Mining & Trade News

The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) says its random survey has unveiled that many local consumers consider imported goods as being of higher quality, a tendency which is hindering the “Buy Malawi Strategy” from meeting its goal.

MCCCI’s Head of Membership Development and Communications Tione Kafumbu said the Malawi Government needs to scale up sensitization campaigns on the strategy to support growth of local industry.

Kafumbu said: “The awareness campaign should focus on convincing local consumers on the importance of buying locally produced products. Additionally, government has to be exemplary in its procurement processes through giving local preference to locals, and the general public will adopt the same trend.”

But the Ministry of Trade has differed with MCCCI in a separate interview saying Malawians have responded positively to the strategy such that local producers are easily finding a market for their products.

Spokesperson in the Ministry Mayeso Msokera said the exercise has also encouraged local producers to start producing goods of high quality to substitute foreign products.

He also said the strategy has assisted local manufactures to find markets for their products in other countries across Africa, Europe and Asia.

Msokera said the strategy is benefiting locals at producer, consumer and government levels.

He said: “Our producers are able to earn a living since they are able to sell their products, and consumers are now being supplied with goods of high quality hence government is able to collect more revenue in form of taxes.”

“The Ministry assesses each and every product to ensure that it meets our standards.”

The Ministry of Trade has since called on companies and industries to register with the Buy Malawi Strategy for them to start making progress in their operations.

Small and Medium Enterprises Development Institute (SMEDI) has welcomed government’s move to ratify the African Continental Free Trade Area (AFCFTA) saying it has major benefits for Malawian Small and Medium Enterprises (SMEs).

Minister of Trade Sosten Gwengwe announced recently that government is in the process of ratifying AFCFTA which is aimed at boosting trade among African countries.

SMEDI Spokesperson Alinafe Mpoka said SMEs welcome the Trade Area considering vast benefits that will come along with it in terms of easing import and export business between African countries.

“There are major benefits expected to emerge from the CFTA, including boosting trade and welfare gains and fostering a vibrant and resilient African (including Malawian) economic space. These, in turn, will serve as a springboard for more beneficial integration by Africa into the global economy,” Mpoka said.

He explained that  SMEDI’s positive reaction to government’s process of ratifying the Trade Area is based on its mandates which include;establishing a single continental market for goods and services with free movement of business professionals and investments, accelerating the establishment of the Continental Customs Union and the African Customs Union,enhancing competitiveness at the industry and enterprise level by exploiting opportunities for scale production, continental market access and better reallocation of resources.

He said AFCFTA offers many opportunities for developing and promoting SMEs and economic growth in Malawi and Africa as a whole.

Mpoka said: “SMEDI is optimistic that Malawian Small and Medium Enterprises (SMEs) and others from the African continent, will largely benefit from AfCFTA because it will entail lower or no tariffs and free access to market and market information which is vital for startups and established SMEs.”

“We have all the hope that the instrument will indeed lead to removal of tariff restrictions and other barriers on intra-African trade which has been a barrier to many SMEs in Import and Export Business.”

He said with the Trade Area functional, it will also be easier for local SMEs to establish businesses in different African countries.

Mpoka cited Intra-African Trade in agriculture which, he said, is expected to increase, resulting in increase in wages and employment.

The arrangement will also allow businesses to access cheaper raw materials and intermediate goods, and will also improve the conditions of regional value chains and access to global value chains.

Mpoka explained: “SMEDI believes that the AfCFTA agreement will give Malawian SMEs an advantage to grow beyond domestic market into regional one. Other African markets would be much easier for them to enter as opposed to the difficulties they encounter trying to enter the global market.”

“This is of a huge importance bearing in mind that SMEs account for 80 percent of businesses in Malawi and Africa. AfCFTA will also allow SMEs to supply larger regional companies, a feat that is almost impossible without AfCFTA.”

He said Malawi’s AfCFTA ratification and implementation strategy should not only focus on promoting high and sustainable long-term growth but also ensure that the benefits of such growth are widely shared in order to reduce poverty and improve the standard of living for all in Malawi.

If well implemented, the AfCFTA will provide the opportunity for African economies to create the world’s largest free trade area, with the potential to unite 1.3 billion people, in a $2.5 trillion economic bloc and usher in a new era of development.

Meanwhile, SMEDI has also welcomed government’s move to operationalise the Control of Good Act (COGA) saying it will help to control illicit trade.

