS

• • • • • • • • •

• Agricultural Development and Marketing Corporation • Illovo Sugar (Malawi) Ltd. • Cotton Ginners Africa Limited

• • • • • •

The ‘Warm Heart of Africa’ Welcomes Visitors Welcoming People, Exceptional Tourism Diversity Cappuccino’s Corssroads Hotel Protea Hotel Ryalls Apex Rent-a-Car

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The European Times is a trading name of Crystal Mediacorp Ltd This guide is protected by copyright. All rights reserved. This publication, or any part thereof, may not be reproduced, stored electronically or transmitted in any form, without the prior written permission of European Times. The European Times PO Box 685 66 - London EC1P 1XP - United Kingdom Phone: +44 (0)208 371 2356 - Fax: +44 (0)208 371 2410 info@european-times.com - www.european-times.com

Every effort has been made to ensure information contained in this publication is correct and up-to-date. The authors and publisher accept no responsibility for any errors it may contain, or for any loss, financial or otherwise, sustained by any person using this publication.

Project Manager: Mohamed Wurie - Director of Government Relations: Aaron Teitelbaum - Project Coordinators: Geoffrey Kamba, Leila Ait Salah - International Manager: Aukje Oostendorp - Design: Martine Vandervoort, Dirk Van Bun, Walter Vranken, Johny Verstegen

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MALAWI LAND

Dr. Joyce Banda A New Kind of Leader HE Dr. Joyce Banda, President of Malawi since April 2012, is the second female President of an African country and the first in southern Africa, but she stands out from her fellow leaders in many other ways. She began her presidency with a promise to change her country for the better and did not waste any time putting her ideas into action.

HE Dr. Joyce Banda, President of Malawi

The new President quickly distanced herself from her predecessor, Bingu wa Mutharika, by revealing that he had targeted her for assassination. She then sold the presidential jet and the government’s fleet of Mercedes limousines in a high-profile gesture that showed her commitment to putting Malawi’s resources into projects that would benefit the local population instead of merely the ruling elite. In addition, she cut her own salary by 30% and launched an ambitious economic recovery programme.

Promoting good governance With these moves, Dr. Joyce Banda signalled her drive to promote good

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governance in Malawi, a remarkable achievement in a region plagued by corrupt, self-serving rulers. Her first 12 months as President were also marked by progress in decriminalising homosexuality and major public-health initiatives, such as the €11.3 billion Global Fund to Fight Aids, TB and Malaria. Dr. Joyce Banda has been serving her country for many years, since long before she became President. Born on April 12, 1950, in Malawi’s colonial capital of Zomba, she began her career as a secretary and soon became a wellknown advocate for women’s empowerment through founding and promoting the National Association of Business Women.


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Introduction

President Joyce Banda and US President Obama in Washington. According to a White House press release the leaders were to discuss strengthening democracy and economic opportunities in sub-Saharan Africa.

She later established the Joyce Banda Foundation to advance education for the economically disadvantaged, especially women and children, as well as encourage new work opportunities for women. Dr. Joyce Banda has received several international awards in recognition of her work towards empowering women and the underprivileged, including the US-based Hunger Project’s ‘Africa Prize for Leadership for the Sustainable End of Hunger’.

Long history of government service Dr. Joyce Banda was voted Malawi’s ‘Woman of the Year’ in 1997 and 1998. Entering the political arena in 1999, she won a parliamentary seat and served as Minister for Gender and Community Services during the administration of Bakili Muluzi, Malawi’s second democratically elected President in the multiparty dispensation. She later joined the DPP political party of the new

President, Bingu wa Mutharika, and was appointed his Minister of Foreign Affairs in 2006. As the country’s top diplomat, Dr. Joyce Banda established strong economic relations with China, ties which continue to benefit Malawi. Dr. Joyce Banda was Bingu wa Mutharika’s running mate in the 2009 presidential elections, but she later broke with the President over his decision to appoint his brother as his successor. The President ousted her from the ruling party but she resisted his efforts to force her from office and founded the People’s Party, becoming one of President Mutharika’s fiercest critics. She assumed the presidency when Mutharika died suddenly last year and she immediately launched Malawi’s economic transformation. The outside world has taken note of Dr. Joyce Banda’s efforts, and the IMF is once again funnelling support to Malawi after cutting off its assistance to the country because of the corruption and mismanagement in the Mutharika administration. The IMF granted

Malawi a €118.8 million loan after Joyce Banda pushed through her sweeping programme of economic reforms, which included devaluing the Malawi kwacha and removing major subsidies on fuel and other commodities.

Economic recovery programme Commenting on her goals for Malawi’s economy, the President says, “Within months of assuming office, I instituted an economic recovery programme to restore macroeconomic stability and lay the foundations for long-term growth. The economic recovery plan includes a combination of measures designed to stabilise our economy (such as the devaluation of the kwacha, the loosening of foreign-exchange controls and strong fiscal discipline), as well as social-protection programmes designed to cushion the poorest in our society from some of the unintended negative consequences of the austerity programme.” The President’s economic strategy particularly supports projects in the agriculture, mining, energy, tourism and infrastructure

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sectors since these are the foundations for Malawi’s economic progress. The programme is bearing fruit. Dr. Joyce Banda says: “We can already point to the stabilisation of the economy as evidence of the success of the short-term strategies within the economic recovery programme. In terms of success over the medium to long term, we will be looking for signs of increased local and foreign investment activity, leading to expansion of our key sectors.”

Improved climate for foreign investors President Joyce Banda welcomes foreign investors to help get Malawi’s economy off the ground. She says, “My government is taking steps to attract foreign and local investment by removing regulatory hurdles to doing business and undertaking investments in infrastructure to remove bottlenecks. The overall goal is to facilitate private-sector investment activity, which will lead to job President, HE Dr. Joyce Banda at 33rd SADC Summit

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creation and more opportunities for our people, especially the youth.”

“We are undertaking a number of reforms to improve the business climate and attract foreign investment and improve our World Bank ‘Doing Business’ ranking.” She adds: “We are undertaking a number of reforms to improve the business climate and attract foreign investment and improve our World Bank ‘Doing Business’ ranking.” These reforms include new regulations designed to streamline busi-

ness-registration and licensing; the establishment of the Malawi Investment and Trade Centre (MITC), a one-stop shop for setting up a business; digitised records at land registries and the Department of the Registrar-General, which will simplify property and business-name registration and searches; and revised visa regulations to make it easier for tourists and businesspeople to visit Malawi.

Strong support from the IMF On a trip to Malawi in January 2013, IMF Managing Director Christine Lagarde voiced her support for Dr. Joyce Banda’s policies even at a time when some people were protesting the effects of austerity measures. Christine Lagarde commented: “During my discussions with Malawi’s leaders, I congratulated President Joyce Banda on the bold economic policies of her administration, including the liberalisation of the foreign-exchange market. I welcome


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Introduction

HE Dr Joyce Banda, President of the Republic of Malawi, at the 102nd Session of the International Labour Conference in Geneva

the President’s efforts to address unforeseen challenges through her continued commitment to economic reforms. Malawi has already made significant progress in addressing the serious imbalances that were hampering economic growth just a few months ago. Malawi must stay on course, while putting in place social-protection programs to alleviate the impact of the adjustment measures on the poorest households. Continued assistance from development partners will be essential to support the ongoing reforms. Looking ahead, we at the IMF will continue to support Malawi with policy advice, financial assistance under the program supported by the Extended Credit Facility, and technical assistance and training to strengthen capacity in macroeconomic management.” Noting that she is optimistic about Malawi’s future, she added: “Malawi is half across the river, and the other bank is within reach.”

Getting help from international organisations is essential for Malawi’s economic development. Recognising the burden austerity measures have placed on the population in a country where poverty is endemic, the President commented in a recent documentary: “I had to get on course with the IMF and devalue the kwacha by 40%. I am grateful for the portion of the IMF funds that goes towards cash transfers, which will help cushion the shock that devaluation has brought about.”

Principled, internationally oriented leadership

that she is willing to stick by her principles even when doing so creates difficulties with some of her neighbours. Malawi was scheduled to host the African Union summit last year, a prestigious role for a poor nation to take on, but President Joyce Banda protested against allowing Sudan’s leader, Omar al-Bashir, to attend the summit because he has been indicted by the International Criminal Court in The Hague for crimes against humanity. As a result of President Joyce Banda’s position, the summit was moved to Ethiopia. Omar al-Bashir participated; Dr. Joyce Banda did not. She sent the Vice President Hastings Khumbo Kachali.

The President has also reached out to other countries at the diplomatic level, for example, by welcoming back the British ambassador after former President Mutharika had expelled him. And, President Joyce Banda has shown

In fact, protecting human rights is one of President Joyce Banda’s guiding principles. Concerning her opposition to anti-homosexuality laws, she says: “Under Bingu wa Mutharika I was marginalised, scandalised, humiliated and

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he even tried to kill me. So, having been a victim of dictatorship myself I want to do all I can to protect human rights. Human rights and good governance are vital to a democratic society.”

Supporting human rights and good governance As part of her commitment to human rights, President Joyce Banda strongly supports a more prominent role for women in Malawi’s economy and government. In addition to promoting education for girls through her own foundation, she advocates start-up assistance for female entrepreneurs and better healthcare for mothers and children. Speaking at a meeting of the Aspen Global Leaders Council recently, the President commented: “No woman should die giving birth to another life. It will take political will. And that starts with me.” The President has also demonstrated her no-tolerance policy on corruption

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in government. She says: “We have to strengthen our institutions, and that means I have had to sack a lot of people who were undermining them through corruption or nepotism. I have set up a special monitoring unit within the presidency to watch out for corruption. We also have to ensure that aid is properly spent.”

“No woman should die giving birth to another life. It will take political will. And that starts with me.” Chairperson of SADC Dr. Joyce Banda has drawn even more international attention to Malawi and her administration since she became the new Chairperson of the Southern

SADC Chairwoman President Joyce Banda gives her opening remarks during the AIDS Watch in Africa meeting

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African Development Community (SADC). SADC, a key driver of regional development, grew out of the Southern African Development Coordination Conference (SADCC), held in 1980 in Lusaka, Zambia to coordinate regional development projects in order to lessen dependence on South Africa, which was then under apartheid. Malawi was one of the nine founding member states of SADCC. In 1992, SADCC was transformed from a coordinating conference into a true development community whose principles are outlined in a treaty signed by regional leaders. SADC member states in addition to Malawi are Angola, Botswana, the Democratic Republic of Congo, Lesotho, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, United Republic of Tanzania, Zambia and Zimbabwe. Madagascar was suspended. The organisation is headquartered in Gaborone, Botswana.


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Introduction

President Joyce Banda gave an impassioned speech when she attended her first SADC meeting as chairperson. Defining her priorities for southern Africa, she said: “Millions of our women and men struggle to survive in conditions of poverty, deprivation and underdevelopment. They are hungry for food, though no fault of their own. They die from preventable diseases, through no fault of their own. They die giving birth to another life, through no fault of their own. They are raped in their homes and communities. They suffer violence at home, at school, and in their communities, through no fault of their own. Many of them have lost their dignity, through no fault of their own. These are the SADC citizens who pay taxes. These are SADC citizens who vote. These are our citizens and our neighbours. They work for us and we work for them.” In a post to her Facebook page on August 18, President Joyce Banda commented on the discussions which followed her SADC speech. She said: “Only when we have security can we ensure that our people can fulfil their potential. We therefore reiterated our commitment, as a regional body, to remain actively engaged and to encourage and mediate solutions that uphold the principles to which we have all committed.”

Focus on agriculture Defining her priorities for the region’s economic development, President Joyce Banda puts the focus on agriculture. She says that at the recent SADC meeting, members “focussed on the food security and nutrition challenges facing the region and agreed that this will be a key aspect of our work for 2013-14, under the chosen theme of ‘Agricultural Development and Agro-Industries: Key to Economic Growth and Poverty Eradication’.” She adds: “I am encour-

aged by the unanimous support of my fellow leaders in recognising the importance of this issue.” President Joyce Banda wants SADC governments to pursue policies that will benefit the general population, particularly the poor. She says: “When I took the helm as chairperson of SADC, I emphasized that I want SADC to work with the people, for the people. I am confident that the discussions we have had during the summit have laid a solid foundation to make this a reality.”

“The vision I have for this country to socially and economically empower people is not just by words but taking action, taking the dream to the houses of our people and making an impact on people’s lives.” Loyal following While President Joyce Banda’s economic reforms have been hard on Malawi’s population and have resulted in rapid inflation and other problems, the President believes that the country is on the road to recovery. In spite of the challenges Malawi still faces, the President has already won a loyal following thanks to her focus on democratic governance, rights for women and the disadvantaged, programmes to benefit rural residents, and anticorruption measures. She is seen as the symbol of a new kind of forwardthinking African leaders, and her re-

election when the next presidential elections are held in 2014 would demonstrate African voters’ confidence in leaders willing to make hard choices in order to achieve long-term benefits for their constituents. In a recent interview, Dr. Joyce Banda is very positive about her country’s future. She says: “The short-term measures of the economic recovery plan have successfully addressed issues such as the fuel crisis and foreign-exchange shortages which we experienced during the economic crisis at the time I took over the presidency. Our focus now is on the medium to long-term programme of restructuring our economy, in order to insulate ourselves from future external shocks.”

Taking action, promoting unity President Joyce Banda believes her country will surmount its problems, thanks to its people. She explains: “Malawi is known as the ‘Warm Heart of Africa’ not just because of our wonderful climate but also because of the character of our peace-loving, friendly people. Malawi has never experienced conflict or ethnic strife. Throughout everything, despite our challenges, we have lived and worked together peacefully. I welcome foreign investors and visitors to join us on our journey to transformation.” The Mudzi Transformation Trust is one of President Joyce Banda’s most recent projects. It brings together 20,000 village leaders who are encouraged to put aside their differences and work together to solve their shared problems. In a posting to her Facebook page on September 2, Dr. Joyce Banda commented on the initiative and summed up her own mission as President. She said: “The vision I have for this country to socially and economically empower people is not just by words but taking action, taking the dream to the houses of our people and making an impact on people’s lives.”

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Vice-President Positive about New Development Strategy Vice-President, Right Honourable Khumbo Kachali, discusses Malawi’s recent progress and goals for the future.

© Felix Washon Mana

European Times: Do you believe Malawi’s new development strategy will succeed? Khumbo Kachali: Unlike our previous development strategy, which began well but failed for political reasons and caused the British High Commissioner and our donor partners to withdraw, the current one launched by the new government has the blessing of our global partners. This government has announced five priorities and three tangible goals for each sector to reach by 2014. Thanks to H.E. Joyce Banda’s leadership, we believe our programmes will work. European Times: How important are international funders and foreign investors to Malawi? Khumbo Kachali: They are very important. Our economy is agriculture-based and for the past two to three years, our main cash crop, tobacco, did not do well. We need support to reinvigorate our economy, improve the lives of our people, and cope with challenges like fuel costs and lack of foreign-exchange revenues. We believe we are now seeing the light at the end of the tunnel. The tobacco market is improving and should boost our foreign exchange, but we need investment in our healthcare and education programmes and in projects to determine the potential of our natural resources, for example in the mining and oil sectors. Our goal is to move from aid to trade with the help of investors.

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Tekst onder foto: Tea plucking at the Thyolo Tea Estates

Hon. Khumbo Kachali, Vice-President

European Times: What is the government doing to attract more FDI? Khumbo Kachali: We have streamlined the process of registering a business and are revising other regulations in many areas to meet international standards, upgrade the business climate and attract investors. We are also working to improve Malawi’s international image and to make the world more aware of opportunities here. European Times: How will Malawi’s economy be different five years from now? Khumbo Kachali: Our foreignexchange problems will be history,

we will have made great progress in improving our roads, and I hope we will be producing cigarettes from our own tobacco. European Times: What is your message to international investors? Khumbo Kachali: We want to attract investors who will produce the best possible products here in Malawi. This country has so much unrealised potential, from Lake Malawi to our mineral resources. Malawi has many unique features, great weather and the most welcoming people in the world as well as the only female president in Sub-Saharan Africa. Malawi is truly the warm heart of Africa


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Introduction © Kaya Mawa

Likoma Island

The Warm Heart of Africa The Republic of Malawi (known as the ‘Warm Heart of Africa’ for its welcoming people) is a landlocked country strategically located in southeast Africa which is working hard to achieve economic growth and provide a better quality of life for its people. Malawi is bordered by Zambia to the northwest, Tanzania to the northeast, and Mozambique on the east, south and west. With more than 15 million people living in an area covering only 118,484 sq km, Malawi ranks as one of Africa’s most densely populated countries, and its population is growing. It is also one of the least developed: around 90% of the population lives in rural areas and agriculture is the mainstay of the economy. In addition, around half of Malawi’s people live below the poverty line, and the country has one of the lowest per capita incomes in the world.

Reform programmes making progress In spite of these challenges, Malawi has been making great strides forward over the past few years. According to the World Bank, life expectancy in Malawi has risen while adult HIV prevalence has dropped, educational systems and environmental conditions have improved, and the economy

is increasingly based on trade instead of international aid. Malawi has also boosted its agricultural output and is now a net food exporter. Malawi has proven its ability to maintain a stable political system. Colonised by Portugal and then by Britain, Malawi (then called Nyasaland) joined with Northern and Southern Rhodesia to form the Federation of Rhodesia and Nyasaland in 1953 and became an independent republic in 1964. In 1994, Malawi held its first multiparty elections and introduced a constitution the following year. Current President Joyce Banda has positioned herself as a new kind of African leader, one who serves the common people of her country. Stepping up the fight against corruption, she is also a strong supporter of gay rights and gender equality. The Joyce Banda government is working to stimulate the growth of the private sector, improve educational and healthcare services, and attract local and foreign investors. With the support of the IMF and other international organisations, President Joyce Banda has instituted far-reaching economic reforms, including devaluing the kwacha, which are beginning to bear fruit. She explains, “I have taken difficult decisions that could have destroyed my political career, because I knew that if we had not taken this route, Malawi would not be on the path to recovery.”

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MALAWI

EU Ambassador Confident about Malawi’s Future Alexander Baum, EU Ambassador to Malawi, discusses the EU’s programmes and projects in Malawi. European Times: Can you describe the relations between the EU and Malawi? Alexander Baum: The European community has partnered with Malawi for over 50 years, supporting the country in its development process. The EU works with Malawi through maintaining positive political and economic relations; trade, technical and financial cooperation; and civil-society dialogue. We are committed to working closely with the Malawi government and providing necessary support. European Times: How did the election of President Joyce Banda affect relations between the EU and Malawi? Alexander Baum: When Dr. Joyce Banda was appointed President, she faced a lot of challenges. President Mutharika implemented policies that were detrimental to the progress of the nation. Some policies, including setting the exchange rate and prices for key goods such as tobacco and cotton, put the country into a downward spiral. Then President Joyce Banda took office and began to move the Malawi economy in the right direction. The EU provided budgetary support at this crucial time. President Joyce Banda has instituted policies to ensure macroeconomic stability, is open to foreign investors, and understands the need to work in close cooperation with key

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Alexander Baum, EU Ambassador to Malawi

stakeholders, the global community and regional leaders. European Times: What are the EU’s main goals for Malawi? Alexander Baum: Our main goal has always been to help the country to become prosperous and to be a responsible member of the international community. The EU has a presence throughout Malawi and has helped rural communities to diversify agricultural production. We are a constant feature known to the people of Malawi. We have provided macro-economic support for the government and our engagement with the National Initiative for Civic Education has strengthened the democratic process from the ground up. We have accompanied Malawi’s

democratisation process for the past two decades and have sent Election Observation Missions several times. The EU has also supported various infrastructure projects in Malawi, including road development. European Times: What is your personal message to potential investors? Alexander Baum: I am optimistic about Malawi’s future. This country has enormous potential, and even though a lot remains to be done, the current President has done a good job in putting Malawi on the global map and implementing policies which support economic growth and investment. Malawi is open to western values, and the people are warm and friendly.


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Introduction

Two Cities, Two Key Roles to Play © Ministry of Tourism

Lilongwe city centre

Malawi’s two major cities are Lilongwe, the official capital, and Blantyre, the country’s business hub. Both cities are growing rapidly and each has its unique attractions.

Geography helped forge Lilongwe’s role as Malawi’s centre of government. Set in the middle of the country, the city was also the home of Malawi’s first president, Hastings Kamuzu Banda, who declared Lilongwe the new capital when Malawi gained its independence. With a population of around 780,000, Lilongwe is two cities in one. It has an Old Town, set at the crossroads of major highways, which is always filled with street vendors selling everything from fresh strawberries to auto parts. Lilongwe’s City Centre district, in contrast, is a modern, much more affluent area where government offices as well as many banks and commercial ventures can be found. Kamuzu International Airport outside the city offers flights to Blantyre as well as to Johannesburg, Addis Ababa, Nairobi and other destinations.

Leading base for business Blantyre, Malawi’s main business centre, was founded in what is now southern Malawi by European settlers in 1876. It is the oldest city in southern and eastern

Africa. The original settlers chose the location because of the area’s fertile soil and because it was a natural base for trade between Lake Malawi and the Zambezi River valley. The city was named for the birthplace in Scotland of famed British explorer Dr. David Livingston. Today, Blantyre is Malawi’s leading commercial, banking and industrial crossroads. It is linked closely with its sister city, Limbe, and with nearby Zomba, Malawi’s former capital. Blantyre has a population of around 730,000, including around 25,000 expatriates from all over the world. The city is the home of Malawi’s Supreme Court, the stock exchange, the Malawi Broadcasting Corporation, many private-sector enterprises, several hotels, and Malawi’s biggest shopping mall, among other leading institutions. Blantyre is a green, picturesque city with a pleasant climate and many colonial buildings. It is surrounded by mountains and by the Michiru Mountain Conservation Area. Blantyre contains eight designated industrial areas, of which Makata and Limbe have been developed for heavy industry and are now home to around 30 companies. Blantyre is connected to Mozambique and Zambia via the Central East African Railway. The city is also served by Chileka International Airport, the headquarters of national airline Air Malawi, and by ferries operating on Lake Malawi. Both Blantyre and Lilongwe have crucial roles to play in keeping Malawi’s economy on the move.

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US Ambassador Highlights Malawi’s Promising Future Jeanine Jackson, US Ambassador to Malawi, cites the 50-year partnership between the two countries and discusses Malawi’s exciting development potential.

