Mining & Trade News

The Foundation for Irrigation and Sustainable Development (FISD) is scouting for investment partners to construct a mega shopping mall in Malawi’s capital city, Lilongwe.

FISD CEO Frank Mwenechanya told Mining & Trade Review that construction of the mall in Area 43 along M1 road will cost K14 billion.  

Mwenechanya said FISD is ready to partner both both local and foreign investors to execute the project which will commence in June this year.

He said: “We are much ready for the project as the land is already owned by FISD. We have 50% of the budgeted money and we are just looking for other investors to contribute the other half.”

“Apart from the 50% capital contribution, we have also about 30 to 35% in terms of warehouses, heavy construction vehicles, skilled staff, land surveillance equipment and many more.”

Mwenechanya explained that with the equipment readily available, the project will still start if the process to identify investment partners is not finalized by the commencement date.

He said management of the project will be very easy for FISD as the mall will be constructed a few meters from its headquarters in Kanengo.

Mwenechanya also said some foreign investors have already expressed their interest to pump in shares but the Company is only taking ample time to examine conditions before penning the partnership agreement. 

Speaking at a cocktail that FISD organized for potential investors to market the project, CEO for Lilongwe City Council (LCC) John Chome hailed FISD for the project saying it is rare for a local firm to initiate such “a mega project which is expected to be a game changer for the capital city.”

“The city welcomes the development as it recognizes that any city requires investment to improve living standards of people. On top of that, we are proud that the project is being implemented by young entrepreneurs who are purely Malawians,” he said.

The area 43 mall is expected to have three supermarkets, a variety of retail shops, restaurants, two cinema halls, banks, gym, play area, office rooms, underground and outdoor car parking areas, complimentary spaces and lavatories for each floor.

With a mission of providing highest quality, professional and innovative irrigation, water and clean energy solutions, FISD specializes in design and implementation of innovative irrigation, water supply engineering works, clean energy and financing.

Besides being an irrigation and water supply contractor, FISD is specialized in installation of solar pumping irrigation systems; ground water exploration and drilling; solar off grid power; and self consumption and backup on-grid systems solutions.

The government has appealed to employers to comply with the revised minimum wage of K35, 000.16 per month which come into effect from January 1 this year

Secretary for Labour, Skills and Innovations, Esmie Kainja says in a statement that ‘’noncompliance is a violation of the law and attracts penalties.”

Government effected the new minimum wage after consultation with organisations representing employers and employees.

In the 2019/2020 National Budget, Minister of Finance, Economic Planning and Development, Joseph Mwanamveka said the adjustment of the minimum wage will help protect lowly paid employees and improve their way of living.

Meanwhile, Malawi Congress of Trade Union [MCTU] has expressed shock over the K35, 000 minimum wage saying it is on the lower side considering the current high cost of living.

MCTU Secretary General, Dennis Kalekeni, said considering the cost of living, MCTU proposed to the Ministry that the minimum wage be placed at K40,000 to K45, 000.

Kalekeni said: “The new minimum wage is too much on the lower side such that lowly paid employees are failing to meet basic needs.”

“Unless government raises the minimum wage, a lot of workers particularly those in the lower blanket are going to have economic challenges in the year 2020.”

MCTU also said it is considering putting a proposal to government to introduce different minimum wages for specific industries.

 “During our last consultation meeting, we agreed that it is necessary for domestic workers to have their own minimum wage, and similarly with workers in construction, tourism, agriculture and other industries,” he said.

The Malawi Government says the county’s underexploited leather industry has the potential to contribute up to 4% to Malawi’s Gross Domestic Product if fully exploited.    

Minister of Industry, Trade and Tourism Salim Bagus said this during the Africa Leather and Leather Products Institutes (ALLPI) annual regional consultative forum that took place at Bingu International Convention Center (BICC) in Lilongwe.

Bagus said that Malawi’s leather industry has overwhelming potential as demand for footwear alone is estimated at 16 million pairs against current production of around 0.3 million pairs per annum as of 2018.

“The demand is projected to reach 18 million pairs per annum in tandem with population growth this year, which clearly shows that there is potential and viability of investing in a tannery in Malawi which can feed the Leather Design Studio with finished leather as well as supplying the deficit countries in the region,” he said.

Bagus said with support from ALLPI, Malawi managed to develop the Leather Value Strategy in 2015 to transform leather value chain from the production and export of raw hides and skins and processed products to the production and export of value added products including finished leather, footwear and leather garments.

He said: “As part of implementation of this Strategy, my Ministry has been supporting the sector by among other things, initiating the setting up of the Small and Medium Enterprises (SMEs) Association and; training of SMEs and Cooperatives in Vegetable Tanning and Footwear Making.”

“We have been also in the forefront sponsoring the SMEs to participate in various international Leather Trade Fairs where they could exhibit their products and explore many skills through networking with foreign leather SMEs,” he said.

