Mining & Trade News

Malawi’s Minister of Trade and Industry Sosten Gwengwe has expressed concern over the proliferation of substandard products that are being smuggled into the country.

The Minister expressed the concern when he visited Malawi Bureau of Standards (MBS) head office in Blantyre.

“Something has to be done to deal with dumping of substandard products in Malawi. Smuggling is dragging us behind in terms of having quality products in the country,” said Gwengwe.

The Minister said his coming to MBS was to have a high level engagement with Board Members and Management on how MBS can play a leading role in face-lifting the economy through robust boarder and internal quality monitoring controls.

He said his Ministry is prepared to support MBS and other relevant institutions and agencies in the National Quality Infrastructure (NQI) in combating smuggling and proliferation of counterfeit products on the market as they pose a serious setback to economic growth of the country.

In his remarks, MBS Director General Dr.Bernard Thole said MBS is implementing some programs and projects to ensure standardization and quality assurance services and enforce Metrology Act in the country to ensure consumer protection.

“MBS has a mandate to promote metrology, standardization and quality assurance of commodities and of the manufacture, production, processing or treatment thereof; and further to provide for matters incidental to, or connected with standardization,” Thole said.

The Malawi Government has urged exporters in the country to have their products certified by the state of the art laboratory being operated by Malawi Bureau of Standard (MBS) to ensure that the local products are consumable as well as compete on the international market.

Minister of Trade and Industry Simplex Chithyola made the remarks at the Malawi Exporters Awards conference in Lilongwe which was organized by Malawi Investment and Trade Centre (MITC) under the theme ‘Rewarding Excellence, Unlocking Global Exports.’

Chithyola said the laboratory has the potential of driving local products away from the embarrassment of being sent back when exported to outside market due to being substandard.

He said: “It is a major concern when Malawian products are declared not good for consumption when exported.”

“But now we have state of the art laboratory which is being managed by MBS which makes sure that we improve in terms of standard and quality.”

“As Ministry, we would like to urge those exporting products that they should certify with MBS to avoid embarrassment.”

The Malawi Exporters Awards aims at influencing local producers to be exporting local products in order to attract foreign exchange into the country.

Responding on the exposure of the local products to possible foreign buyers, Chithyola disclosed that the Ministry is committed to support the local Small and Medium Enterprises (SMEs) in finding international markets.

Chithyola said: “We are now operationalizing the National Export Strategy II which creates conducive environment for exports.”

“At the same we are also coming up with policies and legal and regulatory frameworks which favours those doing businesses.”

“To ensure access to information, we have set up a market intelligence strategy where by people are able to get markets through the Ministry or by just visiting our website.”

In his presentation, MITC Chief Executive Officer Paul Kwengwere said his institution organized the awards to address a number of business constraints being faced in the sector.

Kwengwere said the programme will help in raising awareness of export potential of services and goods that SMEs produces in the country.

He said: “We have organized this event to share export opportunities with the business community and also build export readiness through counselling and motivational sessions.”

“At the same time we are trying to increase awareness of government policies and strategies to grow Malawi’s export base.”

In his remarks, Executive Director for Ecobank Limited Weluzani Chingota said the bank will continue providing support towards alleviating some of the challenges that SMEs are facing in the sector.

Chingota acknowledged that SMEs in the country are facing challenges including: lack of financial support, lack of markets, lack of reliable water and power supply and; higher dependency on rain fed products.

He said Ecobank has introduced continental single market trade hub to help countries endure the African Continental Free Trade Agreement (ACFTA).

He said: “The African continent’s single market, established through the African Continental Free Trade Agreement (AfCFTA), has created exciting opportunities to foster intra-African trade and investment.”

“At Ecobank, we have launched the Ecobank Single Market Trade Hub to help SMEs grow their business under the AfCFTA.”

In 2021, the Malawi Government launched National Export Strategy II (NES II) which will run from 2021 to 2026 with the target of increasing exports of ‘Made in Malawi’ products and services by 22% in the next five years through export promotion, export development, export facilitation and organization efficiency and effectiveness.

The focus is on high value strategic products in the four export sectors, namely agriculture, manufacturing, services, and mining.