“This will enable Malawi as a country to find ways to enhance and improve local production, identify high value products and value chains that can be manufactured or grown successfully locally, look at various options, ideas and strategies on how to increase local Product Manufacturing and local Agriculture Production in Malawi so that we become self-sufficient and reduce dependency on Imported Products,” Mpoka said.

A local economic expert says operationalization of the Control of Goods Act (COGA) by the Ministry of Trade will enhance local industrial productivity and ensure transparency on trade system.

Ministry of Trade has enacted COGA, a law to regulate Malawi’s importation and exportation of goods through imposition of restrictions, banning or allowing of exports or imports under licences.

According to the Press statement from the Ministry,” the law came into operation on July 10, 2020 following Publication of the Act in Government gazette on July 16,2020.”

“The new Act serves as a departure from old Act in that it brings in predictability, certainty and transparency which will facilitate Investment into doff sectors of the economy without interruptions,” reads part of the statement.

Speaking in an interview, Former Executive Director for Economic Association of Malawi(ECAMA), Edward Chilima hails the Ministry for effecting the law saying it is amongst trade interventions that were supposed to be imposed long time ago.

He says: ” This is a welcome development as it is to bring sanity on imports and exports, having noted that many tend to import goods of which basically we are not supposed to be importing, since these can be locally produced and distributed.”

“This will ensure that we import and export goods in line with national development and economic goals, as some goods are also not supposed to be exported to other countries for strategic reasons.”

Chilima, therefore, urges the Ministry to intensify monitoring measures to press on stakeholders involved in trade including Banks, Malawi Revenue Authority and Immigration department to adhere to the Act.

Meanwhile Malawi’s exports to the East African market are expected to be enhanced during and beyond the Covid-19 pandemic period, following Britain’s offer to support the Trade Mark East Africa (TMEA) project with $50 million.

TMEA was established as a non-profit making institution for aid for trade delivery in East Africa.

Among others, the project is to foster reduction of costs and time of trade and ensuring that Malawian products are competitive on international markets.

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.”

A study by economic researchers has recommended to the Malawi Government to tread carefully when offering tax exemptions in line with regional trade pacts in order to check the bludgeoning trade deficit.

The Economic Researchers have also advised the government to address smuggling of foreign products into the country to address revenue losses and scale up Malawi’s benefits from trade liberalization in order to grow the economy.

The researchers from a Zimbabwean firm, Trade and Development Studies Centers, made these recommendations at Ryalls Hotel in Blantyre as part of the results of the study on the impacts of Malawi’s Bilateral and Regional Trade Agreements which was financed by the European Union (EU) under a Technical Assistance initiative aimed at supporting Malawi to benefit from Bilateral, Regional and Multilateral Trade Agreements.

A report on one out of five studies carried out by the firm titled “Impact assessment of full trade liberalisation for South Africa, Africa continental free trade area and the COMESA/EAC/SADC/Tripartite free trade area on revenue, industry and Malawi’s economy,” indicated that between 2009 and 2018, the country’s total trade revenue increased by 11% from US$3,209 million to US$3,587 million.

However, the report further stated that “total exports fell by 26% to US$ 880 million in 2018 while imports increased by 34% to US$ 2, 707 million over same period. “

“The trade deficit more than doubled from US$835 million in 2009 to US$1,827 million in 2018 thus putting pressure on Balance of Payment (BOP) position,” reads the report.

Director of Trade and Development Studies Centers Dr. Moses Tekere said there is need for Malawi to place high revenue sensitive products under the exclusion list of African Continental Free Trade Agreement (AfCFTA) which includes South Africa if Malawi is to register optimum results out of full trade liberalisation.

“The South Africa effect is critical in Malawi’s regional trade arrangements including the AfCFTA. Malawi should therefore harmonize its exclusion list under AfCFTA with the list of products currently attracting positive tariffs from South Africa to remain in the exclusion list,” he said.

He said there is also a need for legal and institutional capacity building of institutions implementing trade remedies to deal with instances of unfair competition from imports that threaten local industry.

Tekere also recommended that Malawi scales up support to Small and Medium Enterprises (SMEs) and business institutions on export market readiness.

Principal Secretary in the Ministry of Industry, Trade and Tourism Dr. Ken Ndala commented that Malawi’s trade policy aims at creating an open economy with relatively low tariffs and free from non-tariff barriers therefore participation in the trade agreements reflect Malawi’s commitment in promoting more open and liberal trade as a key component of its development agenda.

Ndala said:  ” Malawi’s market ultimately relies on accessing other countries’ markets and attracting investments from other countries. Therefore, as a country, we strongly support initiatives towards trade and investment development and promotion as a vehicle to create incomes, jobs and prosperity.”

