Mining & Trade News

The Reserve Bank of Malawi (RBM) says access to credit facilities is one of the key fundamentals required for Malawi to transform to a private sector driven economy.

RBM Governor Dalitso Kabambe said this in Blantyre during the launch of the Credit Awareness Week which runs from December 9 to 15, 2019.

During the week the Central Bank conducts an awareness campaign on the benefits of following effective credit management practices and use of credit history reports from Credit Reference Bureaus.

Kabambe said the awareness campaign will result in increased understanding of credit access and usage by many Malawians for their economic empowerment and development.

He pointed out that for three consecutive years the country’s economy has stabilized with inflation currently at 9.3%, hence it is an opportune time for local citizens to access credit facilities to boost their capital.

“This week is of paramount importance to local citizens as Malawians will gain knowledge on merits of borrowing money from licensed or registered lending institutions including banks, microfinance institutions and savings and credit cooperatives (SACCOs) as opposed to borrowing from informal lending institutions,” he said.

Currently, only 3% of the Malawi population has access to credit from formal lending institutions, as the rest opt for informal institutions including village banks, a fact that Kabambe attributed to financial illiteracy.

In his remarks, Executive Director for Consumers Association of Malawi (CAMA) John Kapito urged financial institutions to uphold better customer care services.

Kapito said, among others, banks should ensure that customers are conversant with consumer rights and obligations when accessing loans.

He said: “During the recent years we have seen informal lending institutions growing drastically as opposed to formal institutions due to fair packages that the facilities offer to borrowers hence the need for commercial banks to borrow a leaf from such institutions”.

“Formal sector must invest much in understating credit terms and conditions among others interest rate, repayment period, short term or long term loan and consequences of default before signing a credit agreement between a lending institution and a borrower.”

Other sponsors for the awareness campaign include Bankers Association of Malawi, Malawi Microfinance Network, and Malawi Union of Savings and Credit Cooperatives.

In order to disseminate the core financial literacy messages within the week, RBM is among other things running financial literacy clinics and conducting credit awareness workshops with some of the major stakeholders.

Facebook has challenged local businesses to embrace social media in their marketing strategies in order to extend their markets. 

The Company is implementing a Community Leadership Circles (CLC) Program to bring together digital marketers and Community leaders to connect and share experiences on updated features it has introduced to fast-track communication processes on the social platform.

CLC Blantyre lead Frank Kamanga said that social media platforms have proven to be an efficient and cost effective means of disseminating business information due to their connectivity power which enables businesses to reach out to the global audience.

He said: “Whether you have an offline business or online, you can promote your business to the largest audience through social media.”

“The whole world is open for you through social media which makes the businesses profitable as marketing through social media is not expensive as other platforms and is very efficient in terms of reaching out to the wider audience.”

Kamanga, however, said there is more to be done in Malawi to ensure full utilization of the social media in this digital era.

He advised the government to come up with sound policies to increase Internet accessibility and lower prices for data usage.

“Social media is important as it creates awareness and innovates the way people live. It is the social media which has helped people discover new and innovative stuffs that can enhance personal lives. From farmers to teachers, students to lawyers, every individual of the society can benefit from the social media and its awareness factor,” he said.

Meanwhile, Facebook has launched a tool that will enable members to transfer photos and videos they have uploaded to the platform to Google Photos.

British Broadcasting Corporation reported that the service will initially roll out in Ireland and then in 2020 across the world, and it is designed to include other services in future as part of the Company’s commitment to “data portability”.

Facebook’s Google Photos tool is part of the Data Transfer Project, which aims to provide an open-source platform anyone will be able to use to move data between online services.

Apple, Google, Microsoft and Twitter are also involved in the collaboration.

The Malawi Government is preparing to develop an automated business registration system at the Registrar of Business Names Offices in Blantyre. 

The assignment will be financed by the World Bank as part of the US$95-million Agricultural Commercialization (AGCOM) project.

The Ministry of Agriculture, Irrigation and Water Development is, meanwhile, inviting sealed bids from eligible bidders for designing, supplying, Installing and commissioning of the Business Registration System (MBRS) within an implementation period of 6 months.

“Bidding will be conducted through international competitive procurement using Request for Bids (RFB) as specified in the World Bank’s procurement regulations of July 2016 revised in November 2017 and is open to all eligible bidders as defined in the procurement regulations,” states the Ministry.

Bidders are required to pay a non-refundable fee of MWK40, 000 or USD$50 payable by cash or direct deposit to purchase bidding document in English to be sent by courier or email.

The deadline for submission of bids is January 17, 2020.

In another development, the Ministry is expected to hold its 12th Joint Sector Review (JSR) workshop at Crossroads Hotel in Lilongwe.

The JSR will be conducted under the theme of ‘Creating a sustainable and resilient Malawi through irrigation, water and sanitation.’

In a statement, Principal Secretary in the Ministry, Grey Nyandule Phiri says the JSR provides a platform and mechanism for harmonization and improved sector policy dialogue and coherence.

Phiri says: “The annual review is aimed at reaching a common view among key stakeholders on important achievements in the sector in the preceding year, key implementation challenges, and progress against strategic policies.”