The new strategy has prioritized specific markets for the region and internationally with a focus on capitalizing CFTA and emerging markets in which Malawi has potential to export competitively.

The newly launched Malawi Exporters Awards 2023 by the Ministry of Trade and Industry, in conjunction with the Malawi Investment and Trade Centre (MITC) is set to increase local exports by encouraging local companies to be exporting competitive products. 

Former Minister of Trade and Industry Mark Katsonga Phiri launched the Malawi Exporters Awards on January 12, 2023 in Lilongwe.

This year, the Malawi Exporters Awards 2023, has been scheduled to take place from March 29th to 30th, 2023, at the Bingu International Convention Centre in Lilongwe.

Commenting in a press statement, CEO for MITC Paul Kwengwere says the awards have been organized as a platform to sensitize the locals on the importance of increasing exports of Malawian made products, encouraging a culture of creating exports, as well as awarding best exporters in the country.

He said the winner’s selection process will comprise a detailed, well-planned criteria and the awards will include Best Non-traditional Exporter award, Best Female Exporter Award, Best Youth Exporter Award, Best Services Exporter Award as well as Best Financial Institution Award.

Kwengwere said: “Extending across industries and including both rural and urban presentation, the awards will serve as a celebration of the contribution exports have made to Malawi’s Gross Domestic Product (GDP) and forex earnings.”

“The event will comprise export awareness exhibitions which will provide a platform for B2B meetings and one on one B2G with Trade Support Institutions and Gala Dinner which will culminate to Exporter Awards Ceremony on the closing day.”

“MITC is therefore, calling upon local exporters and financial institutions, who are interested to be considered for the categories, including the Malawi Exporters of the Year Award, to visit our event website to fill out an application form and submit their information.”

MITC has just found a potential export market for rice in Gambia which was revealed during a virtual business meeting held between Malawian private sector and buyers from Gambia.

Speaking during the meeting, Finance and Economic Affairs Specialist and owner of Niro Company Ltd in Gambia, Sulayman Cham said they are ready to start importing rice from Malawi.

“Gambia requires 96,000 metric tons of rice per year based on its relatively low population. So we are ready to start importing from Malawi and we are mostly interested in buying 100% broken rice of any variety from Malawi because that is what is on demand,” Said Cham.

Commenting on the development, Kwengwere encouraged local exporters to explore this market opportunity in Gambia.

He said: “This is a great opportunity for those that are into rice production. As a trade facilitation agency we are more than ready to facilitate those that might be interested in exploring this opportunity in Gambia.”

“We are also told that apart from rice, Gambia is also interested in importing other commodities like Irish potatoes and onions from Malawi.”

“So we are still engaging the Ministry of Trade in Gambia on how best we can explore such export opportunities.”

Malawi’s trade engagement with Gambia is in line with the spirit of the African Continental Free Trade Area (AfCTA) which encourages economic integration to promote trade and investment in the region.

The Malawi Investment and Trade Centre (MITC) says it is optimistic that the upcoming 17th CII Exim Bank conclave on India-Africa growth partnership exhibition scheduled to take place from July 19 to 20 July, 2022 in New Delhi, India, will benefit private sector companies in Malawi.

MITC says in a press statement that the 17th CII Exim Bank Conclave meeting aims at exchanging knowledge and expertise in business regarding export, trade, and investment.

Public Relations Manager for MITC Deliby Chimbalu has described the meeting as an important platform that can benefit private sector companies in Malawi.

Chimbalu has invited all private sector players to take part in the conclave as one way of selling their products and services to the outside world.

She said: “The Conclave on India and Africa is a great opportunity for our private sector companies to meet and forge business partnerships with other businesses in India and even those that will be attending from other countries.”

“You know over the years, the Conclave has increased the level of economic engagement between India and Africa and we envisage that this year’s event will create new opportunities for setting new partnerships between India and Africa hence our call to Malawi private sector to be part of this event.”

As a national investment and trade promotion and facilitation agency, MITC identifies, develops and packages investment opportunities in Malawi; provides a professional service to all clientele; brands and markets Malawi as an investment destination; retains and expands trade and export activities and links opportunities to the developmental needs of the Malawi community.

