Mining & Trade News

The Malawi Confederation of Chambers of Commerce and Industries (MCCCI) has advised government to review some of the existing taxes in the forthcoming 2022/2023 national budget in order to stimulate private sector growth.

The recommendations were issued by MCCCI president, James Chimwaza, during a pre-budget consultation meeting called by the Ministry of Finance

MCCCI proposes the removal of some general and specific domestic tax measures such as excise tax, value added tax (VAT) and withholding tax.

He said government should also consider providing incentives that will promote usage of alternative sources of energy amidst the current power deficit due to lack of sustainable sources of energy.

Chimwaza further suggested the review of excise duty on alcoholic beverages to curb beer smugglings saying the current system is counterproductive. He also recommended the abolition on withholding tax on farm produces to bring consistency and fairness on the market.

“When ADMARC is purchasing produce from local farmers they do not deduct withholding tax while when private businesses do so they pay. This puts private business at a disadvantage,” he said

The MCCCI president further proposed the downward review of the 20 percent withholding tax on gross sales to 10 percent for small and medium enterprises (SMEs). He also observed that the export allowance calculated at 25 percent of profits from exports was not attractive enough for exporters

“To make export allowances attractive for exporters, we propose a review of the current provision which is based on taxable profits according to Taxation Act to change to export proceeds,” he noted

In his comment, Minister of Finance Felix Mlusu acknowledged the issues raised saying that government will rectify some of the concerns.

Mlusu reminded participants that his ministry recently launched the Domestic Revenue Mobilisation Strategy, as a tool to ensure transparency around the administration of tax and non-tax policies.

The minister stressed government’s desire to continue fostering inclusiveness of the private sector in national development through the creation of a conducive business environment.

He pointed out that for the country to address its foreign exchange challenges, government has launched the Second National Export Strategy which encourages the private sector to industrialise as well as to generate foreign exchange earnings through exports.

Malawi offers a wide range of tax incentives with the aim of encouraging development, enhancing output, earning and saving foreign exchange and expanding employment opportunities.

These tax incentives are aimed at enabling businesses to grow and expand their operations thereby contributing to the overall social-economic development of the country.

Environmental enthusiasts are planning to unleash the recreational potential of the Mudi river and its catchment area.

Inspired to restore the ecosystems across Blantyre city, environmentalists under the Mudi River Clean-up 2021 project have launched the 2021/22 tree planting season with combined zeal to plant ten thousand trees along the Mudi riverline.

Manota Mphande of Art Malawi (ARTMAL) and his partner Chris Walker of PaNthunzi Eco Solutions say they are committed to realise their joint vision to give Mudi river and its catchment area an environmental face lift that will offer city residents and visitors recreation activities.

The Mudi river and its tributaries are the source of water for the Mudi dam, which supplies treated water for domestic and industrial use in the city. Its catchment area covers approximately 890 hectares (8.9 sq kilometres) land from the spillway of the dam to the now-degraded Ndirande Mountain Forest Reserve, all the way to Makhetha, Maoni Park, up to the Blantyre/Zomba road.

However, poor cultivation practices along the river buffer zone and high deforestation rates have contributed to soil erosion leading to land and water quality degradation.

Studies further indicate that the sharp increase in urbanization combined with the high levels of erosion relate to the deterioration of the water quality along the Mudi River.

Sewage from blocked sewer lines, solid waste dumped along the banks, agricultural activities and domestic water uses such as washing and bathing along the river all contribute to the degradation of both the environment and water quality.

Chris Walker told Mining and Trade Review that the project identified the tree planting drive as a key component in revitalizing the Mudi river catchment area’s lost glory and restoring the ‘green’ beauty of the city of Blantyre as a business and tourist entry point into the country.

The Mudi catchment area was once famed for recreational activities such as camping, picnicking, fishing, boating, canoeing, sailing and swimming.

“Tree planting exercise will help restore the vegetative cover, ensure clean air and fresh and unpolluted water,” he said explaining that the project will embark on a mindset change campaign to orient people on better ways to interact with the environment such as in the management of solid and liquid waste, which mostly end in burning the vegetative cover or polluting the river.

He emphasized how critical the Mudi River ecosystem is to the preservation of the health and energy of the city’s residents as much as it is in preserving the beauty and freshness of tourist attraction spots such as Majete Wildlife Reserve and Elephant Marsh, whose lifeline are in part conserved by the Shire River, where Mudi river flows into.

According to Walker, river-borne waste from Blantyre City also contributes to oceanic pollution since the Shire River empties into the great Zambezi River which drains into the Indian ocean.

“it is, therefore, important to treat Mudi River against solid waste and liquid pollution as Blantyre is a key entry point for international and domestic business tourism,” he said

The Mudi River Clean-up project receives financial support from GIZ under the More Income and Employment in Rural Areas (MIERA), and has managed to provide temporary employment to over 120 personnel ranging from river cleaners, supervisors, wood carvers, stone sculptors, metal artists and many more.

So far, 35 tonnes of solid waste have been removed from a stretch of approximately 2.5km on the confluence with Nansolo River along the riverline from the Clock Tower Roundabout through Blantyre Market and Blantyre Sports Club.

Councilor for Blantyre City Central Ward, Chidika Nyumba, commended the project for the positive strides in keeping Blantyre clean and green.

He said the initiative compliments efforts by the City Council, which will be planting about 50,000 trees in this year’s tree planting season.