Jeanine Jackson, US Ambassador to Malawi

European Times: How would you describe the relationship between the US and Malawi? Jeanine Jackson: The U.S. has been partnering with Malawi and supporting its development for over 50 years. For example, the Peace Corps is celebrating its 50th anniversary in Malawi this year, and the development agency USAID has also been active here for over 50 years. US funding for Malawi has been growing particularly strongly over the past five years and more than doubled between 2008 and 2012, rising from €82.2 million (US$110 million) to

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€189 million (US$253 million). In fact, the US provided over €747.3 million (US$1 billion) in funding for Malawi in this five-year period, and this is in addition to the support Malawi received from institutions that the US- funds like World Bank, the IMF, and Global Fund. European Times: Why is international support for Malawi growing? Jeanine Jackson: Private investment and donor funding was hindered by the policies of former President Bingu wa Mutharika. However,


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Introduction

President Joyce Banda has taken steps to improve the governance and the investment climate thus creating much more confidence in Malawi’s future. Moreover, the IMF has been bending over backwards to support Malawi through an extended credit facility. In addition, other development partners have renewed budget support. President Banda is showing a tremendous amount of resolve when it comes to holding government officials accountable and reforming her civil service into a more productive and transparent body. Most importantly, the government of Malawi has finally prioritised private-sector-led growth as being its linchpin to development. European Times: What are some of the most important US Government projects in Malawi today? Jeanine Jackson: One key project is ‘Feed the Future’, the US government’s global hunger and food-security initiative. One of the Malawi government’s national policy priorities is to enhance agricultural production and nutrition. Today, ‘Feed the Future’ is complementing President Banda’s efforts to address food security, nutrition and poverty reduction by focussing on value-chain development in the agriculture sector. Secondly, the Millennium Challenge Corporation (MCC) $350 million compact is a single-sector program designed to revitalise Malawi’s energy sector and improve the availability, reliability, and quality of the country’s power supply. One of the keystones of this initiative is infrastructure development, focussing

on the rehabilitation, upgrading and modernisation of the national power system. The government of Malawi has committed to investing in additional generation capacity by completing the construction of new hydropower plants. The second MCC keystone is to provide support for the government of Malawi’s agenda for policy reforms in the power sector. To support this initiative, the MCC will provide technical assistance to the Electricity Supply Corporation of Malawi, the Malawi Energy Regulatory Authority, and the Ministry of Natural Resources, Energy and the Environment. European Times: Can you highlight some particularly highpotential investment opportunities in Malawi today? Jeanine Jackson: A couple of sectors really stand out from the rest. One of them is value-chain investment. Malawi is an agricultural country with a heavy focus on the production of tobacco, coffee, tea and cotton. These products are vulnerable to world price fluctuations and Malawi exports these products in raw form and therefore does not benefit from value addition. As investors are certainly aware, there is money to be earned in adding value to raw materials and investing in products that are price inelastic. Therefore, I would strongly suggest that investors look into adding value to Malawi’s agricultural products, particularly fruits, vegetables, and legumes. These can also be sold to the huge regional market. The infrastructure sector is also ripe for further development. Thanks to its

strategic location in the region, Malawi has the opportunity to be a transport hub connecting Tanzania, Mozambique, Zambia and Zimbabwe. To make the most of this advantage, the country needs to improve its transport infrastructure. There are quite a few exciting road and rail projects underway, such as the M1 highway and the railway running across Malawi from Tete to Nacala in Mozambique. An inland port along that route would greatly facilitate regional trade and internal transport of goods. Finally, Malawi’s tourism sector is untapped. Malawi has gorgeous attractions such as Lake Malawi and Nyika Plateau in the north, and there are a lot of opportunities to develop those areas. However, before the tourist sector can take off, Malawi needs to adopt “open skies” and improve services such as health, banking, and hospitality. I would note that the government has made significant reforms in its publicprivate-partnership processes and we will see more PPP opportunities for investors to come. European Times: What is your personal message to potential investors and visitors? Jeanine Jackson: Malawi is on the right track to sustainable growth. International development partners and private investors have a cautiously optimistic view of Malawi going forward. We think that as long as Malawi sticks to its reforms and continues to be proactive in facilitating private sector-led growth, this country can look forward to a very promising future.

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Embassy in Brussels Serves as Gateway to Malawi Strengthening global ties

The Embassy of the Republic of Malawi in Brussels is at the heart of European economic diplomacy. The Mission serves as Malawi’s Embassy for Belgium, France, Italy, Luxembourg, the Netherlands, Switzerland and Monaco. In addition, the Embassy is the home of Malawi’s Permanent Mission to the EU and other multilateral institutions based in these countries.

The Embassy upholds Malawi’s foreign policy, which focuses on promoting and maintaining sound bilateral and multilateral relations with partners in the countries of Accreditation. As Ambassador Ndisale points out, “The Embassy is cultivating mutually beneficial relations with all our development partners.” Strengthening ties between Malawi and the EU is a key goal for the Embassy. In addition, the Embassy endeavours to ensure that Malawi’s partnership with Flanders grows from strength to strength.

Dr. Brave Ndisale, Malawi’s Ambassador for Belgium, France, Italy, Luxembourg, the Netherlands, Switzerland and Monaco.

The Embassy also handles consular services and is involved in humanitarian missions. It provides essential information for potential tourism visitors and investors in Malawi. Dr. Brave Ndisale, Ambassador, points out that the Embassy offers a wealth of useful information. She says, “Through our Embassy and its website you can get a flavour of what the Mission is all about and will put you in the light of the varied assignments we are thriving to achieve. Our aim is to facilitate and allow every visitor to be part of what is happening in our beautiful country, Malawi.” Furthermore, the Embassy strives to strengthen its outreach to the critical mass of Malawians in the Diaspora.

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An important role for the Embassy is to encourage foreign investment in Malawi and to promote the country’s tourism appeal. Ambassador Ndisale says, “In a true spirit of partnership, the Embassy’s primary focus is to bring to the fore the investment opportunities and touristic attractions in Malawi, facilitating development support for major programmes being undertaken by the government as well as assisting in boosting Malawi’s share of global trade.” All told, the Embassy endeavours to contribute to the advancement of Malawi’s economic, political and social interests. To this effect, the Ambassador says, “We also seek to advance, promote and protect the interests of Malawi so as to improve the quality of life of its citizens and contribute towards the ultimate goal of poverty eradication while promoting Malawi as an active partner in the global economy.”


Government


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Democratic Government Spurring on Development The Republic of Malawi, which gained its independence from the UK in 1964, has a democratic, multiparty government based on a Constitution ratified in 1994.

The government is led by a democratically elected President, who is Chief of State and Head of Government. The President, who is seconded by a Vice President, appoints a 36-member Cabinet. The legislative branch of government is the unicameral National Assembly, with 193 seats. The judicial branch includes the Supreme Court of Appeal, the High Court (whose chief justice is appointed by the president), magistrate’s courts, and judges appointed by the Judicial Service Commission. Malawi’s legal system is based on English law and customary local laws.

Key leaders Malawi’s current president is HE Dr. Joyce Banda, who served as Vice President under former President Bingu wa Mutharika and assumed the presidency under the terms of the Constitution when he died in April 2012.

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Born in 1950, President Banda earned a bachelor’s degree in social and gender studies from Atlantic National University (US). She previously served as Malawi’s Minister of Gender, Child Welfare and Community Services and as Minister of Foreign Affairs as well as Vice President. Formerly a leader in the Democratic Progressive Party (DPP), she formed the People’s Party (PP) in 2011. She established the National Association for Business Women in 1990, the Malawi branch of the US Hunger Project in 1998, and the Young Emerging Leaders Network in 2000. She also founded the Joyce Banda Foundation, which provides integrated rural-development services to over 250,000 beneficiaries. She is a founding member of the African Federation of Women Entrepreneurs, the Council for the Economic Empowerment of Women in Africa, and the Americans and Africans Business Women’s Alliance. She also served as Vice President of Micro-Fin-Africa and as a member of the Executive Advisory Committee of the United Nations Development Fund for Women (UNIFEM). Among her many awards, she has received the Hunger Project Africa prize, the UNFPA International Award for Health and Dignity of Women, and the Woman of Substance Award from the African Women Development Fund. In 2011, Forbes Africa named Joyce Banda Africa’s Third Most Powerful Woman.


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Government

Malawi’s Vice President is Right Hon Khumbo Hastings Kachali (since April 2012). As Vice President he is also responsible for National Relief and Disaster Management, National Public Events, Central Government Stores, the Department of Printing Services and the Electoral Commission. He was the Vice President of the DPP party during the Muthalika administration but left the DPP for the PP. He is a highly experienced leader who previously served as Minister of Industry, Minister of Home Affairs and Internal Security, Minister of Health, Minister of Transport and Public Works, and Minister of Youth and Development.

He formerly served as Deputy Minister of Natural Resources, Energy and Environment, and as Minister of Justice. He is a member of the Royal Institute of Chartered Surveyors (UK).

Elections

Dr. Lucious Kanyumba, the new Minister of Education, Science and Technology, heads Malawi’s education and research activities. He will oversee the implementation of Malawi’s new National Education Policy.

The president is elected by popular vote for a five-year term and is eligible for a second term. The next presidential elections will be held in May 2014. The members of the National Assembly are also elected by popular vote to serve five-year terms, and the next legislative elections will also be held in May 2014.

Government Minister of Economic Planning and Development Ralph Pachalo Jooma, Minister of Economic Planning and Development, was appointed in March 2013. He formerly served as Deputy Minister of Finance and worked as an auditor at PricewaterhouseCoopers, among other professional posts. He oversees Malawi’s economic-development strategies and programmes.

Minister of Lands and Housing Henry Phoya, who heads efforts to ensure best-quality land use and housing development, formerly served as Minister of Justice and as Attorney General as well as chairperson of the parliament’s Legal Affairs Committee.

Minister of Education, Science and Technology

Minister of Gender, Children and Social Welfare Mary Makungwa, the People’s Party Director of Women, is the new Minister of Gender, Children and Social Welfare. She heads Malawi’s programmes to support services for women and children as well as general social services.

Minister of Justice and Constitutional Affairs Fahad Assani, Malawi’s new Minister of Justice, oversees the country’s legal system. He recently launched an initiative to recover money stolen by corrupt former officials and has vowed to track down every penny of these funds.

Minister of Finance

Minister of Agriculture and Food Security

Dr. Maxwell Mkwezalamba, the new Minister of Finance, oversees the country’s financial policies and programmes. An economist, he has held many prestigious posts, including Commissioner for Economic Affairs for the African Union Commission and various positions with the Malawi Confederation of Chambers of Commerce and Industry, the World Bank, the United Nations Development Programme (UNDP) and others.

Agriculture economist Dr. James Munthali, Minister of Agriculture, oversees policies and strategies for Malawi’s most important economic sector.

Minister of Foreign Affairs and International Cooperation Ephraim Mganda Chiume, Minister of Foreign Affairs, guides Malawi’s foreign policy and international relations.

Minister of Transport and Public Works Mohammed Sidik Mia, Minister of Transport and Public Works, oversees Malawi’s infrastructure-development activities. He previously served as Deputy Minister of Agriculture, Irrigation and Food Security; Deputy Minister of Mines, Natural Resources and Environment; Deputy Minister of Transport and Public Works; and Minister of Water Development and Irrigation.

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MALAWI

Minister of Water Development and Irrigation Anita Kalinda, the new Minister of Water Development and Irrigation, handles water-resources projects, including overseeing the implementation of Malawi’s new Water Resources Bill.

Minister of Information and Civic Education Brown Mpinganjira, the new Minister of Information and Civic Education, previously served as Malawi’s Minister of Foreign Affairs, among many other high-ranking government posts. He oversees information and civic-education projects.

Minister of Home Affairs Uladi Mussa, who oversees activities related to domestic issues, is known for promoting change under the previous administration.

Minister of Local Government and Rural Development Rachel Mazombwe, the new Minister of Local and Rural Development, heads the government’s efforts to decentralise through encouraging administration by local councils. She also oversees Malawi’s rural-development initiatives.

Minister of Energy Ibrahim Matola, Minister of Energy, heads programmes to develop Malawi’s energy sector.

Minister of Industry and Trade Sosten Gwengwe, appointed Minister in February this year, says that his top priority is to foster rural industrialisation.

structure and as Minister of Environment and Climate Change.

Minister of Labour Grace Maseko, the new Minister of Labour, heads efforts to promote job creation.

Minister of Defence Ken Kandodo, Minister of Defence, heads Malawi’s defence services. He formerly served as Minister of Finance and as Chairperson of the Lilongwe Water Board and the National Food Reserve Agency.

Minister of Mining John Bande, Minister of Mining, oversees the development of Malawi’s mining industry. He formerly served as Minister of Trade and as Minister of Housing.

Minister of Disability and Elderly Affairs Rachel Kachaje, the new Minister of Disability and Elderly Affairs, oversees programmes to benefit aging and disabled members of the population.

Minister of Youth and Sports Enock Chakufwa Chihana, Minister of Youth and Sports, oversees programmes to integrate young people into the economy and to promote sports.

Minister of Environment and Climate Change Management Halima Daud, Minister of Environment and Climate, previously served as Deputy Minister of Health.

Minister of Health

Minister of Tourism and Culture

Catherine Gotani Hara, Minister of Health, oversees Malawi’s healthcare policies and projects. She previously served as Deputy Minister of Transport and Public Infra-

Moses Kalongashawa, the new Minister of Tourism, is working to ensure the sustainable development of Malawi’s high-potential tourism industry.

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• World Bank a Long-Term Partner • UNDP Reports Significant Progress Being Made • IMF Supportive of Government’s Economic Recovery Plan

International Organisations

“The economic recovery plan calls for diversification, which should create new investment opportunities.” Sandra Bloemenkamp, Country Manager World Bank


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MALAWI

World Bank a Long-Term Partner Sandra Bloemenkamp, Country Manager for the World Bank in Malawi, outlines the bank’s projects and goals. European Times: What are the World Bank’s priorities in Malawi? Sandra Bloemenkamp: The World Bank works very closely with the government to support the use of development resources effectively and accountably to achieve Millennium Development Goals and the government’s growth strategies. The World Bank has been a partner of Malawi since 1964, and we have commissioned around €770 million in aid for Malawi’s government to help it reach its goals. Our priorities are economic growth, infrastructure development, regional education and effective governance.

Tekst onder foto: Tea plucking at the Thyolo Tea Estates

European Times: What are some of the challenges? Sandra Bloemenkamp: Overdependence on agriculture creates vulnerability. Malawi’s growth was too narrowly based to be inclusive, and has not reduced poverty, especially in the rural areas where most people live. In short, the economy was not working for the people. It is important that Malawi’s economy becomes more diversified and that the current reforms remain in place. We also want to make sure that the focus is not only on achieving economic growth, but also on gender equality and poverty eradication. European Times: How is the World Bank supporting Malawi’s trade activities? Sandra Bloemenkamp: The World Bank and the United Nations Development Programme were key sponsors of Malawi’s National Export Strategy launched last year, and the World Bank is assisting the government in other areas to attract more business and investments into Malawi. European Times: What is the World Bank’s assessment of the government’s economic recovery plan? Sandra Bloemenkamp: Given the economic crisis Malawi experienced, the recovery plan is much needed to stimulate the economy and alleviate challenges. Of course

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Sandra Bloemenkamp, Country Manager

there will be short-term pains, such as the effects of currency devaluation, but if Malawi remains on track, its current policies will provide long-term benefits. To harness these benefits successfully, Malawi must ensure that the key fundamentals are in place, such as education, welfare and social development. European Times: What does Malawi offer foreign investors? Sandra Bloemenkamp: The economic recovery plan calls for diversification, which should create new investment opportunities beyond agriculture. The government needs to improve the business climate by alleviating issues such as excessive bureaucracy, a lack of transparency, and other stumbling blocks. The newly formed Malawi Investment and Trade Centre (MITC), a one-stop shop for investors, is a big step in the right direction. There are plenty of opportunities for investors in Malawi.


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International Organisations

UNDP Reports Significant Progress Being Made Naomi Kitahara, the United Nations Development Programme Acting Resident Representative in Malawi, discusses the UNDP’s priorities for Malawi’s development. European Times: What is the role of the United Nations Development Programme in Malawi? Naomi Kitahara: The UNDP’s current programme in Malawi covers the period 2012 to 2016. We are working closely with the government of Malawi in three key areas. The first of these is democratic governance, which includes providing support to the government in preparing for elections, strengthening the capacity of parliament concerning its oversight functions, providing support for a democratic consolidation programme, assisting the Centre of Multiparty Democracy to strengthen inter- and intra-party democracy, and supporting Malawi’s national human rights commission. The second area concerns capacity development and poverty reduction, which includes helping the Ministry of Planning as it formulates development strategies, providing assistance for rural and community development, supporting the effective use of international aid, and working on private sector development, gender and HIV issues. The third area involves our support for Malawi’s climate-change, environmental-protection and disaster-management programmes. European Times: What progress has been made so far? Naomi Kitahara: The government has developed an Economic Recovery Plan and a number of new key policies, including inclusive growth and exports. These policies have been debated and then launched successfully with the participation of different parties and partners. This positive cooperation between the government and civil society and between the public and private sectors is a big step forward. The private sector is enthusiastically supporting the government’s new national export strategy, for example. We have confidence that the policy frameworks launched in December 2012 will work. Malawi has demonstrated that it is moving in the right direction. Now the challenge is implementation.

Naomi Kitahara, United Nations Development Programme Acting Resident Representative

European Times: What is the UNDP doing to support the implementation and monitoring of these policies? Naomi Kitahara: We are working with the government to promote results-based management, basically looking at the whole implementation cycle, from planning to monitoring and evaluation. In partnership with the government, we are setting the results, impact and targets we want to achieve as well as fostering longer-term capacity-building. European Times: What are Malawi’s biggest challenges? Naomi Kitahara: Achieving UN Millennium Development Goals concerning gender equality, poverty reduction, education and health is a huge challenge. The UNDP is assisting the government in accelerating this process. European Times: What is your message to international investors? Naomi Kitahara: The time is right to look into opportunities in Malawi!

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MALAWI

IMF Supportive of Government’s Economic Recovery Plan Ruby Randall, IMF Representative in Malawi, discusses the IMF’s priorities for the country’s economic development. European Times: What is the IMF’s mission in Malawi? Ruby Randall: Malawi joined the IMF in 1965. The IMF is here largely in an advisory capacity, to help the authorities formulate policies that promote macroeconomic stability and good economic governance. In addition to providing policy advice, the IMF also provides technical assistance and helps with capacity building in areas that are key to strengthening macroeconomic performance, and provides financial support in the form of balance of payments assistance within the context of the existing program under the Extended Credit Facility (ECF). The current ECF program aims to help the authorities to achieve macroeconomic stabilisation and create an enabling environment for private investment and more inclusive, diversified growth, through the implementation of policies that promote Malawi’s enhanced external competitiveness. European Times: What are some of Malawi’s recent economic successes? Ruby Randall: Malawi has suffered from a chronic external imbalance for some time, manifested by a large trade imbalance and a severe shortage of foreign exchange. The new administration took a number of bold economic measures upfront to correct the exchange rate misalignment and

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Ruby Randall, IMF Representative in Malawi

create the right incentive for successful export promotion and curtailment of nonessential import demand. In the near term, Malawi’s economic-recovery plan aims to achieve macroeconomic stabilisation through the implementation of appropriate market-based policies, and over the medium term address various supply-side bottlenecks (in transportation and energy for instance) and other structural impediments to growth. The IMF supports continued implementation of a coherent package of policy measures, which included initial devaluation of the currency and continued exchange rate flexibility, and a scaling up of social protection programs for the poor and vulnerable with the assistance of other development partners.

When the administration came into office, both the country’s economic performance and outlook were bleak and characterised by: ●

● ● ●

a shrinking official foreign exchange market and international reserves that were perilously low; a dismal outlook for growth; mounting inflationary pressure; and a persistent and widening fiscal deficit financed by increasing recourse to net domestic borrowing.

To date, successful implementation of the ECF program has resulted in the


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International Organisations

following important achievements: ●

● ●

Continued commitment towards market-based reforms has helped to restore both investor and donor confidence in the policy stance of the Malawian authorities. Elimination of fuel shortages and fuel queues. Shrinkage of the black market premium from over 80% to just 5% and near elimination of the foreign exchange black market – this has been one of the most enduring reforms. Restoration of sizeable donor flows, which have facilitated a sizable scaling up of social spending (by up to 5 percentage points of GDP); Increased availability of some international credit lines, which has largely benefited the private sector by facilitating the purchase of imported inputs; A sizeable pickup in industrial capacity utilisation, due to the increased availability of fuel, foreign exchange, and essential inputs.

Currently, the IMF program remains on track and continues to serve as a positive signal to both donors and investors that the Malawian authorities remain committed to the pursuit of market-based reforms. European Times: What are some of the challenges for Malawi as it works toward sustained economic growth? Ruby Randall: Going forward, the main challenge in the near term

“The authorities’ strategy aims to achieve more job creation and inclusive growth in order to combat Headquarters building of the International Monetary Fund, Washington, D.C.

is to successfully stabilise both the exchange rate and inflation through continued adherence to prudent fiscal, monetary and exchange rate policies. Over the medium term, Malawi needs to address key supplyside bottlenecks and attract additional investment flows. The authorities’ Economic Recovery Plan and National Export Strategy aim to bring about more rapid structural transformation, by addressing key supplyside constraints in transportation and energy, and through measures designed to boost agricultural productivity and promote enhanced competitiveness of manufacturing, tourism and other key service sectors. The authorities’ strategy aims to achieve more job creation and inclusive growth in order to combat poverty and ensure that all the country’s residents, including the most disadvantaged, share in its prosperity. In addition, Malawi needs to strengthen its public financial management in order to promote greater public sector efficiency and accountability, and further develop its financial sector so as to promote enhanced financial inclusion and greater access to finance for productive purposes.

poverty and ensure that all the country’s residents, including the most disadvantaged, share in its prosperity.” European Times: What is your personal message to potential investors in Malawi? Ruby Randall: Malawi is on the path to economic recovery. Successful implementation of Malawi’s Economic Recovery Plan will help to bring about macroeconomic stability, sustained economic growth, as well as important socioeconomic development, including poverty reduction. Investment in Malawi is needed to help it achieve the goals that it has set for itself in the Malawi Growth and Development Strategy, and continued successful implementation of marketbased reforms within the context of the current ECF arrangement should help Malawi to achieve macroeconomic stability and lay a successful foundation for diversified, inclusive, and sustained growth.

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• Boosting Exports, Adding Value • Dynamic Organisations Spearheading Private-Sector Development • Far-Reaching Export Strategy

Business & Investment Opportunities

“Malawi is a number one destination for investment because so many market opportunities here remain untapped.” Hon. Sosten Gwengwe, Minister of Industry and Trade


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Business & Investment Opportunities

Ministry Launches New Export Strategy Hon. Sosten Gwengwe, Minister of Industry and Trade, discusses investment opportunities in Malawi. European Times: What are your ministry’s priorities? Sosten Gwengwe: The Ministry of Industry and Trade prioritises industry development and aims to facilitate foreign and domestic investment and trade. We want to eliminate constraints on trade, improve the business climate and support current institutional and legal reforms, including a licensing bill, a company’s act which will protect investors’ interests, and a new insolvency bill. We have also created the Malawi Investment and Trade Centre, a one-stop shop for investors. The government has instituted a free-market approach to energy prices and reforms to promote the stability of the economy. We have also launched a floating foreign-exchange policy to make foreign exchange readily available. As a result of these reforms, fuel prices have stabilised and the black market has collapsed. This ministry actively supports all reforms which will result in bringing more FDI to Malawi.

Hon. Sosten Gwengwe, Minister of Industry and Trade

there will be transparent and accountable incentives provided to investors in targeted sectors. These include tourism, mining, infrastructure, energy and agriculture. We encourage the production of seed-oil crops like sunflowers as well as sugarcane and value-added sugar products. We welcome investments in manufacturing as well as in transport and infrastructure projects. Incentives for investors include assistance in acquiring land, tax holidays, and attractive duties on imported heavy machinery.

European Times: What are some of the ministry’s current projects?

European Times: What progress has been made so far in increasing FDI?

Sosten Gwengwe: We have launched a new export strategy which prioritises a few clusters with particularly strong export potential and promotes valueaddition. Our export strategy complements the government’s economic recovery plan, which identifies specific sectors for investors. We also aim to establish processing zones where

Sosten Gwengwe: We now have a major railway project in partnership with Brazil that will greatly reduce transport costs and will provide connections to Mozambique. We also have energy projects underway with US partners, and the government’s new economic recovery plan and export strategy will certainly boost FDI.