This year’s meeting is focusing on agriculture and food processing, power and energy, infrastructure development, and financial partnerships and will feature an exhibition of products and services from India and African companies.

The CII- EXIM Bank Conclave on India-Africa Project Partnership was launched in the year 2005 with the support of the Ministry of External Affairs and the Ministry of Commerce & Industry of the Government of India.

Over the last sixteen editions, the Conclave has played a pivotal role in encouraging Indian companies to establish and grow their footprints in Africa.

The level of economic engagement between India and Africa has grown multi-dimensional and to reflect the changing contours of this dynamic relationship, the Conclave is being rechristened as “CII EXIM Bank Conclave on India Africa Growth Partnership” expanding the earlier focus on “Project Partnership”.

The upcoming edition will focus on project exports, trade, investments, exchange of knowledge and expertise creating shared value for business and industry at large between India and Africa

Being the continental economic partnership, the conclave has not only set the ground for many new cross-border partnerships to take roots, but also conducted a critical evaluation of the existing collaborative arrangements on the basis of which a new roadmap for future Africa partnerships would be designed.

Salima Sugar Company says it is fast-tracking preparations to resume sugar production from Saturday, May 7, 2022 due to current shortages of the commodity on the Malawi market.

The Company has been in off-season from March this year in order to plan, strategise, and review as well as carry out a maintenance programme on its plant, and was expected to commence production on May 14, 2022.

But theCompany Secretary Dr. Charles Thupi acknowledged to have received reports from their distributors of low stocks of sugar in many depots across Malawi which has prompted the company to fast-track preparations to resume production.

Thupi said; “As of now we have received reports of low volumes of our sugar in most of our distributors’ depots, and as a measure to address this inadequacy we have resolved to fast-track our preparations to resume production so initially we intended to commence production in two weeks’ time, but with the current development, we will start this weekend.”

In terms of distribution chain, Thupi highlighted that their sugar is mainly distributed by retail chain stores such as SANA, Chipiku and Kulima Gold since they are not mandated to facilitate their own distribution process under fair trade policy.

“As a Company we do not have a distribution license because we cannot be manufactures and retailers at the same time, hence we rely on these distributors to ensure that our product is widely accessed across the country. But having seen the gap we will open up to more distributors so that our product is evenly distributed.” he said

He also hinted that the company is looking into prospects of increasing its production capacity in order to meet the increased demand of the product against the current capacity.

Thupi said; “The current challenge we have is a high demand of the product and looking at our machinery, production capacity is still on the lower side, therefore we are liaising with our colleagues in government to expand our plant.”

Meanwhile, Salima Sugar Company crushes about 250 thousand metric tonnes of cane yearly which produces a range of 25 thousand to 30 thousand metric tonnes of sugar.

The company has 4,000 hectares of land and currently, 1,000 hectares of land is under cultivation. The farm and factory are located in the shores of Lake Malawi and flood and pivot irrigation is used for sugarcane crop.

The Malawi Government through its investment and trade promotion and facilitation agency, Malawi Investment and Trade Centre (MITC) will on February 12, 2022 host an investment and trade forum at the ongoing World Expo in Dubai.

The forum aims at showcasing trade and investment opportunities and the attractiveness of the Malawi’s business climate to the United Arab Emirates (UAE) business community and other potential investors from other countries patronising the international trade fair in Dubai, MITC Director, Cindy Kibombwe, says in a press statement.

Kibombwe says the forum is part of the Government’s economic recovery plans to mitigate against the negative effects of the global novel coronavirus pandemic on the local economy.  

She explains that the forum will bring together policymakers, private business and financial sector players and other relevant stakeholders to discuss Malawi’s business and legal environment and ways of channelling investments into key sectors like agriculture, energy,infrastructure, ICT, agro-processing, tourism andmanufacturing among others.

“This Forum will provide a platform for us as a country to interact and collaborate with potential investors that share our vision in improving investment flows into Malawi as well as positioning our export products in international markets,” she points out.

The director challenges investors to come and explore the opportunities that the Malawi possesses.

The discussions at the forum is will largely focus on Malawi’s business environment; key investment and trade opportunities; exploring funding and financial potentials for potential projects; and networking opportunities.