“Achieving consensus on priorities is a key in informing the future plans and budgets which provides focus for development partner support.”

Phiri further says the JSR has been organized to assess progress towards the achievement of the agreed headline indictor for the irrigation, water and sanitation sector.

He says the review will bring together pertinent issues hindering irrigation, water and sanitation development with the view to making recommendations for institutional and policy reforms to feed into the medium term planning and budgeting exercises.

Annual sector performance report for 2018/19 financial year will form the basis for the assessment and discussions at the event.

Minister of Agriculture, Irrigation and Water Development Kondwani Nankhumwa (MP) is expected to be the guest of honour.  

The Malawi Government is seeking to prequalify contractors for construction of Olympic Sports Village at Kamuzu Institute of Sports in         Lilongwe.

The Ministry of Youth, Sports and Culture says in a statement the facility, which will be used to host 2022 Africa Olympics Sports games, will include a swimming pool complex (50m competitive 25 learners’ pools) and ancillary facilities.

“Identification of interested and potential bidders for the construction of the facility shall follow the prequalification procedure used under the two-stage tendering method as an important phase in the procurement strategy being employed,” says the Ministry.

The Ministry is inviting eligible bidders who are currently registered in the unlimited category for building contractors with the National Construction Industry Council of Malawi and any interested international contractors that are registered in the equivalent category in their respective countries to collect prequalification questionnaire documents from its offices in Lilongwe.

It says prequalification documents should be returned to its internal procurement committee by Thursday, December 5 and interested contractors or their representatives and members of the general public may attend the opening of bids on Tuesday, December 24, 2019.

“It is the responsibility of each interested contractor to ensure that documents are submitted in accordance with ‘The pre-qualification requirements’ in the documents, as non-compliance will lead to disqualification and rejection of the contractor.

Bids shall be valid for 30 days.

Experts have advised the Malawi Government to improve its domestication of its obligations under Regional Trade Agreements (RTAs) to seal gaps between its domestic legislation and its obligations in terms of its RTA commitments.

International Trade Law Consultant George Naphambo said currently Malawi does not have necessary legislation in place required for the imposition of trade remedies such as Anti-dumping duties, Countervailing duties and Safeguard measures in terms of the relevant World Trade Organisation Agreements.

He was speaking during the closing session of validation workshops on studies conducted on Malawi’s Bilateral and Regional Trade Agreements at Ryalls Hotel in Blantyre.

The studies were executed by Zimbabwean Firm Trade and Development Studies Centers, under the European Union (EU) Technical Assistance initiative aimed at supporting Malawi government in Bilateral, Regional and Multilateral Trade Agreements.

Naphambo said the trade pacts require important safety valves for dealing with unfair trade and increasing imports as a result of trade liberalisation which calls for the need for Malawi to draft the required laws and regulations to domesticate its World Trade Organisation (WTO) obligations and RTA commitments in line with trade remedies and establish a competent authority to initiate and investigate applications for the use of trade remedies.

“This will also entail the drafting of the necessary legislation and regulations to domesticate the WTO provisions on trade remedies. Malawi as a Least Developed Country (LDC) should also push for trade remedy provisions in RTAs that are less stringent than the requirements of the WTO trade remedy provisions,” he said

Naphambo also recommended that “Malawi needs to enter into mutual recognition agreements with regard to standards and technical regulations and domesticate such agreements in order to ensure that Malawi exporters have access to markets of other RTA Member States without having to also comply with the standards and technical regulations of other Member States.”

Meanwhile, Malawi is in violation of its obligations under the Southern African Development Community (SADC) Free Trade Area (FTA) due to its failure to liberalise its tariffs on South African imports of sensitive products in accordance with its schedules of commitment under the SADC Trade Protocol.

“As this failure to implement its obligations does not qualify for a derogation under the SADC Trade Protocol and is not covered by the available legal exceptions in the Trade Protocol, Malawi will have to address this issue through consultations with South Africa and other SADC Member States.”-He explained

Naphambo said “as part of such consultations Malawi should explore alternative funding mechanisms for its revenue shortfall from continued liberalisation under RTAs, which is the main reason behind its failure to timely implement its SADC tariff reduction obligations.”

Public Relations Officer for Paramount Holdings Limited Dick Juma recommended to the private players to be more proactive in their operations to position Malawi on positive side as regards to trade agreements at both bilateral, regional and multinational level.

Juma also urged the policy makers to address Non-Tariff Barriers (NTB) that exporters in Malawi are currently encountering which is in violation of the relevant RTAs’ legal provisions on NTBs.

He said “Malawi should focus on implementing and strengthening the mechanisms for reporting and resolving NTBs available under existing RTAs and the Tripartite Free Trade Area (TFTA) and Africa Continental Free Trade Area (AfCFTA) agreements.”

Minister of Natural Resources, Energy and Mining Bintony Kutsaira is set to launch the new National Energy Policy 2018 on Wednesday, November 27 at Bingu International Convention Centre (BICC) in Lilongwe.