European Times: What is your personal message to potential investors? Sosten Gwengwe: Malawi is a number one destination for investment because so many market opportunities here remain untapped. Malawi’s membership in SADC and COMESA means that in addition to the domestic market there is a huge regional market for Malawi’s products. In addition, the new government is committed to supporting trade and investment.

Makata Industrial Site Maunde Road P.O. Box 30662 Chichiri. Blantyre 3. Tel: +265 187 2220 Tel: +265 187 2519

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MALAWI

Universal Industries

Food-Products Leader a Benchmark in Manufacturing Sector Universal Industries has positioned itself as a key driver of Malawi’s economy and a benchmark in the country’s manufacturing sector. Established in 1957, Universal Industries began as a producer of a single type of biscuit and has grown over the years to become a major food manufacturer with over 1,500 employees and a diverse range of products. While local sales account for the majority of its revenues, Universal Industries is steadily expanding its exports to regional markets. The company is ranked Malawi’s leading producer and distributor of quality biscuits, confectionery, savoury snacks, baking ingredients, beverages and milk powder. Universal Industries produces many of Malawi’s top brands, including “Universal” biscuits, confectionery and potato crisps; “Zokoma” biscuits; “Kamba” snacks; “Njuli” coffee; “Nyika Springs” water; “Frooty” squash; and the newly launched “Nutri Gluco Phala (NGP)” porridge under the Sun Valley brand. With this new porridge, Universal Industries has diversified its product portofolio into nutritional foods in order to cater to the needs of consumers and support the government’s efforts to combat nutritional deficiencies through the “Providing Nutrition to the Nation” drive. Universal Industries has three manufacturing facilities in Blantyre and a beverage plant in Mzuzu as well as five warehouses throughout the country. The Mzuzu plant is also positioned to produce fruit beverages using locally grown fruit and has the potential to provide a significant boost to the local

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Strong commitment to Malawi’s economic development

Dinshi Amin, Chairman

economy. One of Universal Industries’ core strengths is its ability to distribute to all urban and rural areas nationwide as well as regionally with the versatile range of its commercial fleet. In addition to manufacturing, Universal Industries has its own farming operation which produces coffee, potatoes (including seed potatoes) and other crops. The company has vertically backward-integrated its processes with success and has made a major contribution to improving the value chains of the major crops with which it is involved. Universal Industries is currently working with a number of global partners and donors in various agricultural projects, including public-private partnerships. These partners include Irish Aid, the Bill and Melinda Gates Foundation through the CAVA project, the Business Innovation Facility of DFID, the International Potato Centre, the Ministry of Agriculture and Food Security, and the government of Malawi, among others. One of Universal Industries’ goals is to help promote small and medium-sized enterprises which can add value and contribute to economic growth in rural communities.

The company is committed to contributing to Malawi’s economic growth and to helping improve the lives of the country’s people. In addition to supporting a number of community-service initiatives, Universal Industries recently launched a project to process cassava sourced from over 7,000 smallholders and it already works with 850 smallholders who grow potatoes for the company. Universal Industries welcomes the chance to launch new projects with international partners. Dinshi Amin, Chairman, explains, “Malawi’s manufacturing sector has significant potential, and Universal Industries has a long history here. We also have modern equipment from Germany and the Netherlands and highly trained human resources. We are looking for international partners who can not only inject capital and help our company continue to grow but who can also help us create more ways to add value to Malawi’s products, for example a project with Kellogg to make cornflakes using corn grown in Malawi. Our mandate is to add value to Malawian crops from the soil to the supermarket shelf.”

Universal Industries Ltd P.O. Box 507 - Blantyre Tel: +265 187 0055 universal@unibisco.com www.universal.co.mw


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Business & Investment Opportunities

Far-Reaching Export Strategy

© Ministry of Industry and Trade

According to Sosten Gwengwe, Minister of Industry and Trade, “Malawi’s National Export Strategy (NES), launched in 2012, has been developed in a way that views poverty reduction, development and private-sector-led export growth as inextricably linked. Malawi’s development requires a significant increase in export capacity, while export-led growth needs to create jobs, reduce poverty and economically empower the poor, smallholder farmers, women and youths.” President Joyce Banda explains that the plan “provides clearly prioritised and phased plans of action in four key areas.” These are to develop export clusters that can complement Malawi’s exports of traditional products like tobacco and tea; improve the enabling environment for private-sector growth; develop institutions to support sustainable development; and address Malawi’s current skills gap. The far-reaching new strategy, which the government devised with the support of the UNDP, also covers financing, energy supply and distribution, land reform, transport infrastructure and support services for farmers.

Targeted agro-processing and manufacturing Sosten Gwengwe says that the new strategy identifies oil-seed and sugar-cane production and processing as well as general manufacturing as three “clusters that have the potential to equate to over 50% of Malawi’s exports by

2027, thereby complementing tobacco as a major export.” He adds, “The NES is critical in enabling Malawi to transform its economy away from low-value exports.” The strategy calls for establishing production facilities for a wide range of oil-seed products, including cooking oil, soaps, lubricants, paints, varnishes, flours, bio-fuel, animal feed, fertiliser, snacks and confectionery. Concerning sugar cane, the strategy promotes the production of high-value-added branded sugar and sugar products, including syrups, candies, sweetener, ethanol, spirits, cane juice, fertiliser, animal feed and cosmetics. In the general manufacturing sector, the NES identifies the production of beverages, other value-added agro-processing (including of dairy products and grains), assembly plants and the production of plastics and packaging as activities with particularly strong development potential. The NES also calls for efforts to strengthen other economic sectors, including mining, tourism, services and the production of tobacco and tea. To draw investment in these targeted sectors, the government has been streamlining investment processes, creating new services for investors and fostering programmes to upgrade Malawi’s human resources. Sosten Gwengwe points out, “The NES will provide stakeholders with a clear roadmap for what needs to be done to kick-start the productive economy.” He adds that the Malawi Investment and Trade Centre and the Small and Medium Enterprise Development Institute will play an important role in making the NES a success.

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MALAWI

© Ministry of Industry and Trade

Boosting Exports, Adding Value Malawi’s new Growth and Development Strategy 2012-2016 sets out ambitious goals for the country’s industry and trade. One priority is to find solutions for the trade deficit, which reached €69.8 million (MWK34 billion) in September 2012. The National Export Strategy launched last year focusses on stimulating investment in trade-oriented industries, boosting exports and adding value to made-in-Malawi products.

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Malawi is definitely open for business. Malawi’s President Joyce Banda commented at the UK-Malawi Trade and Investment Forum held in London in March, “Our goal is to take Malawi into the top 100 countries of the World Bank Doing Business rankings in the next two years. Our government is committed to transforming Malawi from an aid-dependent country into a vibrant trading and investment nation.” One positive sign is Crown Pharmaceuticals’ recent decision to establish a plant in Malawi. According to the Ministry of Industry and Trade, the project will save the country an estimated €27.4 million in pharmaceuticals imports per year. The government is working hard to attract more investments like this one. At a business forum in Lilongwe in April, Minister of Industry and Trade Sosten Gwengwe commented, “We know we need to offer competitive incentives as well as one-stop-shop services.”

Priority sectors The Malawi Investment and Trade Centre (MITC) singles out priority sectors with particularly strong investment potential: manufacturing, agriculture, tourism, mining and forestry. Investors in Malawi can establish joint ventures with local partners, start up projects on their own as Greenfield investments, or participate in Malawi’s ongoing privatisation process, which will eventually include electricity generation, transmission and distribution. The government strongly encourages public-private partnerships. To support these projects, Malawi needs investment in its vastly underdeveloped energy industry. The government is promoting renewable energies like solar power, biomass and hydropower as well as the production of fuels for urban and rural households. Agriculture will continue to dominate Malawi’s industrial and trade activities.


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Business & Investment Opportunities Sosten Gwengwe explains that oil-seed and sugar-cane production and processing, along with general manufacturing, are the three activities the government has identified as most likely to help Malawi increase its export revenues significantly in the coming years.

Opportunities in manufacturing Manufacturing now accounts for only 12% of Malawi’s GDP, and most of the country’s products are exported in a raw or semi-processed state. The government is prioritising manufacturing projects that add value to Malawi’s agricultural products. The The Malawi Investment and Trade Centre also cites textiles and garment manufacturing and light manufacturing (particularly of household electrical items and steel-based products) as other activities with excellent growth potential. The mining industry has strong prospects, too. Malawi has a wide variety of proven mineral reserves, including uranium, coal, limestone and gemstones. Mining now contributes around 1% of the country’s GDP but the government hopes to increase that percentage significantly. In April this year, Malawi renewed Canadian company Mkango Resources’ prospecting license for its Songwe Hill Rare Earth project in Phalombe. Mkango spokesperson Ashlee Utterback says, “Mkango believes Malawi is one of the most favourable jurisdictions to be operating in Africa and has the potential to become one of Africa’s foremost rare-earth producers”. The forestry sector is another growth area for Malawi. Concessions and logging agreements have been issued to some private companies, but the full commercial potential of Malawi’s large forest plantations, which total around 68,000 hectares of soft woods, has not been fully exploited.

Free-trade agreements Malawi’s many free-trade agreements make it an attractive choice as a base for export-oriented enterprises. Malawi is a member of the African Free Trade Zone, the Common Market for Eastern and Southern Africa (COMESA) and the Southern African Development Community (SADC). In addition, the country has signed bilateral trade agreements with South Africa, Zimbabwe, Mozambique, Malaysia, China and India. Through the Cotonou Agreement, Malawi enjoys preferential trade status with the EU; in fact, the EU now accounts for 39% of Malawi’s total exports. Malawi also participates in the USAfrican Growth Opportunity Act (AGOA), a trade initiative between the US and sub-Saharan African countries, through which producers of textiles and apparel in Malawi can export their products duty-free and quota-free to the US market. Malawi will continue to enhance its attractions for investors. As Sosten Gwengwe puts it, “We want people to ‘Buy Malawian’.”

© Ministry of Industry and Trade

Candlex

Local Leader in Home and Personal-Care Products Candlex is Malawi’s local market leader in home and personalcare (HPC) products. Driven by six key values – spirit, pride, determination, commitment, passion, and integrity – the company manufactures high-quality candles, lotions, cosmetics and soaps, all sold at affordable prices. Candlex focusses on the domestic market but also exports its products regionally. The company contributes significantly to Malawi’s economic development by adding value, creating employment and generating forex savings. Candlex distributes its products through retail and wholesale chains as well as independent shops all over Malawi, and exports through agents. To continue to grow, Candlex would like to form new local and foreign partnerships which will help the company access low-cost financing. Candlex offers strong local knowledge, an established client portfolio and proven business success.

Macleod Road, Makata - Tel: +265 187 6600 candlex@candlexmw.com - www.candlexmw.com

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Dynamic Organisations Spearheading Private-Sector Development

© Fisherman’s Rest Classes for the local community at Fishermen’s Rest in the Lower Shire Valley

Two dynamic institutions are playing a crucial role in developing Malawi’s private sector: the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) and the Malawi Investment and Trade Centre (MITC). The MCCCI has been in the forefront of Malawi’s economic development for over 100 years. Established in 1892, the MCCCI is a partnership of enterprises and associations representing all sectors of the local economy. The MITC was formed through a merger of the Malawi Investment Promotion Agency and the Malawi Export Promotion Council, and combines the functions of the two previous organisations. It focusses on promoting investment in production activities and on boosting Malawi’s exports.

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The MCCCI, according to its mission statement, aims to be “a model of excellence in lobbying, advocacy, and delivery of business-facilitation services in Malawi and the Southern Africa region.” The MCCCI offers a number of services to its members and to the local business community. These include providing business and economic information; issuing export-certification documents; organising trade-promotion events; providing business-management training; representing the business community at national, regional and international meetings; and offering business premises to micro and small enterprises. A key role for the MCCCI is to lobby for the interests of the private sector in meetings with the government. The MCCCI researches business issues in depth and informs the government about any stumbling blocks. It


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also regularly holds conferences to brief the media on private-sector development issues. MCCCI officials meet with members of the Malawi government to discuss and resolve any problems affecting the private sector, and the MCCCI provides input concerning the national budget. The organisation also participates in the PublicPrivate Dialogue Forum co-chaired by the Ministry of Industry and Trade and the private sector. In an effort to strengthen regional business ties, the MCCCI plays an active role in the Association of SADC Chambers of Commerce and Industry and the COMESA Business Council. One priority for the MCCCI is to promote Malawi’s small and medium-sized enterprises. At the recent opening of a training centre for tailors in Blantyre, MCCCI President Matthews Chikankheni pointed out that grouping SMEs into clusters helps individual enterprises grow. He said, “Here we have started with tailors, but our intention is to identify SMEs from different sectors like clothing and textiles, footwear and agro-processing. We need to organise SMEs according to specific sub-sectors and then continuously train and mentor them in the production of quality products for domestic, intra-regional and international markets.”

Services for foreign investors MITC’s mission is to contribute to Malawi’s sustainable development by promoting investment in trade-oriented activities in targeted sectors. The organisation offers a wide range of services, including consulting support, assisting companies with product and market development, providing essential information related to investment and trade, assessing the potential of different sectors, helping entrepreneurs research and plan projects, and streamlining the investment process for new investors, both local and foreign. The MITC also represents Malawi in local and international trade fairs. Clement Kumbemba, MITC CEO, accompanied Malawi’s President Joyce Banda on a trade mission to Brussels in October 2012. Speaking with potential EU investors, he explained, “Malawi has many natural resources and mineral deposits ready for development, and we at the MITC are ready to assist investors. Malawi is at the heart of an attractive, vibrant and fast-growing region. Our country connects Southern Africa to Eastern Africa and serves as an excellent base for a regional business. Malawi’s stability and the friendliness of our people are major attractions for investors. We have reestablished investor confidence in Malawi and we are sure our country will benefit in the near future.”

AkzoNobel Malawi

Premium Paints for High-Quality Projects AkzoNobel Malawi distributes premium paints with the prestigious Dulux brand name and is ranked the local leader in its sector, having earned a 60% market share in sales of high-quality paints.

The company grew out of an enterprise founded over 40 years ago as one of Malawi’s first big FDI projects. It is part of the international AkzoNobel group headquartered in the Netherlands but recently became a franchise with 100% local shareholders. The company’s main clients are hardware stores and contractors. CEO Matthews Chikankheni says, “While most of our business now is with hardware stores all over the country, we are actively targeting contractors involved in big development projects. We are looking to win the tenders to supply paints for these projects. Our competitive edge is that we specialise in the highest-quality premium paints.” Akzo Nobel Malawi is looking forward to continued growth in tandem with the country’s ongoing development, especially as more and more major construction projects get off the ground. Matthews Chikankheni welcomes the chance to work with foreign partners in projects in Malawi. He says confidently, “We will maintain our position on the market as Malawi’s number one premium paint supplier.”

P.O. Box 30013 Chichiri – Blantyre 3 Tel: +265 187 1522

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MITC: Your Gateway to Investment Opportunities

The Malawi Investment and Trade Centre (MITC) is the gateway to outstanding investment opportunities in Malawi’s rapidly developing economy. Formed in 2011 from the merger of the Malawi Investment Promotion Agency (MIPA) and the Malawi Export Promotion Council (MEPC), MITC is positioning itself as a true one-stop shop for investors and is ready to serve as the ideal local partner for foreign companies and entrepreneurs.

MITC is mandated by the Investment and Export Promotion Act of 2012 to provide all kinds of services for investors, including streamlined processing of necessary permits. The Centre also handles investment and export promotion in the priority sectors of agriculture, agro-processing, fisheries, forestry, manufacturing, mining and tourism. In addition, MITC offers consultation support for investors and exporters, assistance in developing products and markets, investment and trade information, industrial assessments, and project planning and research. The MITC represents Malawi at local, regional and international trade fairs and hosts delegations of potential investors, including a visit to Malawi in July 2013 by 30 investors from India.

Streamlining the process of starting a business One of the MITC’s essential services is to streamline the paperwork involved in launching a business project in Malawi. Before beginning any business activity, prospective investors are required to incorporate a company with the Register of Companies, which issues a Certificate of Incorporation. In addition, all prospective investors investing a minimum of €189,700 (US$250,000) are required to obtain an Investment Certificate from the MITC.

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While applying for the Investment Certificate, investors can also apply for business-residence permits and temporary-employment permits, land and sector-specific approvals, licenses and other permits. The MITC handles applications for business-residence permits, temporaryemployment permits and business-land permits on behalf of investors. Once the investor obtains an Investment Certificate, he or she can open a business account with a commercial bank in Malawi and register the business with the Malawi Revenue Authority. Some investment projects require an Environmental Impact Assessment (EIA) by the Department of Environmental Affairs; the MITC facilitates this process for investors.

Helping to boost FDI in Malawi Through its services, the MITC is playing a leading role in Malawi’s drive to attract more Foreign Direct Investment. According to the United Nations Trade and Investment (UNCTAD) Report for 2013, Malawi drew around €97.9 million in FDI in 2012, which represents 2.4% of total FDI flows to Southern Africa over the year. Infrastructure projects accounted for 62% of FDI in Malawi in 2012 while energy was the next-biggest target at 33%. To increase FDI, the Malawi government has implemented new incentives in 2013 to encourage investment in the priority sectors of mining, agriculture, tourism and industry. These incentives include removing all taxes on major construction equipment (including cement-mixer lorries and cranes) in order to spur on the growth of the construction sector, and eliminating all duties and taxes on imported equipment and machinery designed to be used for mining exploration and operations or for energy generation and distribution. Top sources of FDI in Malawi today are India, China, the UK, South Africa, Australia, Zimbabwe, the US and Brazil. Brazil’s Vale Logistics, for example, made a major investment in a rail line in Malawi in 2011 that accounted for over 26% of FDI in Malawi for the year. According to MITC estimates, Malawi’s FDI in 2013 should top the 2012 total thanks to the country’s improved business climate; new investor confidence in Malawi thanks to renewed support from international funding organisations, particularly the IMF; and new investment-friendly economic reforms instituted by the President Joyce Banda administration.

© Ministry of Industry and Trade

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© Ministry of Industry and Trade

UK-Malawi Trade and Investment Forum The UK-Malawi Trade and Investment Forum held in London earlier this year highlighted Malawi’s attractions for foreign investors. At the forum, President Joyce Banda commented, “Our goal is to take Malawi to the top 100 countries of the World Bank ‘Doing Business’ rankings in the next two years. And the government is committed to turning Malawi around from being aiddependent to being a vibrant trading and investment nation. Malawi believes that regional integration is the key to consolidating the country’s development agenda in the region, including intra-regional trade. The Common Market for Eastern and Southern Africa (COMESA) and the Southern Africa Development Community (SADC) provide vast market opportunities for trade and investment. This trade and investment forum could not have happened at a better time.” At the forum, President Joyce Banda cited Malawi’s many advantages as an investment target: Malawi is a former British colony based on British laws and culture with English as the official language; it is a democratic and peaceful country with a history of political stability since its independence; its legal framework is based on the rule of law and a constitution; and it is a liberalised, free-market economy offering preferential access to many regional and international markets. These markets include COMESA, SADC (of which Joyce Banda is now the chairperson), countries participating in the European Cotonou Agreement, and the US market through the African Growth and Opportunity Act. Malawi also enjoys a number of bilateral trade and investment agreements, including preferential tariff partnerships with China, India and Japan.

Regional trade hub Malawi’s central location in a fast-growing region makes the country an ideal trade hub in southern Africa, where trade is expected to increase dramatically over the coming decade. At a recent SADC summit in Lilongwe, regional leaders discussed the urgent need to improve trade among SADC’s member states, particularly as some of the region’s international markets are experiencing a downturn during the global economic crisis.

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SADC is working to establish the Tripartite Free Trade Area by 2015. This trade group would bring together COMESA, SADC and the East African Community (ECA) in a market of around 600 million consumers in 26 countries with a combined GDP of around €758.9 billion (US$1 trillion). The Tripartite Free Trade Area would form the basis for an Africa-wide free-trade area and would greatly enhance Malawi’s investment appeal. In another sign of increased regional cooperation, last year SADC member states adopted a Regional Infrastructure Development Master Plan, which offers excellent opportunities for international investors.

Strong, liberalised financial sector Recent reforms by the government of Malawi have resulted in a strong financial sector which provides reliable support for investors. The sector has been liberalised and opened up to new players, and Malawi is looking to attract more investment in financial services. According to the MITC, Malawi has boosted the number of its commercial banks from two to nine, and it now has 15 microfinance institutions and lenders. Malawi also offers market-based interest rates, unrestricted access to financing facilities for both local and foreign investors, and a managed floating exchange rate. In addition, as the MITC points out, Malawi provides a level playing field for local and foreign companies. The country’s disciplined, skilled, English-speaking and motivated workforce is another strong point.

Untapped resources in many sectors On top of all these advantages, Malawi has almost completely untapped investment potential in many areas. The Joyce Banda government’s Economic Recovery Plan identifies five priority sectors, which are agriculture, tourism, mining, energy and infrastructure development, including ICT. Forming strategic partnerships with international investors in these areas is a top goal for the government. President Joyce Banda commented at the London investment forum, “I would like to invite fund managers, financial institutions and private corporations to seriously consider partnering with us by seizing these opportunities. To facili-


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tate development and to regulate the implementation of private-public partnerships, the government has enacted a Public-Private Partnership Act and has created a one-stop structure for investors. Under this new infrastructure, Malawi intends to ease the procedures and create incentives for investors by, among other things, guaranteeing easier business licensing of qualified businesses in the shortest time possible and harmonising the granting of permits and incentives.”

Agriculture key to economic development strategies Developing Malawi’s agriculture sector is particularly important for the Joyce Banda government and the MITC since agriculture can not only spur on the national economy but also ensure food security. Malawi’s agriculture sector currently focuses on the production of tobacco, tea and sugar, which in combination made up more than 80% of the country’s total exports and 28.33% of GDP in 2011. In July 2013, MITC General Manager Clement Kumbemba announced that the MITC has singled out six priority crops for agricultural investment and development: groundnuts (peanuts), pigeon peas, sunflowers, soybeans, maize and sugarcane. He explained, “We are looking at the bigger picture. Agriculture here is in the hands of smallholder farmers, so we want to highlight projects for investors through which our smallholder farmers can also benefit.” MITC reports that between 2006 and 2010, demand for soybeans grew by 5.5% in Malawi, 6% in the region and 5% globally, while demand for sunflowers grew by 40.8% locally, 5.9% regionally and 2.5% globally. MITC Investment Promotion and Services Director Joshua Nthakomwa also highlights opportunities in agriculture. He says, “Malawi’s agriculture sector is attractive because of the country’s abundant water supplies, good agro-ecological conditions and arable land, which can be leveraged by investors in commercial agriculture projects.” He notes that Malawi has developed unified development strategies which benefit the agriculture sector, including the Economic Recovery Plan, the National Export Strategy and the Agricultural Sector Wide Approach (ASWAP) initiative. Joshua Nthakomwa adds that Malawi has excellent potential to boost its agricultural exports, both regionally and globally. He explains, “Malawi has already established trade relations with EU and Asian countries which could be leveraged by

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investors to supply global markets, and Malawi’s membership in SADC, along with its strategic location in the region, provides a good opportunity for investors seeking to supply regional markets.”