However, Ndala said the ministry has noted that there is low capacity and uptake for private sector to market access opportunities arising from trade agreements and great reluctance to support trade liberalization and regional trade negotiations for fear of losing domestic markets.

He said: “The way forward is for firms to embrace the reality and we hold hands in focusing and repositioning towards expanding to other markets. This is more the reason we undertake trade negotiations to facilitate exports while also safeguarding our nascent and strategic industries.”

“We continue to implore upon the private sector to be supportive of these negotiation processes.”

Malawi is among the five countries that are yet to initialize interim Economic Partnership Agreements (EPA) negotiations in the Eastern and Southern Africa (ESA) region and is also one of the countries that have signed but not ratified the Tripartite Free Trade Area and the Africa Continental Free Trade Area.

The Ministry of Industry, Trade and Tourism has lauded achievements in the implementation ofthe first National Export Strategy (NES I) which ran from2013 to 2018.

Principal Secretary in the Ministry Ken Ndala said during a consultative workshop in Lilongwe to brainstorm on the design of the National Export Strategy IIthat achievements of the initial phase include development of the Trade, Industrial and Small and Medium Enterprises Policies; and Control of Goods Act.

The achievements also include operationalization of the Buy Malawi Strategy; development of the National Trade Facilitation Action Plan; Construction of Standardization, Quality Assurance, Accreditation and Metrology (SQAM) infrastructure at Malawi Bureau of Standards; setting up of One Stop Border Posts; and establishment of One Stop Service Centre at Malawi Investment and Trade Centre.

Ndala said fruits of the NES I also include Simplified Trade Regimes, establishment of Online Business Registration System, establishment of the Collateral Registry, Development of the Financial Literacy Strategy, Development of the Warehouse Receipt Bill, The Credit Reference Bureau Act,and The Personal Property Securities Act.

“The NES I also yielded the Establishment of Online Investment; Development of Labor Market Information System (LMIS); Development of the National Labor and Employment Policy; Establishment of Malawi Trade Portal; and Linking smallholder irrigation schemes to seed companies,” he said.

Ndala also said the strategy resulted in the introduction of an online Oil Seed Extension Coordination Platform and Decentralization of the issuance of crop buying licenses to Agricultural Development Divisions (ADDs) across the country.

He saidthese outstanding results were achieved through Technical Working Groupswhich were set under the Trade, Industry, and PrivateSector Development Sector Wide Approachasthe implementation platform of the NES I.

Ndala said such benefits from the NES I are an inspiration to launch the NES IIadding that the first phase has provided legal frameworks for the implementation of NES II.

He said it is imperative to undertake NES II tofinalize the key investments that were supposed to be undertaken in the sector under NES I as well as deal with emerging issues that will be identified in this successor strategy.

Despite the notable achievements, the NES I still did not fully address the policies that the Ministry set in the plan.

Ndala said the under performance of the NES I was due to the deficient resource mobilization with heavy dependence on development partners and donor agencies and also low level of investment in productive sectors in terms of local investment in manufacturing projects with high value addition.

“The NES was overdesigned and too ambitious to be realized within a five-year period, given the prevailing conditions; It reflected more of an Industrial Policy rather than an Export Policy as very limited actions for effective export promotion, facilitation, export development, aftercare, and policy advocacy were planned,” he said.

Ndalaalso said week and ineffective collaborative framework between Ministries and Agencies affected competitiveness of local products and services on the international markets following the higher costs of doing business in Malawi as compared to other competing countries. 

Commenting on the challenges faced, Director of Planning in the Ministry Francis Zhuwaosaid the obstacles arose due to unpredictable financing leading to no drastic growth in exports as expected that necessitated the review and development of the successor strategy.

“With support from the Commonwealth Secretariat, we have therefore gone into the development of a successor strategy. It is my sincere hope that we will give this process the same support that we gave during the design of the NES I,” Zhuwao said.

He expressedgratitude to the Commonwealth and all development Partners in the Trade, Industry and Private Sector Development sector for technical and financial support.

In her remarks, Commonwealth Trade Adviser Yinka Bandele said the body saw it right to fulfil their duty of supporting developing countries on economic issues.

Bandele said: “The Commonwealth is very committed to supporting member countries’ efforts to achieve the Sustainable Development Goals, including through trade. We look forward to working with the Government of Malawi on a new strategy that will overcome key hurdles to growth and help transform the economy.”

She further urged the government to draw lessons from the previous NES in strategizing the new plan.