About 30 Malawian firms expressed interest to participate at the expo which started in October, 2021 and expected to end in March, 2022.

MITC identifies develops and packages investment opportunities in Malawi as well as markets the country as a viable investment destination.

MITC is also a One-Stop Service Centre for business trade and investment start-ups in the country.

The Malawi Government says it is entering into trade relations with a number of countries in the world’s key trade blocks in order to expand the country’s export market base.

Responding to questions by the Parliamentary Committee on Trade on the status of Malawi’s trade activities, Christina Chitima, the Principal Secretary for the Trade Ministry told the committee that the country has signed various Memorandums of Understanding (MOUs) with South Africa, Sudan, India and China to export locally produced farm items.

Chitima said the arrangement will ensure that extra local farm produce that cannot be consumed is earmarked for the export market to boost the country’s economy. The secretary gave an example of pigeon peas, which she said has attracted a trade deal that will ship about 50 thousand metric tons of the peas to India.

She said: “Our expectation is that once these arrangements are concluded, farmers will have the opportunity to grow into cooperatives that will work with relevant institutions such as the Agricultural Development and Marketing Cooperation (ADMARC).

“Other local companies, like seed companies, have already started taking advantage of these overseas markets,” Chitima said explaining that the country is strategizing on how best to penetrate into various international export markets.

 “In dealing with the supply side constraints, we have put in place an inter-ministerial committee and a task force to facilitate smooth export trade and proper diversification of our economy.

“The Competition and Fair Trade Commission (CFTC) helps the government in dealing with some local trade problems such as unrealistic high price charges like in the case of cooking oil, sugar and others.”

Chairperson for Parliamentary Committee on Trade, Simplex Banda, advised the Ministry to consider involving local Small and Medium Enterprises (SMEs) when signing the MOUs.”

“Apart from promoting local participation when signing the MOUs, we have also discussed the need to have a strong legal framework that facilitates creation of conducive environments for investors in this country,” he said, adding that there is need to build symbiotic relationships between the Trade Ministry and other Ministries like industry for fast industrialization, as well as the Ministry of Agriculture.”

Banda also said there is a need for the Ministry to establish a strong relationship with the Department of Immigration as well as the Malawi Police Service in order to curb problems to do with smuggling of products that the country produces. Meanwhile, the Ministry of Trade has established the Malawi Small and Medium Enterprises (MSMEs) Order, which aims at assisting local businesses in finding markets, financial support and eradicate constraints in business and trade

The Ministry of Finance has described an increase in imports of items for the novel coronavirus (Covid-19) management as well as strategic commodities under the Affordable Inputs Program (AIP) as the main catalysts for worsening of the country’s trade balance.

In the 2020-21 Mid-Year Budget Review in Parliament last Friday, Minister of Finance Felix Mlusu said the country has registered heavy imports of the products following the rise of covid-19 cases and increase in demand for AIP products as Malawi clocked the agricultural growing season, a situation which has widened trade deficit.

“Madam Speaker, the country’s trade balance continues to worsen.”

“As at end December 2020, trade deficit widened to US$566.7 million from US$352.8 million recorded during the same period in 2019,” Mlusu said.

Mlusu also said at the end December 2020, Gross Official Reserves stood at US$574.3 million, representing 2.8 months of imports, down from US$846.6 million, 4.1 months of imports recorded in December 2019.

He said the situation has forced the Malawi Kwacha exchange rate against major trading currencies during the year 2020 to face some depreciation pressure.

Mlusu said from June 2020 to December 2020, the Malawi Kwacha depreciated by about 5% against the United States dollar.

He also said the Malawi economy in the year 2020 grew marginally by 0.9%, a downward revision from the estimated growth rate of 1.9% detailed during the 2020/21 budget formulation.

Mlusu said: “This economy, Madam Speaker, continues to suffer from the adverse effects of the coronavirus pandemic which compelled Government to impose containment measures, including partial lockdown and restrictions on mobility.”

“Internationally, Malawi’s economic activities have been hampered by border closures in neighboring countries as well as containment measures in major trading partners such as South Africa, Europe and China.”

The Minister also cited that the Finance Ministry has forecasted preliminary Gross Domestic Product (GDP) growth rate for the year 2021 at 3.5%.