Secretary for National Resources, Energy and Mining Patrick Matanda says in a press statement that the new policy, which is a culmination of a wide consultation process that took into account a variety of views from various stakeholders, is a revision of the 2003 national energy policy.

He explains that the new policy emphasizes on the importance of private sector participation in the energy sector and provides an environment conducive for such participation in the energy sector in the form of direct investment, public and private partnership.

Matanda says: “The policy also emphasizes on sustainable and clean energy which is accessible to all.”

“Energy efficiency is another priority area of this policy which also recognizes the importance of security of energy supply systems.”

“Mitigating environmental, social safety and health impacts of energy production and utilization is a key part of the policy.”

Government has reviewed the 2003 policy because in spite of its success, it had a number of shortfalls and challenges which needed to be rectified,

“The 2003 policy was driven by the vision 2020 and the Millennium Development Goals ( MDGs), and the  development agenda has since moved on and the MDGs have given way to Sustainable  Development Goals (SDGs) and  the main development agenda for Malawi now is Malawi  Growth and Development Strategy lll, both of which  have put energy as a high priority area”, he says.

The other factor that necessitated the revision of the 2003 policy is that in 2015 the government of Malawi (GoM) adopted a power marketing policy as well as an oil importation policy and both needed to be factored into the new energy policy.

“The United Nations Sustainable Energy for all initiative of 2011 also emphasizes on issues of access to energy for all agenda which again needed to be reflected in the new policy,” says Matanda.

The Malawi Government has adopted a public sector reform program that is aimed at ensuring efficiency, transparency and accountability in the delivery of public services of which energy is a part.

The goal of the new policy is “Access to affordable, reliable, sustainable, efficient and modern energy for all Malawians by 2030.”

It could be solar or coal. But water as a source of power must not be ignored. At least that is what might take for the African region to achieve energy efficiency, according to experts at a recent African Hydro Symposium which took place in Blantyre, the 29th of its kind in the region.

Scores of delegates from well over 14 countries gathered in the Warm Heart of Africa to share the future of power generation in the region.

The timing and the hosting nation could not be more convenient. Malawi has one of the lowest electrification rates in the region. Statistics indicate that only about 11% of the people in the country with a population of over 17-million are connected to the country’s main grid.

And the effects of the current climatic conditions on the generation of power in the region should not be ignored, according to the experts who took part in the three-day conference.

“In Southern Africa where rainfall patterns have changed, we need to call for innovation from partners on sustainable ways of generating power. We need turbines that use less water,” said William Liabunya, CEO for Electricity Generation Company of Malawi (Egenco).

Liabunya cited Malawi and Zimbabwe which are facing electricity challenges mostly due to decreased water levels in Lakes and rivers as the major victims of the effects of climate change on power generation.

But climate change is only one of the challenges affecting power generation in the region. Lack of adequate investment by private companies is another contributor to inadequate power generation.

Why companies?

EGENCO, the first parastatal to play the role of a power generator in the country has been in operation for just only two years. One of its maiden projects has been to increase the energy capacity of Nkula A. So far, the rehabilitation of the power plant has seen a boast of 10 megawatts. Other projects are in the offing.

During the conference, Secretary for Ministry of Natural Resources, Energy and Mining, Patrick Matanda highlighted EGENCO’s 15-year strategic plan aimed at improving power access in the country.

Matanda said there is need to increase power supply in the country as this will ultimately increase economic opportunities.

“Clinics will open, students will study well in the villages, businesses will be kept open and this will ultimately attract investors,” he said.

Liabunya said private companies need to join the bandwagon through investment in power generation as Independent Power Producers (IPPs) to supply the national grid, and supplement power generated by EGENCO in order for Malawi to overcome the energy deficit.

The conference attracted four European countries including United Kingdom, Croatia, German and Austria.

African countries represented included Namibia, Kenya, Democratic Republic of Congo, Mozambique, Cameroon and Kenya.

“When you look at our young history, it gives us pride to host this symposium,” said Liabunya, “Maybe out of the 14 countries in the region [present] we have the lowest reach and it is our responsibility to make the changes.”

Shayona Cement Corporation says it is committed to increase cement production to ensure that it employs more Malawians and provide more business opportunities to companies operating in Malawi in order to play a major role in Malawi’s economic growth.

Shayona MD Jitendara Patel said this at Tata Zambia Malawi Branch offices in Lilongwe when his Company received 24 Tata Trucks which it has procured for distribution of cement across the country.

“Shayona is a Malawian company. I, the founder, was born in Mulanje, and my vision is to see the Company growing to make Malawi self-reliant on cement production since importation of cement is a drain on the country’s foreign exchange,” he said.

Patel hailed the long time relationship between his Company and Tata, which he said, will continue to bear more fruits.

He said Shayona expects to procure more trucks from Tata as it continues with its expansion drive, which will see the company building infrastructure for a logistics department at Kanengo Industrial area in Lilongwe.

Head of Aftersales and Administration at Tata Zambia – Malawi Branch Karthik Rajagopolan thanked Shayona for maintaining the business relationship with his Company saying the advantage of buying from Tata, unlike other overseas dealers, is that its local presence makes it easier for a customer to access back up services.