Bandele also said Malawi needs to work on economic diversification to do away with over-dependence on agricultural produce.

Malawi, whose main export commodities include tobacco and tea,is facing a significant trade deficit as it is importing about twice the value of goods it exports.

The Ministry is, therefore, working on finding solutions to issues affecting trade competitiveness, and identifying priority sectors for export development and lead markets for increased trade.

The Ministry is designing NES II and Action Plan for 2020-2025, a process which will be finalized later this year.

The Roads Authority says preparations are underway to resume construction works for Lirangwe-Chingale-Machinga road which stalled in March 2021 when the contract with Portuguese contractor Mota – Engil was terminated.

Public Relations Officer for Roads Authority Portia Kajanga told Mining & Trade Review that RA repackaged the remaining works for the project as “Upgrading of Lirangwe – Chipini Road to bitumen standards” which was put to tender in July this year.

“The works will involve earthworks, culvert installation, construction of lined side drains, bridges, road over rail-bridge and bitumen surfacing,” Kajanga said

Kajanga said the benefits of road project will include prevention of exposure to dust which is associated with lung infections, ease of transportation to public amenities all weather, creation of jobs for communities, creation and improvement of small scale businesses, and infrastructure improvement in the area.

Kajanga did not reveal the reasons for the termination of the contract with Mota- Engil but media reports indicated that there were hiccups for the contractor to complete the project in time.

Prior to 2014, the road had a gravel surface in poor condition and the then President Joyce Banda laid a foundation stone for the work to commence.

However, work progressed very slowly. Banda’s successor Arthur Peter Mutharika also laid a stone marking the commencement of work in 2018.

As of February 2018, only 11 percent of the work had been completed, though the initial completion date was September 2019.

The 62 km road will connect the M1 at Lirangwe in Blantyre District and the M3, a few kilometres from Machinga District Council.

The other roads in pipeline in Malawi include the upgrading the Nsanje-Marka Road which isapproximately 25.9 km earth/gravel road to bitumen standards. The road is part of a regional route connecting Malawi with the Port of Beira in Mozambique and beyond.

The Malawi Roads Authority also intends to rehabilitate/reconstruct and widen the Kaphatenga– Dwangwa Road in Nkhotakota District in the central Region of Malawi. The work will also involve replacing single lane and temporary bridges with permanent two lane bridges for the section spanning from Nkhotakota to Bua Bridge. The road will be widened to a new cross-section.

The Malawi Government will also embark on a project to construct the Mzimba – Eswazini –Mzarangwe road.This is a section on the main road designated M022.The road is approximately 45km and will be constructed to bitumen standard. This is one of the key roads in the Northern Region of Malawi as a trade route.

There is also the construction of Chiringa-Muloza Road project which is an important trade route.The road begins at Chiringa, then continues southwards along the eastern foot of the Mulanje Massif closely following the existing T415 road alignment, crossing several rivers and streams and finally joining the M2 road. 

The other project in pipeline is the upgrading of Rumphi-Nyika-Chitipa road. Traversing a length of 272 km, the project will upgrade two roads designated as Main roads (M24 road from Rumphi District – Nyika and M09 from Nyika- Chitipa. Currently the road is of earth standard and will be upgraded to bitumen Class 1.

Geologists belong to a technical expertise that deal with rocks. This technical expertise is branched into many aspects, among others, environment, geotechnical engineering/engineering geology, seismology, volcanology, exploration geology, geoinformatics, geo-statistics, structural geology, petroleum geology just to mention but a few. All these aspects of geology may be applied in the construction/ building industry using geology as the fundamental basis for such tasks. Infrastructures like road construction, bridges, foundations to buildings, railways, tunnels, housing settlements, dams, mine construction require the services and input of a geologist.

• Environmental geology is in one way also associated with Geohazard mapping among others to help in decision making and planning of housing units and settlements.
•  Engineering geology involves application of geotechnics/ geotechnical aspects by identifying geological factors that could affect construction projects.
• Seismologists are concerned with earthquake and seismic studies as in assisting in planning for settlements. They also make decisions based on attenuations of seismicity of an area where they may deduce the return period hence careful planning. Similarly they also work in areas where seismicity is the order like inducing them in oil exploration/petroleum to locate the position of wells, during design and construction of dams,
•  In road, tunnel, railway construction, engineering geologists are very important in analyzing the geotechnical aspects. For example in a tunnel construction a geologist is engaged to determine the type of rock where the railway might pass that will provide a good roof in avoidance of collapsing in and such knowledge may be accompanied by blasting technology to ascertain the blasting pattern that does not cause damage to the existing rocks and gives minimal negative or no impact at all

In mineral exploration geologists are required to do geological mapping, reconnaissance surveys, geophysical surveys, drilling, geological logging, sampling, resource estimation, geotechnical evaluations, geostatistics and in mine geology they are important in ore delineation by controlling the grade, sample analysis, geological mapping as in face mapping, stockpile analysis, ore blending, mine to mill reconciliation etc.