Diversifying agriculture sector and adding value Diversifying the agriculture sector is essential for Malawi in its drive to increase its exports. Tobacco is currently the country’s biggest foreign-exchange earner, accounting for 60% of total revenues, and around 75% of Malawi’s population is dependent on tobacco-farming. This makes Malawi particularly vulnerable to drops in global tobacco prices and to the worldwide trend towards reduced consumption of tobacco. Tea is Malawi’s second-biggest export crop. In fact, Malawi is the second-largest producer of tea in Africa after Kenya and is a pioneer in tea production, having begun to commercialise its tea in the 1880s. Malawi has around 16,000 hectares of tea plantations, mainly in the Mulanje and Thyolo districts. Malawi’s tea is generally used as part of a blend with other teas. Tobacco

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Sugar is Malawi’s third most important agricultural crop. The country has excellent climatic conditions and good soil for sugar-cane production along with irrigation from secure water sources. Malawi’s sugar yields average around 62% more than the regional average and Malawi sugar is already exported worldwide. Regional and global demand for sugar outpaces supply and Malawi can help fill this gap. Malawi also produces Arabica coffee for export, mainly to Germany, the US and South Africa. Most of this coffee is grown on small farms, but the Coffee Association of Malawi (CAMAL) is working hard to boost production of high-quality washed coffee. There is also potential for the production of instant coffee. The Malawi government’s Greenbelt Initiative aims to foster sustainable growth in the agriculture sector and help Malawi meet the UN’s Millennium Goals through developing around one million hectares of land for agricultural projects which will provide new employment opportunities and increase food security. Achieving the plan’s targets requires substantial investment in irrigation systems, processing and storage facilities, and services for rural residents, including banks, schools, health centres and housing.


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Opportunities for investors in agriculture Malawi is looking for investors who can help support the Greenbelt Initiative and modernise the agriculture sector by bringing in new technologies, helping to diversify crops to reduce reliance on tobacco, accessing new markets and improving the marketing of Malawi’s agricultural products, and adding value to local products. Large-scale commercial farming, livestock production, aquaculture, horticulture, food-processing, agro-industries, and irrigation systems are some of the main investment opportunities in Malawi’s agriculture sector today. The MITC singles out particularly high-potential opportunities in soybeans (now grown on around 75,000 hectares), which can be processed into value-added products for regional and international markets, and maize, the country’s staple food. According to the MITC, Malawi produces more than 3.4 million tonnes of maize per year and the government’s new National Schools Meals Programme will result in a demand gap of about 25,000 tonnes of maizesoya blend by 2016. Other key crops cited by the MITC include pigeon peas. Malawi is already the world’s third-largest producer of this crop and has the capacity to increase production significantly to meet rapidly growing global demand. Adding value to Malawi’s groundnuts is another promising activity. The country now produces around 297,000 tonnes of groundnuts per year but few companies are involved in value-adding processing of this crop.

Cotton is another high-potential crop for Malawi. Around 200,000 households around the country are currently involved in cotton-growing, and the government has set aside funds to help cotton-farmers boost their production. The MITC estimates that Malawi could easily increase its cotton production to around 100,000 tonnes per year, given adequate investment. The government also aims to foster an integrated cotton industry as part of its drive to diversify Malawi’s agriculture sector. This strategy involves developing the industry across the entire value chain, from seed research to textiles manufacturing. The MITC cites investment opportunities in producing certified cotton seeds as well as chemical fertilisers, herbicides and agricultural equipment; developing large-scale cotton farms; setting up ginning, yarn and textiles factories; and exporting processed cotton and textiles to the US and other markets. Another top made-in-Malawi agricultural product is chilli sauce, which is exported throughout the region and to markets in the US and Europe. Malawi also produces a wide variety of fruits and vegetables, such as oranges, tangerines, paw-paws, guavas, mangoes, avocados, pineapples, bananas, tomatoes and onions. Most of Malawi’s fruits and vegetables are not preserved and often go to waste, especially in the peak season. The country urgently needs investment in processing and storage facilities to make the most of its fruit and vegetable crops.

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Other opportunities in Malawi’s agriculture sector, according to the MITC, include livestock production (of pigs, poultry, and dairy and beef cattle), wheat growing and processing, cassava production and processing, honey production, the production of goods based on Malawi’s forestry resources, and mushroom-growing.

independent power producers. Growth prospects are phenomenal. Malawi’s current installed electricity capacity is around 283.5 MW, most of it from hydropower, while demand is estimated at over 340 MW. According to the MITC, Malawi has over 2000 MW of untapped hydropower potential alone.

Fish, particularly tilapia and catfish from Lake Malawi, is another potential export-earner for Malawi. Large-scale fishfarming operations along with processing and storage facilities around Lake Malawi are needed for the country to make the most of its extensive fish resources.

The Malawi government has liberalised the energy sector to allow private-sector players to be involved in offering energy services. The Electricity Supply Commission of Malawi (ESCOM) is currently the sole provider of electricity in the country and it is unable to meet growing demand. The MITC reports that the mining sector alone will need around 800 MW of energy, while the Greenbelt Initiative to develop the agriculture sector will require around 130 MW, new services (including ICT, tourism, healthcare and education, and financial services) will need around 500 MW, the manufacturing sector will require around 700 MW, and domestic demand is expected to rise to around 700 MW. Given its vast hydropower and other energy resources, Malawi has the potential to meet this demand and even to export energy to regional markets and beyond.

Vast hydropower potential In the energy sector, Malawi offers exceptional opportunities in power generation, transmission and distribution, including projects involving hydro, solar, biomass and wind power. The government aims to establish public-private partnerships in the energy sector and to encourage

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Mining sector to become top source of export earnings The mining sector is another top opportunity for investors. Malawi has significant unexploited or underexploited mineral resources, including gold, uranium, platinum, bauxite, monazite, coal, precious and semi-precious stones, limestone, phosphates, rare-earth minerals, heavy-mineral sands, graphite and other minerals as well as oil and gas. Given sufficient investment, the Malawi government expects mining to contribute around 10% of Malawi’s GDP eventually. Current mining operations in the country are limited mainly to coal-mining, quarrying, limestone production and the mining of gemstones for export, including aquamarine, amethyst, red and rhodolite garnets, quartz, angering and feldspar. Malawi recently opened a uranium mine and is in the process of opening a niobium mine. In addition, in a move

to attract international investors, the government is in the process of developing a mining code and is conducting a comprehensive, countrywide geophysical survey of Malawi’s mining resources.

Opportunities in manufacturing, from food to textiles The manufacturing sector, which currently contributes around 12% of Malawi’s GDP, offers tremendous potential, particularly in operations which add value to Malawi’s agricultural products, including tobacco and tea. Textiles and garment factories also have strong export prospects. In addition, light manufacturing for the domestic market is a key growth area since Malawi currently imports most of its household electrical equipment and engineering materials, including all steel-based products.

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Exceptional tourism potential

MITC promoting specific projects in many sectors

Malawi also has outstanding tourism potential thanks to beautiful Lake Malawi as well as the country’s national parks, game reserves, Mulanje Mountain, and various cultural and historic sites. The government is particularly looking to attract investment in high-standard hotels on Lake Malawi’s beaches, new facilities and services in game reserves and better management of resources in these reserves, watersports facilities and cruise services on Lake Malawi, theme parks and casinos, eco-tourism facilities and services, and general tourism infrastructure.

The MITC is currently offering several attractive investment opportunities in different sectors, many of them publicprivate partnerships. These include a Greenfield sugarcane project, part of the Greenbelt Initiative, which is set to develop 6,000 hectares of irrigated land along Lake Malawi for sugarcane production. The project, a public-private partnership, will also include a processing plant to be built and run for the first year by an Indian company, after which the public-private partner will run the plant. The USAID has prepared a comprehensive profile of the project.

One positive development for Malawi’s tourism sector is Ethiopian Airlines’ announcement in July 2013 that it had acquired a 49% share of national carrier Air Malawi, renamed Malawian Airlines Ltd. Ethiopian Airlines CEO Tewolde Gebremariam says, “Through this strategic partnership with Malawian Airlines, Lilongwe will become Ethiopian Airlines’ third hub on the African continent after its main hubs in Addis Ababa and Lome, Togo.” The investment signals confidence in the future growth of Malawi’s tourism sector as well as in the country’s attractiveness as an FDI target.

Other MITC projects include a 3,000-hecatare pigeonpea farm to produce around 12,300 tonnes of pigeon peas per year; a project to provide equity financing for Afriseed Limited Company, which will develop the production of quality seeds and employ rural women; a project to build and operate two eco-lodges in partnership with local tourism leader Sunbird Tourism; agricultural development projects in partnership with Mpatsa Holdings; and a partnership with local enterprise Universal Industries to manufacture food products using Malawi’s agricultural crops.

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The MITC is also promoting a partnership with RAB Processors to develop a plant to produce textured soy protein; a project to set up a commercial bank in partnership with Mpatsa Holdings; a project to produce groundnut oil in partnership with Nscomex Ltd., the commercial arm of the National Smallholder Farmer Association of Malawi (NASFAM); a project to increase the reach of the Promotion of Rural Initiatives and Development Enterprises (PRIDE Malawi Ltd.), Malawi’s first microfinance institution; a project to develop a fibre-optic network in partnership with Skyband Corporation; a project to develop bio fuels with Bio Energy Resources Ltd.; a fish-farming project by Mpatsa Trust; a project to improve the broadcasting capability of Beta Television; a project with Eqnon Electricity Kiosks to improve electricity access by installing electricity kiosks where users can rent batteries; a project to expand production by Tafika Milling; and many other projects for which MITC can provide detailed information.

Development Strategy and the Economic Recovery Plan. This project will therefore go a long way in supporting these initiatives through uplifting the socio-economic status of the rural masses.”

Infrastructure development crucial

In the beginning of 2013 Malawi and Mozambique signed an agreement to support each other in developing this €4.5billion initiative. The project, crucial for land-locked Malawi, has also received financing from the African Development Bank, and German enterprise Hydroplan Ingenieur has conducted a preliminary feasibility study for the project with funding from the EU.

To ensure the success of projects like these, Malawi needs to improve its infrastructure. The government welcomes investment in roads, airport upgrades, and railway rehabilitation, including transport to seaports in neighbouring countries. Most cargo and passenger traffic in Malawi and between Malawi and neighbouring countries is by rail, but air transport is also significant in moving people and commodities both within and outside the country, and transport by boat on Lake Malawi is also common. Malawi is already improving its ICT infrastructure through a €110-million e-government project and it is looking to attract new ICT services-providers and investors interested in further improving the national ICT network. In July 2013, Moses Kunkuyu, Malawi’s former Minister of Information and Civic Education, launched a five-day ‘Television White Spaces’ training session for Malawi’s ICT professionals. The project, developed by Chancellor College of the University of Malawi in partnership with the Malawi Communications Regulatory Authority (MACRA), aims to bring broadband connectivity to rural Malawi at affordable costs using identified gaps, or ‘white spaces’, in existing TV channels. The former minister noted that the government of Malawi is committed to promoting universal access to ICT services and to facilitating public-private ICT partnerships. He said, “I am glad to inform you that Malawi is one of the five countries in the world which are currently involved in the pilot phase of this project. This demonstrates the strategic focus on ICT development under the wise and dynamic leadership of the current administration. Malawi has placed ICT high on its agenda through such initiatives as the Malawi Growth and

Nsanje World Inland Freeport The government of Malawi has also launched the Nsanje World Inland Freeport project, which will provide Malawi companies with least-cost access to regional and global markets via an inland-waterway route on the Shire and Zambezi rivers to port facilities on the Indian Ocean at Chende, Mozambique. The transport route covers 238 km and is expected to reduce the costs of shipping goods from Malawi to the port by almost 60%. The MITC points out that the project needs investment in the construction of an oil pipeline and refinery; storage facilities and warehouses; hotels, shopping complexes, boats and barges; and other property development along the route.

Very investor-friendly government One of Malawi’s biggest attractions for international investors is its very business-friendly government headed by President Joyce Banda. Sosten Gwengwe, Minister of Industry and Trade, explains, “In 2012, the government of Malawi initiated key policy reforms aimed at enhancing economic and social development. The primary objective of the policy reforms was to establish strategic development plans in line with the government’s vision to economically empower citizens by creating jobs and wealth, and reducing poverty. Through its investment-promotion agency, MITC, the government is working to support economic growth led by exports and the private sector. The MITC also looks to encourage international investors to look at Malawi as their investment partner of choice. I want to assure the business community and investors that the government of Malawi is committed to creating a very conducive and attractive business environment here, and I take this opportunity to invite you to invest in Malawi and make Malawi your preferred source of imports.” Now is the time for investors around the world to take advantage of the MITC’s support in tapping Malawi’s vast investment potential.

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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 Blantyrebased law firm 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.

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Krishna Savjani, OBE SC Savjani & Co.

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.”


• Reserve Bank Governor Outlines New Recovery Measures • Light at the End of the Tunnel Following Bold Reforms

Finance

“We want investors around the world to realise that Malawi is the right place to do business in Africa. ” Hon. Dr. Ken Lipenga, former Minister of Finance


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Former Minister of Finance Promoting Trade Instead of Aid Hon. Dr. Ken Lipenga, former Minister of Finance, discusses the challenges and potential of Malawi’s economy. European Times: What role does the Ministry of Finance play in Malawi’s economy? Ken Lipenga: The Ministry of Finance is obviously central to government operations in that we are responsible for managing the country’s finances as a whole and for maintaining the nation’s economic health. The ministry is divided into several specialised departments, each with its own responsibilities. European Times: How is the economy of Malawi evolving? Ken Lipenga: Let me start by talking about what the economy has gone through over the past couple of years. When our former

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Hon. Dr. Ken Lipenga, former Minister of Finance

president died in April 2012, Malawi was experiencing one of its worstever economic challenges. The problems were caused mainly by Malawi’s over-dependence on two sources of revenues: the agriculture sector, particularly tobacco, which accounts for around 60% of our for-

eign-exchange earnings, and international aid. Malawi does not yet have a strong manufacturing sector and tourism has never contributed more than 1% to 2% of the country’s GDP, in spite of its vast potential. Malawi was also not being managed according to sound international accounting principles, and we failed to reach an agreement with the IMF, which in turn hurt our reputation with other international partners. Our previous president did not want to devalue the Kwacha or liberalise our foreign-exchange regime, and then the tobacco market plummeted. It was clear that we were headed for financial disaster. European Times: How did the new government manage to turn all this around? Ken Lipenga: Our new president, Her Excellency President Joyce Banda, took office and began to make


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Finance

the necessary changes to move the economy in the right direction, not to please donors but because these steps were necessary for Malawi’s economic health. The government devalued the Kwacha, which, as I argued at the time, was a necessary move since it resulted in better economic health for the country, which means more job opportunities for our people. As a result of these changes, in June 2012 the IMF granted Malawi a three-year, €117.69 million (US$157 million) loan package, and our other international partners, including the EU, once again started to help us revitalise the economy. Malawi is definitely back in business.

“Malawi is known as the ‘Warm Heart of Africa’ because of its friendly people; now we want to be known as the ‘Warm Heart for Business’.” European Times: What are your current goals for the economy? Ken Lipenga: The lesson we learned from this challenging time is that just as we need political freedom, we also need economic freedom. If free-market principles are supported, the economy will grow. Now we need to use our foreign-exchange revenues to generate the production of exports so that we can achieve a

“We want investors around the world to realise that Malawi is the right place to do business in Africa. Malawi’s future should be based on trade rather than aid.”

trade balance. Malawi also needs to continue efforts to combat the black market, move away from subsidies and raise fuel prices to reflect global prices, among other reforms. The Ministry of Finance has devised an austerity budget for the short term and an economic-recovery plan for the long term. In establishing the new budget, we listened to the business sector and abolished many taxes. A budget which encourages privatesector growth leads to new jobs and other benefits for our people.

export strategy. Malawi’s very chance of survival will depend on export growth. I am optimistic that this economy will recover as long as we stay on track. The government has been under some pressure, but I believe that in politics we cannot appease everyone, and I believe that the plans we have put in place are in the best interest of the country. We do see fuel queues from time to time, which show how fragile our economy is, but our policies are beginning to work.

European Times: What are your main strategies to support Malawi’s financial health?

European Times: What is your personal message to international investors?

Ken Lipenga: We aim to diversify the economy away from agriculture and focus on adding value. One reason many African countries have stagnated in the development phase is because they fail to add value to their resources. We also want to diversify the agriculture sector into non-tobacco crops. And, we see great potential in our tourism sector. The Ministry of Finance is working very closely with the Ministry of Industry and Trade to encourage exports, for example through our new national

Ken Lipenga: Malawi is known as the ‘Warm Heart of Africa’ because of its friendly people; now we want to be known as the ‘Warm Heart for Business’. We are going to give the private sector more space to operate successfully, because we know that Malawi’s economic recovery will depend largely on the private sector. We want investors around the world to realise that Malawi is the right place to do business in Africa. Malawi’s future should be based on trade rather than aid.

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MALAWI

Reserve Bank Governor Outlines New Recovery Measures Charles S.R. Chuka, Governor of the Reserve Bank of Malawi (the country’s central bank) since April 2012, has launched a series of reforms to boost foreign exchange and stimulate the country’s economic recovery. He has previously held many other high-level posts, including serving as a World Bank Senior Advisor and as the CEO of Malawi Telecommunications. He is also Chairman of the Association of African Central Banks. He discusses the Reserve Bank’s current priorities and projects.

Charles S.R. Chuka, Governor Reserve Bank of Malawi

European Times: What is the main responsibility of the Reserve Bank of Malawi?

example fertile soil, water, fish and minerals. Fostering this growth will help alleviate our currency problems.

Charles Chuka: The Reserve Bank of Malawi is committed to stabilising Malawi’s currency and the market as a whole. We devalued the kwacha but it has not been left to float as freely as is the case in other economies. The Reserve Bank of Malawi is controlling it by managing demand through implementing a tight monetary policy that ensures that the government is not competing with the private sector in procuring foreign exchange from commercial banks. We also intervene in the market, using other instruments if dollars are not available. Malawi’s money supply has declined by 40% and we must increase it. Malawi has resources that can help expand the national economy, for

European Times: Are the new policies working?

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Charles Chuka: We believe the monetary-policy measures currently being implemented are paying off. We expect inflation to begin to decline as the economy earns more foreignexchange revenues from tobacco sales. European Times: What is the importance of foreign investments and aid to Malawi’s economy? Charles Chuka: As aid increases, currency tends to appreciate. Foreign aid is beneficial if it is properly managed, although it often undervalues the importance of certain activi-

ties, like exporting. Foreign aid must be invested in areas that unlock the country’s human potential. The development of human resources and of infrastructure can help the economy begin to produce fruitfully. Foreign aid directed at stimulating export activities can provide a big boost to the economy as well. European Times: How important is it to improve Malawi’s international image? Charles Chuka: Promoting Malawi worldwide is essential. We need to showcase the country’s many very positive features and investment opportunities. We need to make the world more aware of Malawi not just to draw investors but also to help international travellers understand our people, culture and tourism attractions.


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Finance

Malawi Revenue Authority

Investor-Friendly Tax Regime The Malawi Revenue Authority (MRA) oversees Malawi’s tax system, which now offers significant advantages for investors. The Authority has upgraded its tax-collection processes and doubled tax revenues for the current tax year compared to the previous year. Meanwhile, the Authority has significantly improved its service delivery and will continue to work on fighting corruption and simplifying the tax-payment process. Malawi has put a number of measures in place to lighten the tax burden for companies starting up and operating businesses in targeted sectors. MRA Commissioner General John S. Bizwick explains, “Malawi offers a wide range of tax incentives with the aim of encouraging development, enhancing output, earning or saving foreign exchange, and expanding employment opportunities. The incentives include export-processing zones, a priorityindustry and industrial-rebate scheme, and a zero tax rate on machinery for manufacturing, to name just a few.” Specific tax benefits are available for general manufacturing, including a 100% investment allowance on new plants and machinery. To diversify exports, Malawi grants a 25% allowance for non-traditional export products, and companies exporting non-traditional products can also claim a 15% international-transport allowance and pay no value-added tax on exported goods.

Malawi has also revised its value-added-tax legislation to benefit investors, including raising the threshold for VAT registration. John S. Bizwick says, “Another new regulation is a 16.5% VAT on Internet services so that Internet serviceproviders can claim input VAT. This will in turn reduce costs of Internet services for users.” Meanwhile, to promote the modernisation of the construction and transport sectors, specialised machinery for these sectors are free of VAT and import duties. Malawi also grants a number of specific tax incentives for targeted sectors, including construction, energy production and distribution, ICT, agriculture, tourism, mining, banking, education, healthcare, and road, rail and air transport. In addition, companies which provide social services, including building schools and health centres or sponsoring sporting events for young people, can count on a 50% tax allowance. Malawi’s tax regime is definitely business-friendly.

Tax breaks for agricultural enterprises In the agriculture sector, capital expenditures and the construction of supporting infrastructure and staff housing are eligible for tax exemptions. In addition, John S. Bizwick explains, “Growers of tea, coffee, tobacco, sugar, and cocoa at the plantation level are regarded as manufacturers for tax purposes, which means they can claim all incentives available to manufacturers.” Tax holidays are available for agricultural enterprises which produce for export, add value, create jobs and generate foreign exchange.

Msonkho House Private Bag 247 - Blantyre Tel: +265 182 2588 mrahq@mra.mw - www.mra.mw

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MALAWI Finance

Light at the End of the Tunnel Following Bold Reforms

© Ministry of Tourism

Major economic reforms initiated by Malawi’s government over the past year – including a 50% devaluation of the Kwacha and a floating exchange-rate regime – have resulted in greater local and international confidence in Malawi’s financial sector. George Partridge, CEO of the National Bank of Malawi, recently commented, “Confidence is a major ingredient in financial-sector activities, and there is now light at the end of the tunnel for Malawi’s financial institutions. The authorities should persevere in their reforms.”

World Bank supporting new financial-reporting system The World Bank is one international partner which has demonstrated its trust in Malawi’s ongoing Public Finance and Economic Management Reform Programme, which will also receive support from USAID and the African Development Bank. As part of its contribution to the programme, the World Bank will help the Malawi government set up a new financial reporting system designed to improve internal

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controls, accounting, reporting and oversight of public finances in Malawi’s ministries, departments and agencies. Commenting on the need for a new reporting system, Minister of Finance Ken Lipenga says, “Over the years the government of Malawi has grappled with issues to do with resources that are not properly accounted for. People have taken funds and used them for the wrong purposes. The new system will help prevent this.” The World Bank’s Country Manager for Malawi, Sandra Bloemenkamp, adds, “It is expected that the citizens of Malawi will benefit from more effective service delivery facilitated by these reforms.”

Bold measures spark economic recovery Once the new reform measures were well established, however, Malawi’s financial health began to improve. The Reserve Bank points out that fuel shortages have lessened and foreign-exchange revenues are increasing, while continued tight monetary and fiscal policies are expected to stabilise


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EL SALVADOR Finance

CDH Investment Bank

Reliable financial services partner in Malawi CDH Investment Bank offers innovative, world-class financial services for its corporate and individual customers.

© Yury Azovkin | dreamstime.com

the exchange rate and reduce inflation during 2013. Echoing this positive projection, Ken Lipenga predicts that annual inflation will slow to an average of 18% this year and that Malawi will meet its 5.5% GDP growth target for 2013. Another positive sign is that Malawi’s commercial banks have continued to perform well over the past year and are well capitalised. The insurance sector has also stayed healthy while Malawi’s payment and settlement system has remained robust. The Ministry of Finance also reports positive performance for public-sector finances in the 2012-2013 fiscal year. The ministry notes that revenue collection in the second quarter of the financial year exceeded expectations and that public-sector expenditures remained within their targets. The Reserve Bank’s overall assessment is that Malawi’s financial markets remain broadly sound, well equipped to withstand shocks, and capable of handling credit and payments as well as redistributing risk appropriately. The bank calls for continued commitment to the reform process. Charles S.R. Chuka, the bank’s Governor, points out, “The Reserve Bank of Malawi will step up its oversight of Malawi’s banking sector with a view to addressing emergent threats to the stability of the financial system.” The IMF also praises Malawi’s financial-sector reforms. On a recent visit to Lilongwe, IMF Managing Director Christine Lagarde said, “Because we believe strongly in the government’s reform programme, we will continue to support Malawi. Our three-year Extended Credit Facility agreed on in July 2012 seeks to restore stability, boost growth, and scale up social protection. We are also committed to helping Malawi build capacity and strengthen its institutions. We are working with the government in many areas: revenue administration, public financial management, the framework for monetary policy, financial-sector supervision and macroeconomic statistics.”