Mlusu said the estimate follows normal to above normal rains that the country has received so far, although localized dry spells are being experienced in some districts mostly in the southern and eastern regions of Malawi.

According to Mlusu, growth in 2021 will also be significantly bolstered by the expected increase in agriculture output due to the impact of AIP.

He said: “Madam Speaker, enhanced growth prospects in 2021 are also buttressed by the on-going Government infrastructure development projects in the road, energy and agriculture sectors, most of which are growth enablers.”

“Furthermore, Madam Speaker, just as in many other countries, the Covid-19 vaccine is also expected to spur business and economic confidence.”

“It is however, important to remember that economic growth in 2021 and beyond is dependent on how fast the second wave of the pandemic dissipates.”

Meanwhile, State President Lazarus Chakwera has assured local Small and Medium Enterprises (SMEs) that his government will operationalize a new Public Procurement and Disposal of Assets  Act that will prioritize local SMEs in awarding of government contracts.

Chakwera said his administration is enforcing the new Act to confine the procurement of several goods and services to local SMEs.

He said: “This effectively brings to an end the procurement policy of past administrations that allowed the concentration of public contracts in the hands of large and foreign businesses for the supply of goods and services that can ably be supplied by local SMEs.”

“Additionally, these policies will inject the much-needed liquidity into the economy by putting money in the pockets of Malawians, enabling them to care for their families, which will in turn stimulate economic activity.”

“To prepare for potential liquidity shortages during the coming weeks of the state of national disaster, my administration has activated the Emergency Liquidity Assistance (ELA) framework to support banks in the event of worsening liquidity conditions.”

Chakwera also said under his leadership, the Government has extended the Reserve Bank’s moratorium arrangement on loan facilities for another six months to June 2021.

He said the moratorium has been designed to give businesses that are operating on funds borrowed from banks some breathing space to stop bleeding from the blows of the pandemic.

The mid-year budget review revised the earlier budget projection from MK2.19 trillion to MK2.33 trillion.

Small and Medium Enterprise Development Institute (SMEDI) has advised young entrepreneurs to venture into business partnerships as one way of dealing with challenges facing their businesses.

Speaking during 265 Pitch event in Lilongwe, CEO for SMEDI Rodrick Chattaika said young entrepreneurs in the country are facing challenges including lack of financial support and technical skills, which can be addressed through partnerships.

Chattaika said: “We want to encourage the entrepreneurs to rely on partnerships because one might have feasible ideas and another one resources. If these two merge, they can improve their image amongst themselves and therefore excel in their businesses.”

He said on its part, from the year 2018 to 2020 SMEDI has been working in partnerships with other stakeholders including National Bank, NBS Bank, Malawi Enterprise Development Fund, Synergy and other development banks.

Chattaika said through the partnerships, SMEDI is able to access services that entrepreneurs are lacking as well as giving the banks an opportunity of meeting upcoming business gurus.

SMEDI supported 265 Pitch event as one of its programs that gives courage to young entrepreneurs to showcase their ideas, and gain support from financial institutions.

Chattaika said the event also helps instill entrepreneurship spirit in people who get motivated by fellow entrepreneurs.

“As you know many youths in the country, even if they have the potential to innovate, are the ones who are highly affected in terms unemployment. So if we can harness their skills we can create more entrepreneurs in the country who will substantially contribute to country’s economy,” he said.

In her remarks, Deputy Minister of Labour Vera Kantukule concurred with SMEDI on the issue saying for someone to succeed in business, a partner is required.

Kantukule said: “We have people who are good at marketing while others at production. They have to come together to create a successful business entity.”

“If you look at western culture, a lot of enterprises are working as partnerships and are exceling on the market.”

She, however, said she is impressed with the growing number of young entrepreneurs in the country saying the development will help to reduce the unemployment rate which is growing at an alarming rate.

In the October 2020 265 Pitch, Mtengo Wakumunda company specialized in production of porridge flour emerged as the winner, seconded by Adamant Furniture with Adas Season Farms coming on the third position.

SMEDI is a parastatal under the Ministry of Trade, and was established in 2013 with three departments of business information and training; planning and research; and finance and administration.