               1. Aspects of geology in Infrastructure Development/Construction

In construction Industry engineering geologist form the basis of foundation in determining say the type of rock to source quarry stone which may be used for building houses or roads. They may aid in planning for the choice of a site for construction of buildings to determine structures like faults. This type of geology analyses the geological and geomorphological techniques and knowledge at the pretext of aiding and facilitating infrastructure planning, geological mapping etc. The foundation of houses or buildings may be on top of these structures and may be underlain by underground drainage or an active spring. Engineering geologists here analyse ground materials to assess the risk factors and offer advice to the best procedures for the development and sustainability of such. They undertake field investigations by collecting and analyzing data where decisions can be made from. The importance of a geologist in infrastructure developments go beyond hydrogeology, petrology and geochemistry, rock mechanics, geohazard analysis  just to mention only but a few..

                2. Importance of Geology in Civil Engineering

Geology plays significant and crucial role in civil engineering discipline since it studies the structure of the earth.

• Geology tries to identify areas that are prone to structural failures arising from geological hazards like landslides, mudflows, debris flows, earthquakes etc.
• Knowledge of hydrogeology helps to understand groundwater where this is connected to water supply etc. A geologists assesses groundwater conditions that can affect the stability of a structure like dam construction. In this case, hydrogeological maps provide distribution of groundwater and the associated depth through groundwater modelling, mapping etc.
• Geological survey is also important because it tries to reduce the risk of incurring a huge cost to the project. In this regard a geologist may be required to make risk assessments of future construction sites.
• Foundation problems of buildings, bridges, roads, dams, excavations occur in direct relationships with the areas in which they are built
• The knowledge about the properties and nature of rocks and rock mass is very important to determine slope and cut stability of say road and tunnel construction.
• Geological maps help in planning by civil engineers. It provides information about structural depositions, faults, folds, joints, bedding planes that have to be carefully analyzed to increase the slope/structure stability.
• If civil engineers know the rock properties they can consider a specific rock type for a particular purpose or use such as aggregate, foundations, building stones, roofing materials since they are able to know the structure of the earth through geology.

      3. Challenges faced by geologists in Malawi

1. Geologist scope is not recognized and appreciated.
2. Lack of knowledge and exposure to work that requires the services of a geologist and constructions where contractors do not feel the need for engagement
3. Lack of understanding of technical language, digital data and interpretations of geology by the people.
4. Limited job market locally.
5. Working in various harsh environments.

The Malawi Government is seeking an investor to construct and manage a multi-storey market in the Capital City Lilongwe under a Public Private Partnership arrangement.

Malawi’s Public Private Partnership Commission (PPPC) says in a statement that the preferred investor will be selected in accordance with Quality and Cost Based Selection method (QCBS) procedures and in terms of the Full Technical Proposal (FTP) and Financial Proposal format as described in the request for proposals in accordance with the PPP policy and PPP Act as well as the Procurement Policy, Procedures and Guidelines of the PPPC which can be found on its website: www.pppc.mw.

It says interested eligible investors may obtain further information and inspect the Request for Proposal Documents at its offices.

A complete set of Request for Proposal documents in English language may be purchased by interested eligible Investors upon the submission of a written application and payment of a non-refundable fee of MWK10-thousand

The deadline for submission of proposals is November 9, 2022.

Lilongwe is the largest city in Malawi and is divided into four sectors namely; Old Town, Capital Hill, Kanengo and Lumbadzi.

The design clusters residential, employment and service areas around each centre, in order to optimise travel distances and avoid congestion. The city is further divided into 68 areas.

The Council has four markets in the Central Business District (CBD) namely Central, Tsoka, Lizulu and Area 3 Markets.

The city has experienced rapid urbanisation such that the two main markets are overcrowded with traders.

The congestion of traders in the market has led some of the traders plying their business in the streets hence a need for a new infrastructure to accommodate more traders.

The Lilongwe City Council ranks the planned construction of the market dubbed the Wenela Multi-Storey Market and planned construction of an International Bus Terminal in the city as its flagship projects.