Founded as a discount house in 1998, the firm was transformed into a fully-fledged investment bank in 2012. CDH Investment Bank is part of CDH Holdings Limited, a fast-growing financial services group, with expertise in every aspect of financial services and with investments in Malawi and East Africa.

Misheck Esau, Chief Executive Officer and Managing Director

Serving mainly top-tier companies, the government, and highnet-worth individuals, CDH Investment Bank has earned a solid reputation for innovation, high standards and flexibility. Misheck Esau, Chief Executive Officer and Managing Director of the bank explains, “The bank’s research-based approach, passionate teamwork, exceptional personalised service delivery and knowledge of the local market are the reasons our customers trust us. CDH Investment Bank’s in-depth, wide-ranging experience gives the bank the ability to resolve complex financial questions.” CDH Investment Bank has positioned itself as the ideal gateway for international investors looking into opportunities in Malawi. Misheck Esau points out, “We aim to be the main link for inward investment and we also plan to play a central role in the development of long-term, high-economic-impact projects and transactions and in fostering Malawi’s exports and imports of key strategic commodities. In all our activities, we will continue to put the customer first.” CDH Investment Bank aims to achieve this by building winning partnerships with reputable international banks in areas of international trade, project and corporate finance.

5th Floor, Unit House, Victoria Avenue PO Box 1444, Blantyre Tel.: +265 182 1300 info@cdh-malawi.com, www.cdh-malawi.com

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MALAWI

National Bank of Malawi

Leading Local Bank Aims to Expand Regionally National Bank of Malawi has been providing high-quality banking services for over 100 years and is now ranked the country’s biggest and most profitable bank. Barclays Bank DCO and Standard Chartered Bank are the bank’s former shareholders. Today, National Bank of Malawi is a 100% Malawi-owned, fully private banking operation, listed on the Malawi Stock Exchange, whose main shareholders include Press Corporation Limited and Old Mutual Malawi. The bank builds on the wealth of local knowledge and international expertise it has gained over its many decades of operations. CEO George B. Partridge, who was formerly with the Reserve Bank of Malawi, cites productive partnerships as one reason for the bank’s success. He says, “We have established relationships with institutional investors like FMO and the IFC, we have a good working relationship with the Malawi government and we have established correspondent relationships with foreign banks like Barclays and Citibank. This has given my directors and myself the confidence to run National Bank of Malawi in the right way.” A current goal for the bank is to expand beyond Malawi’s borders. George B. Partridge points out, “We have nearly reached critical mass here in Malawi and are looking to grow in the region. We understand our neighbouring countries and we have developed products and services which can cater to the needs of the regional market.”

George B. Partridge, CEO

costs as well as expertise with a partner as we pursue our ambitious growth plans here in Africa,” George B. Partridge says. National Bank of Malawi has positioned itself as an ideal partner in the African financial sector thanks to its in-depth experience, strong long-term track record and proven ability to remain the market leader in spite of increasing competition from foreign banks in Malawi. Explaining why investors should look into the potential of working with the National Bank of Malawi, George B. Partridge says, “We understand the local market better than our competitors do, we are able to provide unique regional solutions, and we offer a better rate of return for our shareholders.” National Bank of Malawi is ready to serve as a solid, reliable partner in Africa.

Looking to establish joint-venture partnership National Bank of Malawi aims to grow through establishing a joint-venture partnership, either with another small to mediumsized bank or with an institutional investor or a foreign investor looking to enter African markets. “We want to share investment

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7 Henderson st. - Blantyre - Tel: +265 182 0609 natbank@natbankmw.com - www.natbank.co.mw


• Former Agriculture Minister Highlights Diversification • Agriculture Continues to Drive National Economy

Agriculture & Food

“We are working to diversify the agriculture sector just as Malawi’s economy overall is being diversified.” Hon. Prof. Peter Nelson Mwanza, Minister of Agriculture and Food Security


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MALAWI

Former Agriculture and Food Security Minister Highlights Diversification Hon. Prof. Peter Nelson Mwanza, former Minister of Agriculture and Food Security, discusses his goals for the sector. European Times: How important is agriculture to Malawi’s economy? Peter Mwanza: Agriculture is the country’s main sector, generating 70% to 80% of Malawi’s foreign-exchange revenues and employing around 85% of our rural population. We are working to diversify the agriculture sector just as Malawi’s economy overall is being diversified. We want to boost the production of crops other than tobacco, including sugar, tea and cotton as well as soybeans, sugar beets, groundnuts, chickpeas, sunflowers, rice and cassava. We are making progress; our cotton crop quadrupled last season.

Tekst onder foto: Tea plucking at the Thyolo Tea Estates

European Times: What are some recent projects in the agriculture sector? Peter Mwanza: One of our priorities is to expand irrigation systems, and through our Greenbelt Initiative we aim to irrigate up to one million hectares. Another priority is to encourage investments in large-scale agricultural projects for export. We are trying to make investing in the agriculture sector extremely attractive, for example through offering public-private partnerships. We also want to add value to our agricultural production and not just export raw materials. We have already attracted investment in vegetable-oil-extraction plants and other added-value ventures. European Times: What are some agricultural products with particularly strong potential? Peter Mwanza: We would like to attract investment in cigarette plants to add value to our tobacco, and we think our prize-winning Mzuzu coffee has great export prospects. Malawi’s high-quality rice, wheat and sugar are other premium products ready to be developed, and we are encouraging organic farming. We already export 90% of our sugar and the government is looking for partnerships in more sugar operations. We expect our sugar production to grow by four or five times over the next five years. Dairy production is another area that requires urgent investment. This includes the production of dairy cattle and development of dairy farms.

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Peter Mwanza, former Minister of Agriculture and Food Security

European Times: What about joint ventures with the private sector? Peter Mwanza: We strongly encourage partnerships between international investors and Malawi’s farmers, for example companies which source their agricultural products from a number of small local farms. We would also like to see investment in cotton gins and in the production of cotton textiles. The Agricultural Development and Marketing Corporation (ADMARC), is ready to work with investors. European Times: Why should investors in agriculture target Malawi? Peter Mwanza: We have extensive agricultural land at low prices, skilled labour and exceptional potential for many types of products. Now is the time to invest in Malawi’s fastgrowing agriculture sector.


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Agriculture & Food

Premium TAMA Tobacco Limited

Mapeto

Textiles-Industry Leader Adding Value to Top-Quality Tobacco Open to Partnerships Premium TAMA Tobacco Limited, based in Lilongwe, is one of the key players in Malawi’s tobacco industry, which accounts for around 60% of the country’s foreign-exchange revenues. Malawi is one of the world’s top producers of the burley tobacco leaf, and tobacco grown in Malawi is exported worldwide. Premium TAMA Tobacco is a subsidiary of Premium Toacco Group in an equity partnership with the Tobacco Association of Malawi (TAMA), the local tobacco sector’s leading business group. In a bid to add value to its products and boost exports, Premium Tama Tobacco established the Kanengo Tobacco Processors plant in 2009 in a joint venture with TAMA. The plant processes around 40 million kilograms of tobacco per year and employs over 1,200 people. In addition to creating jobs, providing a market for local tobacco-growers and increasing Malawi’s export revenues, Premium TAMA Tobacco Limited places a high priority on corporate social responsibility. In November 2012, the company announced a donation of wheelchairs to Kamuzu Central Hospital in Lilongwe. Managing Director Tom Malata explains, “If any of our workers get sick, they are treated at this hospital, and we felt it was appropriate for us to donate the extra wheelchairs the hospital needed.” The company also donated 92 Bicycle Ambulances across the country in tobacco growing areas. Premium TAMA Tobacco will continue to spur on the development of Malawi’s tobacco sector.

Premium TAMA Tobacco Ltd. P.O. Box 40075 Kanengo - Lilongwe Tel: +265 171 1631 tmalata@premiumtobaccomw.com

Mapeto, with a long history in Malawi, demonstrates the country’s progress and potential. Founded in 1967 as a state-owned textiles mill, Mapeto was privatised in 2003 and formed a partnership with an Indian enterprise in order to modernise its equipment and technologies. Mapeto is ranked the local market leader in the textiles sector and has invested in its own cotton gin, the largest in the country, which has significantly boosted the company’s export capacity. Mapeto is actively searching for customers for fabrics and lint. The company’s core activities are the production and distribution of textiles, mainly cotton. Mapeto supplies finished textiles products to the Malawi market through a well-established distribution system. As Malawi’s economy develops, demand for textile products will increase, and Mapeto Martin Mpata, General Manager would like to serve as a reliable partner for foreign textiles enterprises looking to establish a presence in Malawi and in other African markets. Mapeto can tailor-make designs to customers’ specifications. Mapeto offers a well-established reputation in the local textiles sector, as well as industry-leading production capacity and productive relations with the government. Mapeto can also count on reliable supplies of raw materials since it has longstanding relationships with local cotton farmers. For potential investors in Malawi’s high-potential textiles industry, Mapeto is the local partner of choice.

P.O. Box 30070 - Blantyre 3 Tel: +265 167 044 0939 mapetodwsm@malawi.net

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MALAWI

Agriculture Continues to Drive National Economy Agriculture is Malawi’s economic mainstay, and the government actively promotes local and foreign investment in agriculture and food-processing ventures. One goal is to reduce Malawi’s dependence on its main agricultural export, tobacco. The Malawi Investment and Trade Centre (MITC) cites a wide range of high-potential opportunities in the agriculture sector, including livestock production, soybean cultivation and processing, integrated cotton development, the production and processing of fruits and vegetables, largescale sugar and cassava production, and fisheries.

Tekst onder foto: Tea plucking at the Thyolo Tea Estates © Wilderness Safaris

To expand its livestock breeding, Malawi needs to introduce new cattle breeds as well as modern equipment, technologies and services, from artificial insemination to medications and new types of hay and feeds. In the dairy sector, farmers need modern collection, cooling and processing equipment.

Tea plucking at the Thyolo Tea Estates

Soybeans are already grown in Malawi but the country needs to add value to this very versatile product. The MITC singles out opportunities in processing soybeans into tofu, miso, non-dairy yoghurt and cheese, cattle feed, bio-fuels, cooking oils and meat substitutes.

While tobacco, cotton and sugarcane are Malawi’s bestknown agricultural products, the country’s farmers also grow a wide variety of fruits and vegetables, including oranges, tangerines, avocados, paw-paws, guavas, mangoes, pineapples, bananas, tomatoes and onions, as well as new crops like macadamia nuts. The government wants to step up cultivation of these products and to add value to them through investments in plants producing juice and other processed foods. To realise its agriculture sector’s great potential, Malawi also needs FDI in new irrigation networks and better transport infrastructure.

Malawi’s cotton and textiles enter US market duty-free Malawi welcomes more investment in adding value to its locally grown cotton, from processing raw cotton to textilesmanufacturing operations. Processed cotton and cotton textiles produced in Malawi can enter the US market free of duties and quotes under the AGOA trade agreement.

of being drought-tolerant as well as easy to grow. The government is promoting large-scale cassava production around Lake Malawi, including plants manufacturing starch and flour for domestic and industrial uses.

© Wilderness Safaris

The sugar and cassava sub-sectors also have excellent development potential. The type of sugarcane grown in Malawi produces high-quality sugar which can be marketed under the “made in Malawi” label. Malawi’s Greenbelt Initiative promotes investment in large-scale but environmentallyfriendly sugarcane production and processing, including plants which turn sugar into ethanol. Cassava is another agricultural product which can be farmed commercially and exported. Cassava is a food staple in many areas of Malawi, and offers the advantages

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Fish drying racks on the shores of Lake Malawi


THE EUROPEAN TIMES

Agriculture & Food

Agricultural Development and Marketing Corporation

Dynamic Driver of the Agriculture Sector Malawi’s Agricultural Development and Marketing Corporation (ADMARC), the national grain marketer, has a long history of developing and promoting Malawi’s agriculture sector. ADMARC has undergone some major changes over the past two decades as it transitioned from a government-owned enterprise with a monopoly in its field to a limited liability company operating in an increasingly competitive open market. In May 2012, Malawi’s President Joyce Banda appointed Dr. Jerry Jana to be the new CEO of ADMARC specifically because he had the expertise ADMARC needs to continue to play a productive role in Malawi’s evolving economy. Dr. Jerry Jana explains, “I previously served as the CEO of the Chamber of Commerce and as the Chairman of the Malawi Development Corporation and of the Malawi Press Corporation, and was Malawi’s ambassador to the EU from 2000 to 2004. The president felt that with my background I could help return ADMARC to its glory days.”

Focus on commercial viability ADMARC formerly worked with farmers all over the country and this focus on direct contacts with agricultural producers will not change, but the organisation has developed a new strategy for the future that focuses on commercial viability. Dr. Jerry Jana says, “While we will continue to serve

farmers and to buy their crops and export them to earn foreign-exchange revenues, ADMARC must be operated like any private-sector business and we must eliminate any operations that do not make sense commercially.” One of ADMARC’s key goals is to add value to Malawi’s agricultural exports. The company recently acquired three cotton gins so that cotton grown in Malawi can be processed before export instead of being exported in its raw state. ADMARC will also play a greater role in ensuring food security, according to Dr. Jerry Jana. Earlier this year the company rationed maize stored in its warehouses around the country to avoid widespread famine until the next crop of maize could be harvested in March. ADMARC’s competitive edge comes from its long experience in Malawi’s agriculture sector and its well developed,

country-wide infrastructure. Now the company aims to continue to grow with the help of partners and investors. Dr. Jerry Jana concludes, “We are looking for the right partners, ones who can help us upgrade our technologies and who can provide an influx of capital. In any new partnership we form, we will provide our strengths and our partners will provide their strengths, and we will share the profits of our ventures.”

ADMARC P.O. Box 5052 Limbe Tel: +265 184 050

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THE EUROPEAN TIMES

MALAWI

Illovo Sugar (Malawi) Ltd.

Sugar Producer a Benchmark for Local Private Sector Illovo Sugar (Malawi) Ltd. illustrates the potential of Malawi’s private sector. It is the country’s only sugar producer and the top single employer, providing jobs for over 10,000 people. Listed on the Malawi stock exchange, Illovo Sugar (Malawi) Ltd. is part of the Illovo Sugar group, which is headquartered in South Africa and active in six southern African countries. In Malawi, Illovo Sugar (Malawi) Ltd. produces refined and specialty sugar for the local and regional markets and exports raw sugar to the EU and the US. Well known in Malawi for its highquality sugar at affordable prices, Illovo is also one of the country’s biggest sources of foreign-exchange revenues. It serves as a benchmark for its “green” practices, producing its own energy by operating a biomass plant fuelled with sugar-waste products.

Cotton Ginners Africa Limited Leading Cotton Processor Aims to Expand in Agriculture Sector Cotton Ginners Africa Limited, part of the Farooq Group of Companies since 1967, processes seed cotton for export to far and Far Eastern countries like the United Arab Emirates, Bangladesh, Indonesia, Thailand, Pakistan and Malaysia and is now ranked number three in the cotton sector with a market share of 17 % in Malawi. A member and Vice Chairman of the Association of Malawian Cotton Ginners, the company is known for its commitment to high quality standards and for its sound financial management. It has received support from major financial institutions as it pursues its ambitious growth plans. The company is in discussions with MITC to develop a new cotton gin in Malawi which will be the biggest in the SADC region. The project, budgeted at €36.2 million, would cover the entire cotton value chain, including spinning, weaving, a textiles mill and the production of finished garments.

Patrick Mitchell, Managing Director

Illovo Sugar (Malawi) Ltd. has significant agricultural, milling and refining assets at the Dwangwa sugar estate in central Malawi and at the Nchalo sugar estate in the southern part of the country. The company processes around 2.3 million tonnes of sugar cane per year to produce around 300,000 tonnes of sugar. Illovo Sugar Malawi accounted for 43% of the Illovo group’s operating profits in the 2011-2012 financial year and will continue to lead the way in Malawi’s agriculture sector.

Illovo Sugar (Malawi) Limited Private Bag 580 - Limbe - Tel: +265 1 843 988 illovomalawi@illovo.co.za - www.illovosugar.com

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Abdul Rehman, Managing Director

Managing Director Abdul Rehman explains that Cotton Ginners Africa plans to expand in the agriculture sector through investing in growing its own cotton as well as other crops and in irrigation systems to supplement the erratic rains. He says, “We are looking for technology partnerships for our agriculture ventures. We are also focussing on enhancing recognition of our brand and on training our staff abroad to help us continue to improve our standards. In a short period of time, we have developed big demand for our products. This is a sign of success, and we expect this trend to continue.” Cotton Ginners Africa Limited is committed to playing a key role in Malawi’s economic development as it expands through the cotton value chain. Abdul Rehman explains, “We are very confident about the future. With our dedicated team, we will continue to work closely with the government of Malawi to improve the country as a whole through job creation and generation of foreign exchange and to drive forward our company’s growth.”

Cotton Ginners Africa Limited P/Bag 594 - Limbe - Tel: +265 212 823 996/888 823 996 abdul@cgalmw.com - ruby@malawi.net

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• Harnessing Renewable Energy Resources • Significant Energy-System Upgrades in Progress

Energy

“With all the sunshine in Malawi, solar power has great potential here.” Hon. Ibrahim Matola, Minister of Energy


THE EUROPEAN TIMES

MALAWI

Harnessing Renewable Energy Resources Hon. Ibrahim Matola, Minister of Energy, discusses Malawi’s energy-sector development strategies. European Times: What are your ministry’s priorities for the energy sector? Ibrahim Matola: Malawi needs more energy to keep up with demand and with the country’s population growth. We also need to provide power for more people; only 15% of our population has access to electricity. We are focussing on renewable energies, including solar, biomass and wind power, but we believe that hydropower is the type of energy with the most potential in Malawi. We are currently in talks with China’s CGGC concerning a multi-million-euro investment in two hydropower plants, one to produce 150 MW and the other 300 MW. We are also promoting small hydropower projects to supply rural areas with electricity as part of our rural electrification plan. At the same time, we are developing some biomass projects along with Malawi’s forestry department. Along with this we have launched a campaign to promote energy efficiency, encouraging people to use less electricity during peak periods. We are also looking to invest in solar panels. With all the sunshine in Malawi, solar power has great potential here. European Times: What progress are you making in providing adequate energy for businesses and individuals? Ibrahim Matola: Malawi used to suffer a lot of power blackouts but

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Hon. Ibrahim Matola, Minister of Energy

the situation has improved greatly and is now under control. Currently the cost of electricity is relatively low in Malawi and we are exploring a double tariff system. We are also upgrading and expanding our power grid by laying cables through Lake Malawi to get connected to our neighbours Zambia, Tanzania and Mozambique. We want to be able to export electricity not being used during peak and non-peak hours. We are confident that if Malawi can harness its hydropower potential, this country could become the largest hydroelectricity producer in the region and even become a net exporter.

European Times: Why should investors in energy projects target Malawi? Ibrahim Matola: We offer great opportunities for independent power producers through concessions, and we have access to EU funding for energy-sector development. This means we are concentrating on clean energy because the EU only funds clean energy projects. We already have a number of foreign players active in our energy sector, including JICA and CGGC. To enhance our investment attractions in the energy sector, we are coordinating our energy policies with those of the Southern African Development Community as a whole.


THE EUROPEAN TIMES

Energy

Significant Energy-System Upgrades in Progress Boosting energy supplies and finding ways to bring energy to more people and businesses all over the country is crucial for Malawi. The country’s current energy-generation capacity is around 300 MW, yet peak demand is expected to reach around 400 MW by the end of 2013 and will continue to rise by about 5% per year, according to the World Bank. Only around seven percent of Malawi’s population (even less in rural areas) currently has access to electricity, and around 20% of the country’s generated energy is lost during the transmission and distribution process, according to the World Bank. “The existing system is greatly strained and the frequency of both scheduled and unscheduled electricity-supply interruptions is increasing, affecting businesses and households,” commented Sandra Bloemenkamp, Country Manager for the World Bank in Malawi, in 2011.

Support from World Bank, Millennium Challenge Corporation The World Bank is providing €63.4 million for the Malawi Energy Sector Support Project, which was launched in 2011 and is to be completed by late 2016. The project focuses on rehabilitating, upgrading and expanding the existing distribution network and includes feasibility studies for possible new hydropower stations; hydropower provides 95% of Malawi’s generated energy. It will also support capacity-building and technical assistance for the project’s main implementing agencies, which are the Ministry of Natural Resources, Energy, and Environment and the Electricity Supply Corporation of Malawi (ESCOM). The support from the World Bank complements the government’s recent investments in the energy sector, which include financing the Kapichira II power plant. Other international players are also helping Malawi develop its energy system. The US-based Millennium Challenge Corporation recently signed a €264-million agreement with

the Malawi government to support energy-sector projects, including the government’s Rural Electrification Programme (MAREP). Malawi is also investigating other renewable-energy resources besides hydropower. Malawi has significant solar-power, wind-power and biomass-energy potential, and geo-thermal resources are being explored in the Great Rift Valley. Meanwhile, NuEnergy Gas has launched an airborne geophysical exploration for shale-gas resources and coal-bed methane at its 346-km² licensed area in the Chikhwawa district, and Intra Energy Corporation (IEC) has announced that it will build and operate a 120 MW coal-fired power station in Malawi through a wholly-owned subsidiary. Fuelling the future is a top priority for Malawi, and international investors are welcome to get involved in the country’s high-potential energy sector, for example through publicprivate partnerships.

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Electricity Supply Commission of Malawi

Power Utility Working to Improve Electricity Access The Electricity Supply Commission of Malawi (ESCOM) plays a crucial role in the national economy by supplying electricity to corporate and individual customers throughout the country. The state-owned utility, founded in 1998, is the sole energy-provider in Malawi and is responsible for generating, transmitting and distributing electricity.

Its main challenge is to boost supplies of energy to meet growing demand. ESCOM’s total installed energy capacity is around 300 MW, while energy demand in Malawi is expected to reach at least 400 MW by the end of 2013 and will continue to rise as the country’s economy develops and its population grows. ESCOM, which serves around 200,000 customers, is organised into four business units in order to improve efficiency and service delivery. These are the generation unit, the transmission unit, the distribution unit, and the head office. ESCOM also has regional entities in charge of operations in northern, central and southern Malawi, and it supports a number of corporate-socialresponsibility programmes throughout the country. ESCOM is headed by CEO John Kandulu, who was appointed last year.

ingly slowed down in recent years by aquatic plants and debris clogging their systems, while all the country’s power plants urgently need updating and modernisation. In addition, low rainfall can reduce hydropower generation along the Shire River significantly, and ESCOM is often forced to practice load-shedding to complete repairs and maintenance of its plants, which results in frequent blackouts. Meanwhile, energy demand continues to increase, from individual customers as well as from heavy and light industry, including mining, and from the agriculture and services sectors. Electricity tariffs in Malawi are low, and ESCOM recently was forced to raise them to help finance urgently needed improvements of the country’s energy grid.