Bagus said his ministry established the Satellite Leather Design Studio in Blantyre to promote investment in the sector through setting up of a tannery to complete the existing leather value chain gap.

This year’s regional indaba was celebrated under the theme of ‘Developing Africa’s Leather Value Chain through research, business linkages and technology Transfer,’ and the Minister said it is a well-chosen theme whose adoption will help to free-up some SMEs who are pinned by challenges in the industry.

Efforts to promote Malawi’s SMEs in the Leather Value Chain have mostly been undermined by challenges such as lack of modern technology and low levels of research and development (R&D) in support of the sector.

In his remarks, Director of Administration and Finance in the Ministry Joseph Mkandawire described the sector as one of the priority areas for the Government due to its potential to change the welfare of the SMEs and the outlook of the national economy.

Mkandawire said the sector has the potential to immensely contribute to job creation, poverty reduction and the overall economic growth of the country.

He said: “The sector analysis shows that the value chain has the potential of grossing up to US$102 million dollars (MK45 billion), if all hides and skins produced in Malawi are utilized and processed into finished goods locally.”

“It is also estimated that the industry can potentially generate 3,500 jobs in the manufacturing of footwear and a couple of thousand jobs in accessories, manufacturing and footwear distribution and marketing.”

The Malawi Communications Regulatory Authority(MACRA) says there is need for thorough understanding by consumers on usage of mobile data in the fast paced digital era.

MACRA Deputy Director Thokozani Chimbe made this observation during a panel discussion the institution organised to address consumer concerns on mobile data user experience in the country.

Chimbe said:  “We have been receiving complaints from members of the general public over poor service quality of mobile data from the country’s mobile network providers.”

“In most scenarios, we established that there is information gap between consumers and service providers on how to efficiently utilize some of the mobile handsets among others tools and settings applied to minimize external applications from consuming data.”

She said MACRA will liaise with its technical and economic units to come up with necessary regulatory interventions to address the issue.

Digital Experience Manager at AIRTEL Michael Mang’anda said in its efforts to ensure Internet affordability by many Malawians, the company has recently slashed pay-as-go data pricing by 50% from K30 per megabyte to K15 per megabyte.

Internet remains unaffordable for a majority of Malawians, and studies reveal that even though there has been an improvement on Internet access, from 9.6% in 2016 to 13.1% in 2018, the Internet speed is slow as compared to the global average.

In 2015, the International Telecommunications Union (ITU) findings indicated that on average Malawians use more than $12 (about K8 760) a month on mobile phones, the primary means of accessing the Internet. The report indicated that [at the time] the $12 was more than half of what an ordinary Malawian earned in a month with the minimum wage standing at K15 000.

The latest Malawi Economic Monitor by the World Bank has faulted high taxation as one of the major factors behind exorbitant internet charges in the country.

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.  

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.

The Consumers Association of Malawi (CAMA) has pleaded with the Business community to refrain from hiking prices of essential commodities and services in response to the recent fuel price hike.

Malawi Energy Regulatory Authority (MERA) announced new fuel prices last week, and petrol is now selling at K930 per litre from K868, representing a 7.14% increase while the price of diesel has increased with 5.72% as a litre now costs K924 from K874, while MERA maintained the price of Paraffin at K710 per litre.

MERA stated that it resolved to adjust the prices upon assessing recent trends in the world petroleum products prices and changes in other macroeconomic fundamentals in the local market and their impact on energy prices.

Among other factors MERA said “the average prices of Petrol, Diesel and Paraffin increased by 16.12%, 11.55% and 6.05%, respectively, when compared to the averages obtained in the month of December 2018 used in determining the ruling pump prices, and the last In Bond Landed Cost (IBLC) review in January 2019, when pump prices were last revised.

It also said the Malawi Kwacha slightly depreciated by 0.30% to K742.01/USD from K739.78/USD.”

“The Board also considered liquidity of Price Stabilisation Fund (PSF). Since the last price revision in January 2019, MERA has been using the PSF to cushion importation losses as Free On Board (FOB) prices remained higher than the prices used in December 2018 due to geo-political factors and Organisation of Petroleum Countries (OPEC) member countries’ decision to reduce production in support of oil prices,” said MERA in the statement.

Commenting on the development, CAMA Executive Director John Kapito, says it is unfortunate that government has little control over the incident as MERA has made the decision to allow importers recover importation costs directly as the PSF can no longer contain the difference between demand and actual landed cost of petroleum products.

However, Kapito argued that the business community including bus operators should not use the price hike as a token to skyrocket prices of essential commodities and services as a lot of Malawians are in financial problems.

“At the moment we cannot deny what the market requires to be done, but our appeal as consumer body is for business operators to restrain from raising prices as the current amendment is very mean hence has very little impact on prices of social amenities.” Kapito says.

MERA maintained the retail price for Liquefied Petroleum Gas (LPG) at MK1,744.75 despite the landed cost of LPG increasing by 8.42% as it resolved to apply the Price Stabilization Fund to cushion anticipated importation losses.