Boosting generation capacity

Strategies creating investment potential

The ESCOM generation unit handles all energy production in Malawi, 95% of which is through hydropower. The country has a cascaded group of interconnected hydroelectric power plants on the middle part of Shire River, including Nikula Falls A and B; Tedzani Falls I, II and III; and Kapichira Falls. Malawi also has a small hydro plant on the Wovwe River, a diesel power plant in Mzuzu, and two thermal plants at Likoma Islands and Chizumulu Islands.

To cope with its many generation problems, ESCOM has devised a number of strategies, many of which are creating opportunities for foreign investors in Malawi’s high-potential energy sector. ESCOM aims to license independent power-producers, launch new power plants, eventually vertically unbundle its operations, and step up regional energy links.

Ensuring reliable, adequate energy supplies in Malawi involves a number of major hurdles for ESCOM. The hydropower plants on the Shire River have been increas-

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One promising regional partnership is between Malawi and Mozambique and involves establishing a 79-km power line from Matambo, Mozambique to Phombeya, Malawi. This will be the first connection between Malawi’s power grid and a neighbouring power system.


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Energy

ESCOM’s proposed new hydropower plants include a potential 175 MW facility at Fufu Falls in northern Malawi; a potential 140 MW plant at Kholombidzo Falls in the southern region; and a potential 120 MW plant at Mpatamanga Falls, also in southern Malawi. Other renewable energies have growth potential in Malawi and can help meet energy demand, including wind-power plants along Lake Malawi as well as solar and biomass plants.

Upgrading transmission infrastructure ESCOM’s transmission unit also faces daunting challenges. ESCOM has a relatively extensive transmission system through a 132kV spine that runs the length of the country and connects to all main towns, with sub-transmission lines of 66kV further extending the system. The level of electrification in Malawi is, however, extremely low. Only around 25% of urban households and 1% of rural households have access to electricity supplies, and Malawi’s overall rate of electrification is estimated to be around 7% to 8%. The Malawi Rural Electrification Programmme (MAREP) is the government’s project to boost rural electricity access, and to support this programme ESCOM has created its own MAREP department within its distribution unit. All power infrastructure established through

MAREP is owned by the government of Malawi but managed and maintained by ESCOM. Malawi’s transmission infrastructure includes high-voltage power lines, power transformers and switchgear. The system is plagued by high losses as a result of the need to transport electricity at low voltages over long distances. Malawi’s transmission lines cover around 2,395 km and transport power at 66,000 volts and 132,000 volts. Around 70 transformers are located at 39 substations. Challenges ESCOM’s transmission unit must cope with in addition to energy loss include deterioration of wood and metal power poles due to termites, weather, erosion, fire, theft and malicious destruction. ESCOM is stepping up surveillance of its transmission lines while also working to update and expand Malawi’s energy grid.

Improving distribution and customer service ESCOM’s distribution unit focuses on serving the company’s customers and on operating and maintaining medium and low-voltage lines, transformers and associated switchgear. The division has five departments: maintenance, marketing and business development, customer service, MAREP activities, and performancemonitoring and revenue-protection. ESCOM’s head

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office handles all the company’s financial, ICT, human resources, administration and security activities. To help meet its many challenges in the energy sector, Malawi is establishing international partnerships. A major step forward is the five-year, €264-million (US$350-million) Malawi PowerSector Revitalisation Project financed by the US-based Millennium Challenge Corporation (MCC). It aims to increase incomes and reduce poverty by revitalising Malawi’s power sector and improving the availability, reliability and quality of power supplies through close cooperation between MCC and ESCOM and other government operations.

Millennium Challenge Corporation project MCC put the project on hold in 2011 because of a lack of cooperation from Malawi’s previous government, but got the initiative back on track following the election of President Joyce Banda. On a visit to Malawi in 2012, MCC CEO Daniel W. Yohannes met with President Joyce Banda and commented, “The relationship between the US and Malawi is strengthened by our shared commitment to democratic governance. President Joyce Banda deserves much credit for the bold reforms she is undertaking. Yet I share her recognition that this work would not be possible without the support of the people of Malawi. They will need to continue to take the courageous steps necessary to deepen this country’s democracy.” The MCC project will include building a new 220 kV backbone transmission line from the Nkula B power plant

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to Lilongwe and a parallel voltage line to the existing 66 kV and 33 kV lines from Chintheche-Luwinga-Bwengu in the northern part of the country. The new backbone is expected to significantly increase the reliability of power supplies throughout the country and to reduce energy losses considerably. The MCC project in Malawi also includes rehabilitating the Bunda electrical substation, establishing semi-annual benchmarks for reform in the energy sector, a plan for a phased approach to tariff reform, technical support for ESCOM in its efforts to build capacity, and allocation of funding for a turnaround facility for ESCOM. MCC expects the project to benefit around five million residents of Malawi and to bring over €1.7 billion in additional revenues to the country over 20 years. Through partnerships like the MCC project, ESCOM is working hard to meet the major challenges it faces in bringing adequate and reliable power supplies to Malawi’s people and businesses.

ESCOM

9 Haile Selassie Road P. O. Box 2047 Blantyre Tel: +265 182 2000 info@escom.mw www.escom.mw


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• New Survey to Give Accurate Picture of Vast Minerals Energy Resources • Mining Industry Positioned as Major Economic Driver • Establishing the Right Foundations for Mining Industry

Mining

“Malawi offers outstanding growth prospects in the mining sector.” Hon. John Bande, Minister of Mining

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New Survey to Give Accurate Picture of Vast Minerals Resources Hon. John Bande, Minister of Mining, discusses new developments in Malawi’s mining sector. European Times: How is the current government supporting the development of the mining industry? John Bande: The big breakthrough this year will be a geological survey that will take place over 14 months and will be financed by the World Bank, the EU and France. The survey will focus on the Rift Valley, which is known for its abundance of natural resources. We believe we will find gold, diamonds, rare earths and other minerals. We want to have up-to-date information on our resources before we offer concessions. We aim to open up the mining industry step by step. Developing natural resources is delicate and you only get one shot to do it right. President Joyce Banda instigated this geological survey and she established the Ministry of Mining, which was formerly part of the Ministry of Energy. Our ministry is working hard to establish the right foundations for the mining sector’s development and investment. We already have some successful mining operations here, including by Paladin Energy Ltd., and Malawi has attracted a lot of international interest, for example from the UAE concerning Lake Malawi’s possible oil resources.

“We welcome investors to come here and explore Malawi’s vast untapped potential.” European Times: What are some specific opportunities for investors? John Bande: We have large amounts of coal not far underground and so very easy to mine at low cost. Vale is one company interested in mining in Malawi, through its operation in Mozambique. The railway link between Malawi and Mozambique will facilitate this. Other mining resources in Malawi include

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Hon. John Bande, Minister of Mining

graphite, uranium, heavy-metal sands, bauxite, gypsum, limestone, and sulphides, to name a few. The mining sector currently contributes 10% of the country’s GDP and we expect this percentage to increase significantly. We plan to offer concessions in the most transparent way possible, and there will be plenty of opportunities for small-scale mining as well as large operations. The government is committed to promoting mining as a diversification measure in line with the Malawi Growth and Development Strategy. European Times: Why should foreign investors in mining come to Malawi? John Bande: Malawi offers outstanding growth prospects in the mining sector and the current government is doing everything possible to provide investors with a clear picture of our mining resources and to ensure a transparent, business-friendly environment and strong regulatory protection. We welcome investors to come here and explore Malawi’s vast untapped potential.


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Mining

Mining Industry Positioned as Major Economic Driver Malawi has singled out the mining sector as a top potential economic driver. In fact, the government plans to boost the mining industry’s GDP contribution from the current 10% to 20% by 2016 and eventually to 30%. Malawi has significant known mineral resources that include uranium, heavy mineral sands, strontianite, rare-earth minerals, phosphate, bauxite, gypsum, vermiculite, precious and semi-precious stones, limestone, dimension stone, silica sand, sulphides and coal. The country also has potential deposits of gold, platinum-group minerals and diamonds. Making the most of these resources requires significant investment from the private sector. To create a more investor-friendly environment and to set out clear objectives for the mining industry, Malawi’s President Joyce Banda launched the Mining Governance and Growth Support Project in January 2013 with the support of the World Bank. At the launch, President Joyce Banda commented, “My government will make sure that the people of Malawi will benefit from all the mining development taking place.” Malawi aims to meet the standards outlined in the Kimberly Process, the Multilateral Investment Guarantee Agency (MIGA), the Extractive Industries Transparency Initiative (EITI) and other regional and global initiatives.

Paladin Uranium Plant

Successful private investors Malawi’s biggest mining investment so far is the Kayelekera uranium mine, operated by Paladin Africa, which opened in 2009 and quickly boosted the mining industry’s GDP contribution from 3% to 10%. Additional enterprises active in Malawi’s mining sector include Terrastone Construction, Zalewa Agricultural Lime Company (ZALCO), Mkango Resources, Globe Metals & Mining, Mota-Engil, and Intra Energy Corporation (IEC). Foreign investors are increasingly targeting Malawi’s mining industry. In August 2013, the ambassadors of Zambia and Russia both met with President Joyce Banda to discuss future bilateral partnerships, and both mentioned potential opportunities in the mining sector. Zambian Ambas-

sador Charles Banda commented, “Zambia has been involved in mining since before independence and we can provide the expertise Malawi needs to become a mining country.” Mining operations in Malawi are hampered by frequent power cuts, so boosting the country’s energy production and upgrading energy infrastructure are essential in keeping the mining sector on a growth curve. Paladin Africa, for example, currently uses around 1.5 million litres of diesel per month to power generators for its Kayelekera mine and wants to connect to the national power grid. As Alexander Baum, EU Ambassador to Malawi, points out, “Malawi has vast minerals resources, and with adequate investment, the mining industry could help create a boom economy for the country.”

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Establishing the Right Foundations for Mining Industry Malawi’s Mining Governance and Growth Support Project focuses on establishing the right foundations for the long-term, sustainable growth of Malawi’s high-potential mining industry. The project, launched in January 2013, aims to improve the efficiency, transparency and sustainability of mining-sector management in Malawi. Malawi’s international partners in the project are the World Bank, which provided a €18.8 million credit; the EU, which offered €4.2 million; and the French government, which has promised €11 million and technical support for geological mapping. The last study of Malawi’s minerals resources dates from the 1980s. Specific goals of the project include strengthening the institutional capacity of the mining sector by implementing modern mining legislation and computerised mining surveys and mapping; making sure the mining industry complies with the transparency and socio-economic standards of the global Extractive Industries Transparency Initiative; and creating sustainability in the mining sector through establishing and enforcing up-to-date policies on health, safety, environmental issues and social concerns.

Improved investment climate At the launch of the new mining project, President Joyce Banda noted

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Malawi’s Mining Governance and Growth Support Project

that she is committed to making sure that small-scale mining operations, local communities around mines, and women working in the mining industry all benefit from the mining sector’s development. Alex Lemon, President of Mkango Resources, suggested that Malawi could become “the rare-earth centre of Africa, if not the world,” and explained that his company is very positive about Malawi’s current investment climate. EU Ambassador Alexander Baum noted that through the Mining Governance and Support Project, Malawi can develop its mining industry in the right way from the ground up. He said, “As a late comer, Malawi has the chance to learn from other countries.” Graeme Robertson, Chairman of Intra Energy Corporation (IEC), which is mining for coal in Malawi

with a local partner, also attended the launch of the new project. He said, “The granting of coal-mining and exploration leases in Malawi allows the development of an internationalstandard coal mine to supply industrial markets and support coal-fired electricity generation. This provides the base for what is needed to support growth and prosperity in Malawi – jobs and electricity generation.” An important follow-up to the Mining Governance and Growth Support Project is the Mines and Minerals Policy, announced by Malawi’s Minister of Mines, John Bande, in April. The minister notes that the government wants the mining industry to help bring in more foreign-exchange revenues as well as make a major contribution to Malawi’s GDP.


• Ministry Focussing on Upgrading Infrastructure • Transport Infrastructure Upgrades Keeping Economy on the Move

Transport & Public Works

“We are open to international partnerships and we welcome international investors.” Hon. Mohammed Sidik, Minister of Transport and Public Works


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MALAWI

Ministry Focussing on Upgrading Infrastructure Hon. Mohammed Sidik, Minister of Transport and Public Works, discusses his ministry’s projects and priorities. European Times: What role is your ministry playing in Malawi’s economic development? Mohammed Sidik: President Joyce Banda has made the Ministry of Transport and Public Works one of the five key ministries in Malawi’s Economic Recovery Plan. We are getting some major infrastructure projects back on track and we now have projects in all regions of the country, including the main northsouth highway which will soon be completed. The main objective of this ministry is to ensure cheap, competitive and safe transport systems. All Malawi’s development projects depend on this ministry since all need good infrastructure. European Times: What are some of your current projects? Mohammed Sidik: We are launching many new road projects and transport corridors, and we have opened a ring road allowing trucks from Zambia and Tanzania to bypass the centre of Lilongwe. We recently completed the road from Karonga to the Zambian border, and we are working on rural roads to help support projects in agriculture and mining. Malawi’s rail system dates from around a century ago and has been neglected but we are developing 167 km of track and opening a rail connection to Mozambique, which will reduce the

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Tekst onder foto: Tea plucking at the Thyolo Tea Estates

© Ministry of Tourism Lilongwe

costs of transporting coal by around 40%. Our goal is to reduce overall transport costs in Malawi by 30% per year. Concerning air transport, we want to encourage more airlines to fly here, and we are upgrading our airports. We are also offering concessions to companies providing transport services on Lake Malawi.

transport projects are through public-private partnerships. Our goal is to boost the private sector’s involvement in infrastructure projects. The government of Malawi has already made great progress in improving the business environment and we have reduced the time it takes to start a business to a maximum of one week.

European Times: What are your main sources of funding?

European Times: Why should international investors target Malawi?

Mohammed Sidik: The governments of China and Japan, the Kuwait Fund, the European Union − which provided 20% of our funding in 2012 − and international funding organisations are all providing support. Around 30% of our budget comes from the government of Malawi, and most of our rail and air-

Mohammed Sidik: Many sectors offer significant potential and there are great growth prospects here, especially as Malawi’s economy develops closer links with neighbouring countries. We are open to international partnerships and we welcome international investors.


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Transport & Public Works

Mota-Engil

Global Leader Transforming Malawi’s Infrastructure Mota-Engil has positioned itself as a one-stop shop for world-class construction and transport provider in Malawi. With over 66 years of experience as a leader in Portugal, the Mota-Engil group is known worldwide for its excellent performance in the fields of engineering, construction, transport and logistics, mining and energy. Mota-Engil has operations in Europe, Africa and Latin America and has been active in Malawi for over two decades. The company has steadily expanded its portfolio of services over the years and is known for its high international standards as well as its competitive value for money.

One-stop-shop, value-added services

Jose Dinis da Silva, Managing Director

Jose Dinis da Silva, Managing Director of Mota-Engil Malawi, explains, “We are able to build houses, dams, roads, rail systems, bridges, ports and more, and our guiding principle is to complete our projects on time. We can also handle all our customers’ shipping needs. For example, the price that we can offer to ship goods from northern to southern Malawi via the lake is much less costly than for shipments by road. Therefore, we offer foreign mining companies, agriculture enterprises and others the chance to reduce their costs by working with us.”

240-km of railway between Malawi’s Mozambique border and Nkaya Junction. This section is part of a 900-km railway link between the coal-mining concessions of Mozambique’s Moatize and Nacala Harbour, and is an essential route for cost-effectively transporting Africa’s mineral resources to global markets.

Mota-Engil has made a strong commitment to Malawi, where it is particularly active in the road and railway construction, mining exploration, transport and logistics sectors. “Malawi is the Mota-Engil group’s second-largest market in Africa. We began by focussing on road construction here and we are diversifying into other business lines. We now handle all new rail construction in Malawi,” Jose Dinis da Silva says.

New rail project to transform economy In fact, Mota-Engil’s rail projects are set to transform the national economy. The Mota-Engil group won the tender for the huge Nacala project to build two sections totalling

Mota-Engil Malawi will handle the technical and humanresources aspects of the project. Jose Dinis da Silva says, “One of the challenges that Malawi continues to face is the lack of transport infrastructure for exports. Furthermore, the cost of shipping is much too high right now. This important rail project, which is set for completion by June 2014, will greatly reduce the costs of transporting goods for import and export in this country.”

Entering into the tourism sector Through the Concession Agreement signed with the Malawi Government for the management and operation of Malawi Lake services, Mota-Engil has the obligation to participate in the development of the tourism sector and has currently embarked on the development of a five-star hotel on the southern shores of Lake Malawi in Monkey bay. Our architect has just completed the first draft of the hotel

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design. It will be a ranch-style resort, with a beautiful pool, a golf course and an inlet connecting the pool to the lake. We are beginning to open discussions with prospective hotel operators and are looking forward to partnering with a world famous brand name hotelier.

Upgrading Malawi’s road network Concerning road construction, in May 2013, Mota-Engil completed the major rehabilitation of the M1 motorway project in Malawi and currently has several other projects underway throughout the country. These include building a new 60-km road from Zomba to Blantyre, a 81-km road from Chikwawa / Ngabu to Bungula, a 100-km road from Chiringa to Chiradzulu, the 15-km Lilongwe Bypass, and a project to rehabilitate the road leading to a military camp and some roads and improving facilities inside the camp in Changalume, for Malawi’s Ministry of Defence.

Developing the shipping sector

Mota-Engil is also stepping up its presence in Malawi’s shipping sector through its subsidiaries Malawi Shipping Company, which in 2010 won a concession to provide services on Lake Malawi, and Malawi Ports Company, which was recently granted a 35-year government concession to operate all Lake Malawi’s major ports. Jose Dinis da Silva says that Mota-Engil aims to invest in modernising port infrastructure, installing new equipment and training staff in order to upgrade port operations. Mota-Engil also has a shipyard in Monkey Bay, where the company is currently building a new 35-metre, €6-million ship which will operate on Lake Malawi. Jose Dinis da Silva says, “We are very well placed to develop Malawi’s shipping sector. One of our ships, MV Ilala, is 60 years old but we have just completed her major rehabilitation, the ship is now in excellent technical condition. The ship will continue to sail around Lake Malawi every week. Mota-Engil operates three cargo vessels in Malawi, one with a capacity of 700 tonnes, one with 650 tonnes and the other with 300 tonnes. “We are transporting coal, fertiliser, bitumen and cement. In addition, we have also been approached by several companies interested in using our vessels for research purposes in the oil and gas sector.

Mining Sector “We are already involved in mining activities, with Paladin Energy in the exploration and mining of uranium at Kayelekera Uranium Mine in northern Malawi,” Jose Dinis da Silva explains. Mota-Engil also has its own teams involved in mining exploration in Malawi. Mota-Engil is doing exploration for mining on several concessions attributed to the government of Malawi.

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Transport & Public Works

Social Responsibility Programme As part of its long-term commitment to Malawi’s development, Mota-Engil supports a number of corporate-socialresponsibility projects. Jose Dinis da Silva says, “We believe that we have a responsibility to help grow and take care of the nation of Malawi. We have several social responsibility activities in place such as: supporting the Presidential Initiative on Maternal Health and Safe Motherhood, Fight against AIDS, provision of wood as source of energy to communities, provision of water to communities, community engagement - cheering of the sick and orphans, ensuring a healthy and safe community/environment, refurbishment of access roads and infrastructure and support to hospitals giving drugs. We are especially proud of our project to transform the MV Chauncy Maples, Africa’s oldest vessel, into a clinic. The vessel will sail to different ports within Malawi offering healthcare to local people. We hope that this ship will be operational in two years.”

Improving Malawi’s human resources The company has a very positive relationship with the government of Malawi and is one of the country’s top employers. Mota-Engil has hired around 4,000 locals, including engineers, foremen, mechanics, attorneys, humanresource managers, accountants and more. Jose Dinis da Silva points out, “We also employ many expatriates, and we are known for taking very good care of our workforce, including providing a reasonably good remuneration, which we improved recently, and training local workers to do more skilled jobs.” Mota-Engil is looking forward to strong economic growth in Malawi as the country continues to develop. The company welcomes the chance to partner with foreign investors taking advantage of Malawi’s high-potential economy. Jose Dinis da Silva points out, “I have been working for Mota-Engil for more than 30 years and I am convinced that there are many exciting opportunities here in Malawi in several sectors, including agriculture, irrigation, energy and mining.” MotaEngil is ready to work with other foreign investors and achieve success in Malawi.

some dams and we will be bidding for tenders as they become available. We are also ready to build irrigation systems for agricultural projects. Our mission is to serve as a life-long partner for Malawi,” Jose Dinis da Silva says. For investors in Malawi, Mota-Engil is definitely a local partner of choice. As Jose Dinis da Silva explains, “We already have a 20-year track record of successful operations here in Malawi, and we will continue to work to develop the country, serve our customers and partners, and create a better quality of life for Malawians.This new mindset and approach to opportunities is boosting our ambition to lead and step forward. Our vision is now better tuned and refined and the definition of our market has gained volume, importance and dimension”.

Mota Engil, ‘We are what we do.’

Developing projects in the energy sector The company aims to continue to play a leading role in road and rail construction throughout the country and to offer new logistics services as well as open new ports. Mota-Engil Malawi is also planning projects in other sectors. “In the energy sector, for example, I hope we will be able to build

Mota Engil Engenharia e Construcao SA Nasra House City Centre P.O. Box 31379 - Lilongwe Tel: +265 177 3725 jose.dinis@mota-engil.mw - www.mota-engil.pt

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Lafarge Group

Cement Leader Known for World-Class Quality Lafarge Group is the world leader in building materials, specialising in cement, aggregate, concrete and gypsum. Lafarge Cement Malawi is a subsidiary of the Lafarge group and has been operational in Malawi since 2002. It is part of Lafarge Cement South East Africa Cluster. General Manager Bruno Hounkpati explains, “Each country’s operations are managed independently to ensure the most rapid and efficient service. Lafarge Cement Malawi is well known in Malawi for the high quality of its products and its market leadership. We associate ourselves with the country’s infrastructure development and economic growth.” Lafarge Cement Malawi employs over 400 people and serves all types of players in the local construction sector, from doit-yourself builders to large construction companies, architects and local artisans. Lafarge is committed to providing solutions that fit the needs of all its clients.

Portfolio of innovative, high-performance products The company market leadership is the result of the unparalleled performance and reliability of its brands: Duracrete, Ordinary Portland Cement and Kumanga. These products are designed to address different needs of the construction segment. Bruno Hounkpati explains, “We are well placed to support growth and development in Malawi because we offer high performance, high-quality products at the right price for our clients. We are currently exploring more innovative construction solutions that are new to the market, to address emergence of sophisticated needs in the construction segment.”

Bruno Hounkpati, General Manager

Another goal for Lafarge Cement Malawi is to promote sustainable construction through environmentally friendly construction solutions. Bruno Hounkpati points out, “Many local people make clay bricks by burning firewood, which uses up Malawi’s timber resources causing massive deforestation and soil erosion. We are working to provide alternative building solutions that will reduce deforestation and will ensure that our own production processes are environmentally friendly.” Lafarge Cement Malawi also places a high priority on employee safety and on providing support for local communities. The company’s corporate social responsibility projects in Malawi include several health and education initiatives.

For the existing portfolio, Lafarge Cement Malawi strives to enlarge its offer to the market by accelerating differentiation in their core business: enlarging their product range and service offer.

Lafarge Cement Malawi is certified ISO 9001:2008 and has positioned itself as the ideal local partner for foreign investors in construction and development projects in Malawi. The company also aims to continue to be involved in big government projects, including the construction of a new parliament building, the conference centre, University of Science and Technology and the Tete-Nacala railway line among others. Lafarge Cement Malawi continues to invest in plant upgrades and new technologies as part of its drive to meet the highest possible quality standards. Bruno Hounkpati says, “People who know Lafarge Cement Malawi know that it has the best-quality cement in the market.”

Bruno Hounkpati says, “We are working with many different companies here in Malawi and we earn most of our revenues through sales to trade and through major projects. We foresee great opportunities in Malawi’s ongoing infrastructure development.”

P.O. Box 523 - Blantyre - Tel: +265 1871933/870031 Lafarge.mwcem@lafarge.com - www.lafarge.mw

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Transport & Public Works

Transport Infrastructure Upgrades Keeping Economy on the Move

©Gualtiero Boffi | dreamstime.com

Malawi is steadily improving its transport infrastructure, including opening a new north-south highway, and the government is looking for partners for a wide variety of additional transport-infrastructure projects. Mohammed Sidik, Minister of Transport, says, “Our goal is to boost the private sector’s involvement in infrastructure development, and most of our current air and rail projects are publicprivate partnerships.” Infrastructure is one of five key areas targeted in Malawi’s current Economic Recovery Plan. Foreign investors can choose build-operate-transfer or build-operate-own schemes, bid for concessions or form joint ventures with local companies.

Many current projects aim to expand Malawi’s international and domestic air-transport services. Kamuzu International Airport in Lilongwe is being upgraded and will soon have rehabilitated runways and taxiways as well as a new apron. A new telecom system is next on the government’s list of improvements for the airport.

Chileka Airport to have new terminal Chileka Airport in Blantyre is also set for modernisation and expansion and is to have a new terminal as well as a wider runway in a project budgeted at €770.2 million. In April this year, the government gave Kenya Airways the right to fly into Chileka Airport beginning in June. A new airport is being planned for Mangochi at the southern end of Lake Malawi to handle tourism traffic, and the government is looking for investors to get this project off the ground. Developing Malawi’s road network is another priority. The EU’s Country Strategy Paper for Malawi (2008-2013) focuses on agriculture and food security

as well as transport infrastructure, particularly roads. The EU will support the completion of a number of crucial road-infrastructure projects, including connections to Zambia and Tanzania. Malawi’s rail network has been neglected for decades but is now the focus of significant modernisation. A planned new rail link to Mozambique will reduce transport costs on that route by around 40%. Malawi is also developing transport on Lake Malawi and the government is offering concessions for ferry operations. Private investment is crucial for Malawi’s infrastructure development, and the government is commitment to ensuring the right conditions for every publicprivate infrastructure partnership’s success. Minister of Economic Planning and Development Ralph Jooma says, “Measures that have been adopted to curtail risks and ensure sustainability of results include ensuring comprehensive financing strategies, ensuring government ownership and leadership at different levels, timely and effective management plus technical support through sector working groups.”

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Toyota Malawi

Benchmark in Malawi’s Business Sector Toyota Malawi represents the exceptional potential of international investment in Malawi’s innovative local companies. Toyota entered the Malawi market in 2001 by acquiring a leading family-owned enterprise founded in 1964. Rosemary Mkandawire, CEO, explains, “When we became part of the international Toyota group, we strengthened our systems and upgraded our services to live up to the global Toyota brand name. We have grown steadily and are currently planning to build a new facility in Lilongwe City.” Around 70% of Toyota Malawi’s clients are multinationals active in Malawi; the company also serves individual clients and local enterprises. Toyota Malawi offers the full range of Toyota vehicles, from the economy-model Corolla to the Hilux, Land Cruiser, and Prado lines, as well as Toyota trucks. The company also distributes Toyota parts and provides world-class repairs and other services, all of which adhere to Toyota’s industry-leading international standards. Looking to the future, Toyota Malawi invests its revenues from vehicle sales in expanding its operations and covers its running costs from sales of parts.

New generation of world-class managers Rosemary Mkandawire represents a new generation of female managers in Malawi’s business sector. She explains that she has the authority to make rapid decisions while working with the regional Toyota management team as well as the parent company in Japan. She says, “I believe my role as CEO of a company like Toyota Malawi will inspire other women in Malawi to work hard and reach higher levels in Malawi’s business world.” Toyota Malawi is looking forward to continued strong growth as the country’s economy develops. Rosemary Mkandawire says, “The mining sector offers a lot of potential for us through sales of vehicles and accessories, and we will also expand along with Malawi’s export activities. We offer our customers top-quality vehicles, true international standards and a recognised international brand, all of which are essential in a growing economy.”

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Rosemary Mkandawire, CEO

Toyota Malawi is very committed to supporting the people of Malawi and finances a number of community-service projects, including a children’s hospital. Rosemary Mkandawire concludes, “We aim to be a good corporate citizen here in Malawi by paying taxes, funding all kinds of local initiatives, working with garages to upgrade standards, and doing our part to improve Malawi’s business environment. Two years from now, I foresee that Toyota Malawi will have expanded its facilities, gotten involved in export activities, and made major contributions to the President’s drive to fight poverty in this country.”

Toyota Malawi Head Office P.O. Box 430 - Blantyre Tel: +265 184 1943 customercare@toyotamalawi.com www.toyotamalawi.com


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• Improving Access to Information and ICT Services • Liberalised ICT Sector Welcomes Innovative Services

IT & Telecom

“We need more providers of communication services to help bring costs down through competition..” Hon. Moses Kunkuyu, Minister of Information

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Improving Access to Information and ICT Services Hon. Moses Kunkuyu, former Minister of Information, discusses the challenges of providing high-quality ICT and information services. European Times: What are the main responsibilities of the Ministry of Information? Moses Kunkuyu: This ministry works to bring up-to-date information of all kinds to residents throughout the country. We produce news reports and publications, and the Malawi News Agency distributes information to the public through the ministry’s web site. The ministry oversees the Malawi Broadcasting Corporation, Malawi Posts, and the independent regulator the Malawi Communications Regulatory Authority (MACRA). MACRA has its own board and makes its own decisions, but overseeing its operations falls within the ministry’s responsibilities. European Times: What are your ministry’s priorities concerning information services and ICT infrastructure? Moses Kunkuyu: We are trying to provide more information services to remote areas. For example, if more farmers are able to learn about modern farming techniques, they can boost their production and find new markets for their crops. In addition, we are trying to boost computer literacy throughout the country by providing information about computer skills. We know that if more rural residents are

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Tekst onder foto: Tea plucking at the Thyolo Tea Estates

Hon. Moses Kunkuyu, former Minister of Information

computer-literate, they can improve their own lives and contribute to Malawi’s economic growth. The challenges we face include lack of dependable power supplies in rural areas, lack of access to computers among rural residents, and limited network coverage. At the moment we have only eight sites out of the fifteen sites that will be required for us to reach the entire nation. This ministry depends on public funds so we do not have the ability to do everything we want as quickly as we would like. This is why we are very open to working with private-sector investors. European Times: What are the main areas where ICT investment is particularly needed in Malawi? Moses Kunkuyu: We need more providers of communication services to

help bring costs down through competition. Prices for communications services are currently high here compared to prices in neighbouring countries. The other area that needs investment is ICT training. We particularly welcome investors in these two segments of the ICT sector. European Times: Why should international investors choose Malawi? Moses Kunkuyu: Malawi has had many problems but is beginning to get the economy back on track. The government’s new economic recovery plan is a step in the right direction. Malawi has great potential in many areas and is definitely a country on the move, and we are ready to work with privatesector investors to help us achieve our ambitious goals.


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IT & Telecom

Liberalised ICT Sector Welcomes Innovative Services Malawi’s open and liberalised ICT sector, overseen by the Malawi Communications Regulatory Authority (MACRA), offers outstanding potential for investors. The government has targeted ICT development as an essential factor in its drive to reduce poverty, promote economic growth in rural areas and attract local and international investment.

While Malawi has implemented 3G services and is preparing to deploy 4G, only around 30% of the country’s population has regular access to telecom services. Charles Nsaliwa, General Director of MACRA, observes that Malawi could reach 50% telecom-services penetration by 2020 if investment in the ICT sector continues. He adds that MACRA is stepping up its assessments of ICT services available in the country to ensure high quality. Malawi now has three telecom providers: Malawi Telecommunications, Airtel, and Telekom Networks Malawi. MACRA recently revoked the license of a third mobile operator, G-Mobile, because of its failure to roll out services in the time frame set by its licensing agreement. Malawi Telecommunications Ltd., 99% government-owned, has the monopoly on fixed-line services and continues to invest in new technologies and in expanding its network. Mobile operator Telekom Networks Malawi (TNM), established in 1995, was Malawi’s first mobile operator.

© Malawi Travel Marketing Consortium Victoria Avenue, Blantyre

TNM now serves over 74% of the country and operates a 3.5-generation network which includes highspeed broadband multimedia services in addition to GSM/GPRS/EDGE. Airtel Malawi, launched as Celtel in 1999 and later marketed as Zain Malawi, has operated as Airtel since 2000. It now has around 2.5 million subscribers and hopes to raise that total to 7 million. It offers international roaming, prepaid services, Internet connections, email, e-banking and other services.

Focus on innovation, expansion in rural areas Malawi is currently switching from analogue to digital broadcasting and Charles Nsaliwa points out that this

will lead to more innovation in ICT services. He says, “As we gradually phase out analogue and migrate to digital, we want to expand 3G and 4G technologies which will deliver better Internet services. We also want ICT operators to use the saved space to provide better-quality services, as Airtel is doing by offering Airtel banking.” Malawi still has a long way to go in ICT development, and one top priority is to enhance services in rural areas where 80% of the country’s population lives. Charles Nsaliwa points out, “We must take ICT services beyond urban areas. Doing this will raise the penetration rate to 60% or 70% from the current 30%, but until we reach 100%, we have not done enough.”

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Malawi Communications Regulatory Authority

Maintaining World-Class Standards in High-Potential ICT Sector The Malawi Communications Regulatory Authority (MACRA) plays a crucial role in upgrading the country’s ICT sector and in creating the right conditions for investors. As Malawi’s ICT regulatory body, MACRA ensures world-class standards and a level playing field for all operators entering the country’s fastgrowing ICT market. MACRA is driven by a commitment to promoting ICT development, not by any political loyalties. Director General Charles Nsaliwa explains, “MACRA is overseen by the Ministry of Information but is definitely not a politically driven organisation. One of the key concerns that investors face when coming to Malawi is the fear of political influence, but MACRA’s record shows that it is run as an independent, private-sector organisation led by a non-politically oriented board of directors.” The organisation’s main goal is to make sure that everyone in Malawi has access to modern ICT services, which means encouraging more ICT-services providers to enter the market. For investors, Malawi’s ICT sector is ‘a land of opportunity’, according to Charles Nsaliwa. He points out that the country’s telecom sector in general is still in its very early stages and offers all kinds of investment potential.

Malawi currently has only two mobile operators, TNM and Airtel, yet local demand for mobile services is high and growing fast. There is definitely room for more competition in the mobile sector, Charles Nsaliwa believes. In addition, Malawi already has the necessary infrastructure in place to support mobile services, including a fully developed fibre-optic network. He says, “Around 70% to 75% of our GSM network is not yet being used, so any new operators can have the frequencies they choose. Furthermore, we continue to reinvest in our ICT network and infrastructure.”

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finances

ICT-infrastructure

through the taxes and fees it collects from operators. In other words, MACRA ploughs these revenues directly back into the industry to support further growth and improve services for both ICT-services providers and users. Charles Nsaliwa concludes, “MACRA understands that as Malawi and its business climate evolve, so do the needs of mobile operators, which is why infrastructure investment will remain a priority for us. In fact, we are currently actively looking for partners to help us continue to upgrade Malawi’s ICT infrastructure.” ICT investors looking to explore opportunities in Malawi’s up-and-coming-market can count on MACRA to give them the support they need to make their projects a success.

Room for more mobile operators

MACRA

Charles Nsaliwa, Director General

improvements

MACRA

Promoting Universal ICT Access

Salmin Amour Road Private Bag 261 - Blantyre - Tel: +265 188 3611 info@macra.org.mw - www.macra.org.mw


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• Great Progress Being Made in Coping with Healthcare Challenges • Educating the Next Generation of Leaders • Humanitarian Groups Ensuring Better Quality of Life

Health & Education

“An investment in the education of our young people is an investment in our future.” Matthews Mtumbuka, IT director of Airtel Malawi

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Great Progress Being Made in Coping with Healthcare Challenges

Malawi has been making impressive progress in improving its healthcare facilities and services. Top priorities for the government are to continue to step up prevention and treatment of HIV and AIDS, upgrade the access to and quality of healthcare for mothers and children, and enhance treatment for endemic diseases like malaria.

Malawi’s healthcare sector is overseen by the Ministry of Health, whose mission is to improve the range and quality of health services for mothers and children under the age of five, upgrade the quality of healthcare throughout the country, improve access to healthcare, ensure efficient and balanced resource allocation for healthcare services, improve the quality of healthcare professionals, and establish healthcare partnerships with the local and global private sector. Life expectancy in Malawi for both men and women is only 54 years, while the infant mortality rate is 84 per 1,000 live births, according to the Population Reference Bureau World Population Data Sheet, 2012. As in

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many developing countries, AIDS/ HIV is a major cause of both low life expectancy and infant mortality in Malawi, and the government is putting the emphasis on AIDS/HIV prevention and treatment.

Innovative approaches to AIDS/ HIV The US Centre for Disease Control and Prevention (CDC), which has been partnering with the Malawi government in healthcare projects since 2001, reports that Malawi has now established one of the most innovative and efficient HIV programs in the world. Malawi’s Ministry of Health and the National AIDS Commission


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Health & Education

handle Malawi’s response to the AIDS epidemic, with a particular focus on mother-to-child transmission. HIV prevalence in Malawi decreased substantially from 2001 to 2011, from 16.9% of the population to 10.6%, and now 323,638 patients living with HIV are receiving treatment. The estimated cost of the national AIDS response in Malawi is around €1 billion for the period 2012 to 2016 alone, according to the United Nation’s AIDS programme, UNAIDS. International donors have provided around 40% of this amount, but more international support is necessary. Malawi has already launched many effective programmes to fight HIV and AIDS, including Option B+3 for pregnant women, which has resulted in a seven-fold increase in the number of pregnant and breastfeeding women starting antiretroviral therapy. Malawi has also created a follow-up programme for children infected with AIDS; this programme is now a model for other countries.

Emphasis on treating mothers and children Improving healthcare for mothers and children is a particular focus for President Joyce Banda, who launched the Presidential Initiative for Maternal Health and Safe Motherhood soon after she took office. As she points out, “The journeys of women in my country – and in countries all over the developing world – are never easy. The health of our women in particular is central to many of our development challenges, and is an issue to which I have been devoted since I almost lost my life delivering my fourth child. It was only because I was fortunate enough to have access to a specialist in a hospital that I am alive today.” The Ministry of Health recently took a big step forward in helping

to establish Malawi’s first Public Health Institute, working in partnership with the CDC and the International Association of National Public Health Institutes. Malawi’s Minister of Health, Catherine Gotani Hara, recently visited the Norwegian Institute of Public Health to study ways public-health institutes can benefit a country’s population. Other signs of progress in Malawi’s healthcare sector include new programmes at the Malawi College of Medicine; the implementation of a national electronic-data system which includes electronic patient cards and identification; and the creation of the National Malaria Control Programme, which conducts surveys, monitors mosquito-spraying programmes, and analyses various treatment options.

International partnerships sought International partners are playing a crucial role in helping Malawi meet its healthcare objectives. One successful

initiative, developed by the EU-funded project ‘Supporting LIFE’, is an electronic application that assists local healthcare workers (Healthcare Surveillance Assistants) diagnose children’s illnesses to determine whether a child can be treated on an outpatient basis or should be sent to a hospital. Since most children in Malawi have no access to a physician, the local healthcare assistant is often the only source of help, and the new ‘app’ aims to improve this local service. At least one out of ten children in Malawi dies by the age of five, often from treatable conditions like malaria and diarrhea. “The app will force them to go through certain steps and procedures,” says Dr John O’Donoghue, Co-Director of the Health Information Systems Research Centre at University College Cork (Ireland), which is leading the project. Since around 95% of Malawi is covered by mobile-phone networks, innovative mobile services can be a highly effective tool for improving the national healthcare system. Malawi welcomes more international support as it pursues its ambitious healthcare goals.

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Educating the Next Generation of Leaders

Malawi has placed a high priority on upgrading its educational system as a means of empowering its citizens and fostering sustainable economic growth. Speaking at the graduation ceremonies of Malawi Adventist University in September 2013, President Joyce Banda commented, “My personal belief and that of my government is that we cannot achieve poverty reduction without investing in human capital.”

Malawi’s educational system still faces a number of challenges, but much progress has been made. One major step forward was the creation of the National Council for Higher Education, which is responsible for accrediting all institutions of higher learning in the country. As President Joyce Banda says, “The Council has already gone far in developing the standards and accreditation framework that will ensure that we are providing high-quality tertiary education to our young men and women for the benefit of our nation.”

Ministry of Education has ambitious goals Education in Malawi is overseen by the Ministry of Education, Science

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and Technology, which provides policy guidance and direction on all education, science and technology issues. The ministry’s vision is to make Malawi’s education sector a catalyst for positive social and economic development. The ministry is working to upgrade all schools and other educational and research institutions in Malawi and to increase access to highquality education. The ministry’s strategic development plan for the education sector between 2008 and 2017 covers a number of ambitious initiatives. These include building more primary schools to achieve a ratio of 40 primary pupils per class; building supporting facilities for schools, including libraries and


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Health & Education

recreational centres; and opening more Teacher Development Centres and teacher-training programmes throughout the country. The ministry’s plan also aims to provide each student with his or her own textbooks, to make reference materials available to all teachers, to decentralise the educational system to give more autonomy to individual schools, to upgrade schools’ management, to institute regular school inspections to ensure that standards are being met, to provide meals for primary-school pupils, and to continue to improve all state-owned secondary schools through the ‘Schools of Excellence’ programme. In the higher-education sector Malawi aims to create more distancelearning opportunities; to review curricula to respond to the country’s evolving human-resources needs; to open teachers’ colleges around the country; and to continue to upgrade and expand state-owned University of Malawi and Mzuzu University and to support the new University of Science and Technology in Lilongwe (LUSTECH).

International education partnerships

Educating women is a top priority for President Joyce Banda and her government. She says, “When we empower women with education and access to reproductive health services, we can lift an entire nation.” Eunice Kazembe, former Minister of Education, Science and Technology, recently inaugurated a project funded by the MasterCard Foundation which will support 1,275 girls in Malawi throughout secondary school. She commented, “As a female minister, girls’ education and young women’s empowerment are dear to my heart. The two in turn enable young women to become role models, access decision-making platforms, and influence programmes and policy at local and national levels.” The World Bank has been supporting education projects in Malawi for many years and reports that the country’s average pupil-teacher ratio dropped from 81 students per teacher in 2009 to 74 per teacher in 2012, mainly as the result of accelerated teacher-training opportunities, including distance learning. The TEVET Reform Project Malawi, a partnership between the University of Malawi Polytechnic and Canada’s University of Regina, is developing and implementing new technical and

vocational programmes for Malawi’s students. The project has received support from the Canadian International Development Agency.

Connect to Learn In another international partnership, Ericsson and mobile operator Airtel’s ‘Connect to Learn’ programme enables 600 students in Malawi to access ICT services through cloud-based technology. The global ‘Connect to Learn’ effort is a collaboration between the Earth Institute at Columbia University (US), Ericsson, and Millennium Promise. Students and teachers at St. Anthony and Maera secondary schools in Malawi Millennium Village are participating in the project, which has provided 55 laptop computers, broadband Internet access, online educational resources and training, and connections to other schools around the world. Commenting on the project, Matthews Mtumbuka, IT director of Airtel Malawi, says, “An investment in the education of our young people is an investment in our future. We recognise the transformational impact our industry can have on education, and are proud to collaborate with Ericsson on this initiative.”

To reach these goals, the government welcomes support from the local and international private sector. President Joyce Banda explains, “The government is keen to develop strategic partnerships with private universities.” Many international partnerships have already been launched. In March 2013, the UK’s Department for International Development announced a major new programme aimed at increasing educational opportunities for girls in Malawi; the UK has already contributed funds to provide school meals for around 800,000 students all over the country.

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Humanitarian Groups Ensuring Better Quality of Life Charitable organisations are making a significant contribution to Malawi’s economic and social development. The Gift of the Givers foundation, the Joyce Banda Foundation (founded by Malawi’s current President) and Press Trust demonstrate how targeted support from well-managed humanitarian organisations can make a big difference in a developing country.

The Joyce Banda Foundation

Gift of the Givers Gift of the Givers, whose motto is ‘a solution for Africa by Africans’, is the biggest disaster-relief organisation of African origin on the continent. A. Gaffar Jakhura, Chairman of Gift of the Givers in Malawi, explains, “We have delivered over €47.8 million (ZAR650 million) in aid to 33 countries around the world, including South Africa. We designed and developed the world’s first and largest mobile hospital, which was deployed in Bosnia. It was comparable to the best hospitals in Europe and remains unmatched to this day.” In addition to disaster relief, Gift of the Givers supports short-term and long-term

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projects in many areas, including 24 current initiatives in South Africa and Malawi in such diverse fields as healthcare, education, agricultural sustainability, life skills, job creation and entrepreneurship, food, sports and culture, and keeping people warm in winter. Gift of the Givers offers assistance to anyone in need, with no consideration of race, religion, colour, class, political affiliation or geographical boundary. A. Gaffar Jakhura says, “All our projects are needs-driven; they need to be sustainable and need to make a meaningful difference to the quality of people’s lives.” A current focus for the organisation is Sibusiso, a high-energy and protein


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Health & Education

supplement created by Dr. Imtiaz Sooliman, Founder and Chairman of Gift of the Givers. Sibusiso, made from groundnuts and soy, is indicated in cases of low energy, muscle wasting, weight loss, and weakness caused by malnutrition, tuberculosis, HIV and AIDS as well as for those who need an energy boost. Sibusiso, a completely natural product, is currently being used in 230 healthcare facilities across southern Africa, and Gift of the Givers aims to expand into other markets in Africa, Europe and beyond. Sibusiso is marketed in a ready-to-eat form, requires no cooking or refrigeration, and contains no wheat gluten or lactose. Gift of the Givers welcomes the chance to work with international partners in this and other projects.

Joyce Banda Foundation The Joyce Banda Foundation, set up by Malawi’s current President in 1998, is a Malawi-based humanitarian

organisation which provides assistance for women, children and the disadvantaged. The foundation includes the Market Women in Development project (MWAI), launched in 2010 to empower local women. Just two years after it was created, MWAI had over 100,000 members participating in its “saving circles” programme, which helps women become financially independent. The Joyce Banda Foundation also founded and supports three schools. Two of them are free, one in Zomba and the other on the land where President Joyce Banda was born and raised. They serve hundreds of students, a majority of them orphans. More than half of the students are girls, and the foundation is building two dormitories and a dining hall to provide 100 girls with free food and lodging. The foundation also runs an international school in Blantyre which provides a world-class education for scholarship and fee-paying students at all grade levels. Fees charged at this school fund other foundation projects.

In addition, the foundation has built and operates 35 orphanages all over Malawi, several youth-empowerment programmes for people of 15 to 30, and the MWAI farm a 30-minute drive from Lilongwe. The farm produces soybeans, groundnuts, cassava and sweet potatoes and maintains a herd of 35 goats. The foundation’s Passover Programme provides a poor family with a pregnant cow whose milk the family uses for food; the calf is then given to another poor family to continue the cycle. In addition to these projects, the Joyce Banda Foundation has built several clinics and homes.

Press Trust Another dynamic charitable organisation in Malawi is Press Trust. Created in 1982 by Dr. H. Kamuzu Banda, Malawi’s first President, Press Trust supports projects in the areas of education, health, social welfare, facilities for the disabled, and housing. It also steps in to provide support for other projects, including sports, culture, scientific research, disaster relief and environmental protection. Press Trust welcomes more international partnerships. Known for its transparency and accountability, it has built up a diversified investment portfolio to finance its projects, including a hedge fund in US dollars and Euros set up in 1999. One of the organisation’s recent projects was to build four new classrooms and other facilities at Kamwendo Junior Primary School in Machinga. At the inauguration ceremony, Press Trust Executive Secretary Clement Chilingulo pointed out that Press Trust has invested over €1.1 million in education projects in Malawi over the past 13 years.

The Joyce Banda Foundation

Humanitarian groups like these are providing a better quality of life for the people of Malawi.

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• Welcoming People, Exceptional Tourism Diversity

Tourism

“We know that if we can just make Malawi more visible on the global stage, we will be able to get our tourism development programmes on track.” Hon. Rachel Mazombwe-Zulu, former Minister of Tourism, Wildlife and Culture


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Tourism

The ‘Warm Heart of Africa’ Welcomes Visitors Hon. Rachel Mazombwe-Zulu, former Minister of Tourism, Wildlife and Culture, and Sosten Lingwalanya, Deputy Director of Tourism, discuss recent developments in the country’s tourism sector.

Hon. Rachel Mazombwe-Zulu, former Minister of Tourism, Wildlife and Culture

European Times: How is Malawi’s tourism sector evolving? Rachel Mazombwe-Zulu: The most important recent development is that our government has identified tourism as one of Malawi’s key growth industries and a major driver in our new national economic development plan. Because of this, a number of programmes have been launched to upgrade Malawi’s tourism appeal. Everyone involved in the tourism sector is now working very hard to identify tourism attractions, deal with any problems and market Malawi to the world. European Times: What does Malawi offer that will attract international travellers?

Rachel Mazombwe-Zulu: Our national parks are a major draw. Although we have suffered from poaching, we have embarked on a restocking programme. In addition, we want to showcase Malawi’s unique culture as a distinct feature of this country. Malawi’s traditional dances, for example, have been cited by UNESCO. We are trying to improve and promote our museums, monuments and historic landmarks and to bring them to the forefront. Sosten Lingwalanya: We are marketing Malawi as a beach, wilderness and cultural destination. Malawi has many beautiful beaches and is a gem for nature-lovers, with diverse flora and fauna as well as a variety of landscapes

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© Ministry of Tourism Nyika National Park

and completely unspoiled areas. Malawi also has a particularly rich culture since there are 12 ethnic groups and each has its own traditions and celebrations.

get more international investors into our tourism industry and that we will continue to receive support from our cooperating partners in the sector.

European Times: What are some of your main goals for the tourism sector?

European Times: What are some of Malawi’s top tourism attractions?

Rachel Mazombwe-Zulu: Bringing more international flights into our country is crucial. If we are going to improve our tourism sector, we need to develop better and more affordable international access to Malawi. Recognising the positive correlation that exists between access and number of visitors, we have embarked on a programme of improving access to our entire tourist. Another of my priorities is to increase the number of our hotel beds. Malawi does not have enough to cope with a large influx of visitors. In addition, government is working on programmes that will create a conducive environment for our visitors. For example, government is exploring possibilities of getting visas to Malawi online. Finally, we urgently need to market Malawi’s tourism attractions both here in the country and abroad. My ministry is focussing on dealing with all the challenges that are facing the tourism sector to ensure unlocking of the full potential of the industry. Our hope is that we will be able to

Rachel Mazombwe-Zulu: Lake Malawi is number one on the list, since it is a unique destination found nowhere else in the world. Malawi also has wildlife reserves and national parks which we are improving through restocking and infrastructure development. In Majete, for example, we have managed to bring back the reserve to a healthy state through a public-private partnership. Boat safaris on the Liwonde, Okavango or Zambezi rivers are also ideal for nature-lovers. Malawi’s Mulanje Mountain is the third-tallest peak in Africa and another key attraction. As for culture, our traditional dances are not to be missed.

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European Times: What about investment opportunities? Rachel Mazombwe-Zulu: We welcome international investors in tourism projects. One successful example was the popular Lake of Stars festival organised by a UK company; it

attracted people from all over the world and demonstrated the potential of private-sector involvement in Malawi’s tourism industry. I would like to see more public-private partnerships in tourism projects. We need private-sector investors and companies to serve as champions for tourism in Malawi. Privately owned hotels, car-rental operations and other services can also help to market Malawi worldwide. We know that if we can just make Malawi more visible on the global stage, we will be able to get our tourism development programmes on track. European Times: What is your personal message to our readers? Rachel Mazombwe-Zulu: Malawi is justifiably known as the ‘Warm Heart of Africa’ because of our friendly, hardworking and welcoming people, who are our best asset. Malawi also has vast and unique natural resources, beautiful landscapes, good weather and many cultural attractions, and this country’s political stability sets it apart from other nations in the region. We are working hard to make more people aware of just what Malawi has to offer. We are certain that once people around the world know more about Malawi, they will want to come here and visit. Now is the time to invest in Malawi’s highpotential tourism sector.


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Tourism

Welcoming People, Exceptional Tourism Diversity Malawi lives up to its nickname ‘the Warm Heart of Africa’ thanks to its welcoming people, whose legendary friendliness enhances the country’s many attractions for tourism visitors. In 2013 Malawi’s Ministry of Tourism, Wildlife and Culture designated September as Malawi’s ‘National Tourism Month’ in an effort to highlight the country’s great tourism potential. In fact, Malawi is a small country with huge tourism appeal, and some of Europe’s largest tour operators – including Cox & Kings, Voyages Jules Verne and Saga Travel – now feature Malawi in their itineraries. Kelly White, Managing Director of Geo Group, which represents the Malawi Travel Marketing Consortium, explains, “Malawi’s broadening appeal in recent years is borne out in statistics, but is not something that has happened overnight. The last ten years have been a challenge, but the outcome is a massive turnaround for Malawi as a destination, with tourism arrivals growing by an average 12% a year over a 10-year period, and the UK is now the number one source market for nonAfrican visitors to Malawi.”

Varied landscapes and rich cultural heritage Malawi’s tourism wonders range from spectacular Lake Malawi to unspoiled landscapes, diverse flora and fauna, and a vibrant culture. Lake Malawi, which covers around

© Ministry of Tourism

Mount Mulanje

20% of the country’s total land area, is lined with pristine golden-sand beaches and is ideal for all kinds of water sports, including kayaking, sailing, snorkelling, scuba-diving and water-skiing. Lake cruises are also very popular. Lake Malawi National Park has been designated a UNESCO World Heritage site for its beauty and wildlife, which includes the many varieties of fish that have given the lake its nickname ‘God’s Aquarium’. Malawi’s landscapes are exceptionally varied, ranging from the Great Rift Valley to mountains reaching over 3,000 m. The country is generally green and lush, with plateaus, forests, mountains, plains, escarpments and dramatic river valleys. The Rift Valley includes some important wetlands that are home to many kinds of animals,

while the Mulanje Massif in southern Malawi features central Africa’s highest mountain (3,000-m Sapitwa) and lush tea estates.

Wildlife reserves attracting more safari tourists Malawi’s Nkhotakota Wildlife Reserve is a protected area of rugged, unspoiled wilderness, and the World Bank has recently invested around €650,000 in the reserve to protect its wildlife, develop sustainable tourism and train staff. Visitors can stay in the new Tongole Wilderness Lodge, which has thatched-roof, open-fronted suites overlooking the Bua River, while Bua River Lodge, opened by a British soil conservationist, is another option in the area.

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© Ministry of Tourism

Dedza-Salima, Thuma and Dzalanyama forest reserves also protect Malawi’s rich natural animal and plant resources. Liwonde National Park offers great game-viewing and has well-established modern accommodations, while Nyika National Park also has modern accommodations and adjoins Vwasa Marsh Wildlife Reserve. Majete Wildlife Reserve, which covers 70,000 hectares, is being developed as one of Malawi’s top choices for game safaris thanks to a €1.7 million, nine-year African Parks Foundation project which has restocked the park with more than 2,500 animals, including lions and leopards. Tourism operator Robin Pope Safaris has opened a new luxury hotel, Mkulumadzi Lodge, to take advantage of Majete’s many attractions. The company also operates Pumulani beach lodge on Lake Malawi and a new property in Liwonde.

An array of wildlife Animals which can be sited in Malawi include the recently re-introduced black rhino (in Liwonde and Majete),

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elephants, lions (particularly in Nkhotakota Wildlife Reserve and Majete), leopards, hyena, jackals, and, in the Shire River, thousands of hippos. Buffalo and zebra can be found all over the country, while bushbuck, grey duiker, kudu, grysbok, klipspringer and reedbuck are found in most protected areas. Roan and eland can also be sited, particularly in Nyika, while Liwonde and Kasungu are the most likely places to spot sable and waterbuck. The rarest species, Livingstone’s suni and the beautiful nyala, can be seen in Lengwe. Other mammals in the country include monkeys and baboons, bush pigs, warthogs and porcupines. Malawi is also a birdwatcher’s paradise, with over 650 recorded species. They include the Livingstone flycatcher, red-winged francolin and the endemic Lillian’s lovebird, as well as water birds such as the hamerkop, fish eagle, kingfisher, egret and pelican. Raptors, like the African marsh harrier, black-breasted snake eagle and peregrine falcon, can also be spotted.

Safaris without crowds Malawi’s wildlife reserves may not have as many large mammals, particularly predators, as reserves in some neighbouring countries, but in Malawi tourists can see wildlife away from the crowds, in magnificent unspoiled wilderness areas. And, even if visitors do not spot a leopard, they have a good chance of locating some of the 400 species of orchids which grow at all altitudes around the country. Safaris in Malawi can also be more affordable as this tourism niche is just beginning to be developed. Along with its fabulous natural wonders, Malawi has a rich culture that includes traditional dance, music, theatre and art. Each of the country’s tribes – such as the Chewa, Yao, Nyanja, Maravi and Tumbuka – has contributed to Malawi’s vibrant cultural mix. Masks are commonly used in dances and ceremonies, and each tribe has its own style of masks. The best-known dance with masked dancers is the Gule Wamkulu, performed by the Nyau of the Chewa tribe.


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Diverse cultural attractions One of Malawi’s top cultural-tourism attractions is Chongoni Rock Art, a UNESCO World Heritage Site and the densest cluster of Stone Age art in Africa. Nearby Dedza is a centre for traditional pottery, and just down the hill from Dedza is Mua Mission, where artisans create fine wood carvings. The mission also has a fascinating cultural museum. The Society of Malawi, in historic Mandala House in Blantyre, has a collection of thousands of books and resources on Malawi’s culture for those who want to study it in depth. A great introduction to contemporary Malawian culture and creativity is the popular Lake of Stars music festival, held in Lilongwe for the tenth year in September 2013.

It features an eclectic programme of live music, film, theatre, exhibitions and speakers from Malawi and beyond.

Exceptional tourism investment opportunities The government of Malawi has singled out the tourism industry as a major growth sector and has implemented new regulations to encourage tourism visits, including the country’s first hotel-ranking system. Malawi has also stepped up its marketing of its tourism attractions and its efforts to attract international investment in tourism projects. The government recently eased visa restrictions and now allows for duty-free imports of qualifying equipment for the tourism sector. Malawi is also actively encouraging more airlines to fly to the country.

In an effort to raise the international profile of Malawi’s tourism industry, Rachel Mazombwe Zulu, Minister of Tourism, Wildlife and Culture, represented her country at the Malawi Trade and Investment Forum held in London in March this year and at the INDABA Tourism Trade Fair held in Durban, South Africa in May. In August, President Joyce Banda briefed the UN World Tourism Organisation on Malawi’s efforts to foster development of the tourism sector. In September, President Banda spoke at a ceremony marking the launch of a project to build the Monkey Bay Rural Growth Centre on Lake Malawi. She commented, “My government has implemented several initiatives to break the vicious cycle of underdevelopment and poverty

Traditional Dance - Northern Malawi

933 © Ministry of Tourism


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Cappuccino’s

The Premier Coffee Shop in Lilongwe Situated in the heart of Crossroads Shopping Mall is the renowned Cappuccino’s Coffee Shop owned by Fiona and Mario Real. © Ministry of Tourism Lake Malawi - Likoma Island

in Malawi. This new centre will help raise the status of Monkey Bay as a world-class tourist attraction. Cape Maclear in Monkey Bay has the country’s best diving spot and will contribute to our efforts to make tourism a driver of the national economy.” An air strip to serve the area is planned.

Top sites for tourism investors The Ministry of Tourism, Wildlife and Culture has singled out Lake Malawi, the Mulanje and Nyika mountain areas, Chisanga Falls, Nkhata Bay-Chintcheche, Nkhotakota Hot Springs, Nkhotakota Rain Forest Game reserve, Deza Rain Forest, Williams Falls, Cape Maclear and other areas as ideal sites for new hotels, lodges and tourism-related services. Specific investment opportunities being promoted include the Likhubula Falls Eco-Tourism Project, which involves building accommodations at Dziwe Lankhalamba Pool on the western slopes of Mulanje Mountain, and a project to build an eco-lodge at Manchewe Falls, 4 km from the historic Livingstonia Mission in northern Malawi. Eco-tourism, cultural visits, spa holidays, game safaris and sports activities all have tremendous development potential in Malawi. Public-private tourism projects are encouraged, like the current Land and Lake Safari project to build, develop and run a tourist lodge in Lilongwe. Beautiful, diverse, unspoiled Malawi welcomes more tourism visitors and investors.

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The couple opened the coffee shop on 3 November 2005 because of their passion for good coffee and great food. Over the years, the menu has expanded to make Cappuccino’s a full-service restaurant. The couple believes in dreaming big and good taste in life and this is proven in the fine decor and a warm ambience which brings a sense of belonging when you dine at Cappuccino’s. The coffee shop is a home away from home or an office away from the office; it’s the perfect meeting place for families, shoppers and business meetings. Cappuccino’s also has an outside catering division which caters for launches, diplomatic, corporate and family events. Cappuccino’s customers can never get enough of the mouth watering dishes and awesome desserts on offer. On its 10th anniversary Cappuccino’s intends to expand from the breakfast and lunch menu to a lavish dinner menu. Why dine anywhere else in Lilongwe? Cappuccino’s is the place to be as it is the most fashionable, remarkably friendly environment and the reputation speaks for itself as it is the longest standing coffee shop in the capital city of Malawi.

Crossroads complex Box 1137 - Lilongwe Tel: +265 99 987 2287 realcappuccinos@yahoo.co.uk


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Crossroads Hotel

Number One Hotel Choice in Lilongwe The Crossroads Hotel, ranked the top hotel in Lilongwe, offers world-class accommodation and state-of-the-art conference facilities in the heart of the city. Ideally located next to the Crossroads Shopping Complex and just 25 minutes from Kamuzu International Airport, the Crossroads Hotel has developed a loyal following among leisure and business travellers. The family-owned property, part of a prominent local business group, opened in 2004 and has been steadily expanded and upgraded to fulfil the needs of its international guests. Defining the Crossroads Hotel’s competitive edge, General Manager Rodney Goneso explains, “We offer luxurious rooms, two restaurants featuring a wide choice of cuisines, a beautiful spa, highly trained staff members who provide truly personalised service, and around 2,000 sq metres of meeting space.” In fact, the Crossroads Hotel is the city’s first choice for business conferences and special events thanks to its extensive meeting areas, which can accommodate up to 800 seated guests. Crossroads Hotel is also the only hotel in Lilongwe which has a true auditorium and the only one with a sauna, Jacuzzi and steam room.

With top-quality service, flexible rates and special packages, Crossroads Hotel aims to continue to be the hotel of choice for international travellers in Malawi. Rodney Goneso points out, “To maintain our number one position in the local market, we decided to focus our attention even more on our customers to give them the best possible service, and our occupancy immediately shot up. We hire international experts to train our staff to be assured that the service they provide meets the highest standards. We also offer flexible pricing and a number of special packages.” The hotel’s owners are currently building another hotel in Blantyre which will feature the same international-standard

facilities and services for which Crossroads is known, and they plan to build a new hotel in Mzuzu as well. Rodney Gonesco explains, “We intend to grow by building new hotels all around the country, so as to maintain our leading position in Malawi’s hotel sector and continue to attract clients.” The Crossroads Hotel anticipates growing visitor numbers as Malawi’s investment and tourism attractions become better known. Rodney Gonesco points out, “Malawi is a virgin territory for investors and there are vast opportunities here. Now is the time to come here and see everything that this country has to offer.”

ROSSROADS HOTEL Crossroads Complex Mchinji Roundabout - Lilongwe Tel: +265 175 0333/0444 centralreservations1@crossroadshotel.net www.crossroadshotel.net

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Protea Hotel Ryalls

World-Class Service in the Heart of Blantyre Protea Hotel Ryalls features true four-star facilities and services in the heart of Blantyre, Malawi’s top business centre. The hotel is owned and operated by two prestigious names in Africa’s hospitality sector: Blantyre Hotels and the Protea Hospitality Group, which has 120 properties in eight African countries. Ideally located just 15 minutes by car from the airport yet within walking distance of Blantyre’s main business and commercial venues, Protea Hotel Ryalls has earned a loyal following for its authentic style, exceptional comfort and warm hospitality.

Landmark property in the heart of the city The landmark property opened in 1921 and has been completely upgraded and renovated over the years; a new section was added in 2002. Today, the hotel’s entrance is an elegant covered walkway through a garden leading to a spacious lobby which features natural light and modern furnishings with an authentic African touch. Protea Hotel Ryalls is regarded as one of the most technologically advanced hotels in Malawi, and a look at the guestrooms, public areas and conference facilities shows that this reputation is well earned. Protea Hotel Ryalls has 117 air-conditioned, elegantly furnished guestrooms, all equipped with air conditioning, en suite bathrooms and showers, satellite TV, wireless Internet access (free data usage of 100MB daily), telephones and mini-bars.

Choice of dining and beverage options Protea Hotel Ryalls continuously improves its services and recently upgraded its outdoor swimming pool. Other amenities include a fully equipped fitness centre, the Ryalls Restaurant for casual meals and snacks, a cocktail lounge known for its “sundowners” and wine list, and the stylish 21 Grill, named for the year the hotel was founded. 21 Grill is a favourite among hotel guests and Blantyre residents alike thanks to its delicious international and local specialities. The nearby Blantyre Sports Club offers Protea Hotel Ryalls guests access to various sporting facilities, including golf,

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tennis, squash and lawn-bowling. Hiking and horsebackriding trails are also within easy reach of the hotel, and many restaurants, nightclubs and other entertainment venues are just steps away. For visitors looking for bright lights and music, Blantyre’s top nightlife venues are all nearby.


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Tourism

Excellent base for leisure travellers For leisure travellers, Protea Hotel Ryalls is the ideal base for a tour of Malawi’s many unique tourism attractions, including Lake Malawi along the country’s eastern border. Set among rolling hills covered with tropical vegetation, offering wonderful vistas across to neighbouring Mozambique, Lake Malawi is an unforgettable stop on a trip to Africa and just one of the sites waiting to be discovered by visitors to Malawi.

Popular on travel sites

World-class conference facilities Protea Hotel Ryalls contains flexible, world-class conference and meeting facilities which can accommodate up to 200 guests. These facilities, equipped with the latest audio-visual technologies, are unique in Malawi and have made the hotel a popular choice for conferences, business meetings and exclusive events of all kinds. The experienced Protea Hotels Ryalls Conference Centre team will take care of all the extras required for conferences, including conference brochures, photocopies, faxing and e-mail services. The hotel’s conference facilities are fully flexible in order to handle all sizes and types of meetings, including banquets. Another plus for conference-goers is the hotel’s location in the centre of the city.

Protea Hotel Ryalls mainly serves international travellers, including executives, diplomatic missions, aid workers and conference-goers. On Trip Advisor and other travel sites, guests at Protea Hotel Ryalls consistently praise the hotel’s clean and comfortable rooms, excellent beds, dependable Internet connections, modern amenities, delicious breakfasts, gourmet cuisine (especially at the 21 Grill), Malawianpress coffee, and top-notch swimming pool, fitness centre and conference facilities. Most of all, visitors praise the hotel’s well trained, hospitable staff members, who make an effort to learn guests’ names and in general provide the kind of personalised service world travellers demand. Guests also appreciate the convenience of using the Protea Hospitality Group’s web site to make hotel reservations. As one satisfied visitor commented, “Travel in Central Africa can be hit or miss but the Protea Hotel Ryalls in Blantyre is right on target. The African hardwood desk in my room was so beautiful I wondered if it would fit in my trunk, and after weak water pressure at other locations, the bath was beyond luxurious.” Another wrote, “For me there is only one hotel in Blantyre, and it is the Protea Hotel Ryalls.” With its four-star services and hospitable welcome, the Protea Hotel Ryalls definitely lives up to its motto, ‘Gateway to the warm heart of Malawi’.

2 Hannover Ave. - Blantyre Tel: +265 182 0195 / 0955 ryalls@proteamalawi.com proteahotels.com/ryalls

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Apex Rent-a-Car

Leading Car-Hire Firm Offers World-Class Service Apex Rent-a-Car, a family-owned business founded in Blantyre in 1984, has steadily grown over the years and is now ranked among the top three car-hire companies in Malawi. Apex Rent-a-Car serves individual customers as well as a number of international organisations operating in the country, including the World Bank, several foreign embassies, non-government organisations and others. Corporate clients currently make up around 70% of Apex Rent-a-Car’s business. Managing Director Nizam Kasmani explains that Apex Rent-a-Car operates its own garage which excels in providing top-quality maintenance and repairs for all vehicles in the Apex fleet. Apex also offers a range of valueadded services, including chauffeurdriven vehicles on request. Apex Rent-a-Car has achieved success even in difficult conditions. Nizam Kasmani says, “Car-hire companies do not receive any government incentives in Malawi, and when we want to expand our fleet, import duties on new cars are significant. Parts are expensive as well. In addition, maintenance costs for vehicles are high given the bad state of some of Malawai’s roads. Neverthe-

less we have grown into a large company with a very strong reputation.” He adds that he would like the government to provide duty-free car imports so that car-hire companies can expand their options for their customers and in turn help to stimulate the growth of Malawi’s high-potential tourism sector.

Focus on quality and reliability Meanwhile Apex Rent-a-Car continues to set itself apart from the many car-hire firms in Malawi.

maintains high quality standards and reliable vehicles. While tourists may look for the cheapest options, our established clients choose us for our reliability and excellent service. They know they can count on us.” Apex Rent-a-Car welcomes the chance to serve more individual and corporate customers in Malawi. Nizam Kasmani concludes, “We give good service, we are reasonable on prices, and we are one of the historic companies in the carhire business here in Malawi.”

Nizam Kasmani explains, “We are committed to being a company that

P.O. Box 1132 Area 4, Lilongwe Tel: +256 175 4610 Mobile: +256 999 95 0707 apexcars@globemw.net www.apexrentacarmw.com

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APEX RENT-A-CAR The top rental car agency in Malawi

Visiting Malawi?

Need to rent a 4x4?

Contact us for luxury 4x4 rental cars in Malawi!

P.O. Box 1132 Area 4 - Lilongwe - Tel: +256 1 75 4610 - Mobile: +256 999 95 0707 - apexcars@globemw.net - www.apexrentacarmw.com


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