Business Computer Services (BCS) Managing Director, James Chimwaza, co-sponsor of the tree planting initiative called for collaborative efforts in shaping outlook of city to attract more trade and investment into the commercial city.

Malawi’s Roads Authority (RA) is seeking bids from eligible bidders for the supply and installation of ICT equipment at Mchinji /Mwami one stop border post.

RA explains in a Press Statement that the assignment, which will be financed by the African Development Bank (AfDB) as part of the Multinational Nacala Road Corridor Development Project, will be completed within four months.

It says bidding will be conducted through open competitive bidding procedures as specified in the Bank’s procurement framework and is open to all eligible bidders.

RA will hold a site visit and pre-bid meeting at the Mchinji/Mwimi border post on the Malawi side at 10 :00 am on December 17, 2021.

Interested eligible bidders may purchase bidding documents for a non-refundable fee of 20,000 Malawi Kwacha or its equivalent in a freely convertible currency. The mode of payment is cash or bank certified cheque.

The interested eligible bidders can obtain further information from the procurement section, Roads Authority headquarters, Functional Building, Lilongwe and inspect the bidding documents during office hours starting from November 29, 2021.

The deadline for delivering bids is January 24, 2022.

The works shall comprise supply and installation of ICT equipment in three different lots as follows

LOT 1: LAN and phone system, CCTV facilities, Access control system, Voice Evacuation system and Background music control

LOTS 2:  Fire Detection system

LOTS 3: ICT Equipment

Bidders are free to bid for one or any number of the above mentioned lots.

CONTACT:

+265 1753699

EMAIL

ipc@ra.org/mmalinda@ra.org.mw

The IPDC Chairperson, Road Authority, Functional Building, Off Paul Kagame Road

Private Bag B346, Lilongwe 3, Malawi

High cost of electricity by the Electricity Supply Corporation of Malawi (ESCOM) has forced government-owned water supply company, the Blantyre Water Board (BWB), to consider constructing a solar plant to power its water pumps, engines and decontamination equipment.

BWB made the revelation on Monday during the launch of its 2020 – 2025 strategic plan.

BWB board chairperson George Nnesa said the project, to be funded by the Reserve bank of Malawi (RBM), will help the parastatal save on electricity bills and invest the savings in improving services and ensuring institutional growth.

The water utility body incurs a MK1.2 billion monthly average bill, which is usually off-set from an average monthly earning of MK1.3 billion.

“We plan to reduce electricity bills, which eat almost 80 percent of our income,” said Mnesa as he assured that solar power will make the company more efficient in operations.

“Looking at the growing water demand across the country, we intend to expand our income base by reducing expenditures including on electricity which will be complimented by a solar plant to generate power from Nkula falls,” he said.

The Board chair then called on government to bailout the institution from an accumulated outstanding balance of about K24 billion owed to ESCOM over the past two years.

Nnesa also disclosed that BWB will, within the lifespan of the 5-year strategic plan, expand its water storage facilities such as the one in Nguludi in order to meet the accelerated demand of clean water.

In her remarks, Minister of Forestry and Natural Resources, Nancy Tembo, called on stakeholders to commit themselves and collaborate with the Board in implementing the strategy.

“The board has a sound plan and strategy of how it wishes to serve its customers better in the next years,” she said. “But there is need for it to take a serious step in ensuring it is implemented. This requires that all stakeholders should revitalize their commitment to see the strategy being actualized,” Tembo said

She added: “Among other things government expects to see BWB curb 54 percent of non-revenue water which is lost due to illegal connections and poor infrastructure.”

Tembo assured the parastatal of government’s commitment to supporting it in settling its financial problems through the Ministry of Finance, which she said will facilitate the bailout.

With an average of 3,000 hours of sunshine per year, Malawi has high solar radiance potential to compliment the country’s available green energy portfolio, such as hydro-power, in improving the lives of its people and stimulating economic activities.

With this potential in mind, PowerPlus Control Systems, a local company providing solar energy solutions, says it is set to transform the lives of people, especially those not connected to the national power grid.

Less than 10 percent of Malawi’s population of 18 million people is connected to the electrical grid, which makes the country’s power sector the most constrained in the sub-Saharan region.

Jonathan Mlauzi, the founder and director at PowerPlus Control Systems says despite making inroads in providing solar energy answers to the country, whose economy is agro-based, many people are still not aware how much solar can transform their lives.

He explains that currently his company is running the “Go4Solar, Go-Green, Save Bills” which encourages farmers to start solar irrigation and fish farming systems for high productivity and cheaper means of meeting the Malawi Vision 2063.

Mlauzi adds that the campaign also targets people and institutions connected to the national power grid such as hotels, schools, hospitals, banks among others to install solar power backups instead of diesel powered generators, which pollute the environment.

“It is possible to integrate solar and grid (Escom) power in a house and then choose which to prioritize,” says Mlauzi.

PowerPlus Control Systems is now engaged in scaling up the Nkhotakota Solar Energy project, a model for future private Investment into the solar sector. Under this project, the company will be supplying cheaper solar powered equipment across the country.

So far, PowerPlus Control Systems has installed solar submersible pump system to promote irrigation at Kalota Sugarcane Farm in Salima and Mtakatataka Police Training School in Dedza. It has also supplied domestic and commercial solar power systems as well as backup systems across the nation including installing 3× 60KW power backup UPSs in the Malawi Electoral Commission (MEC) data centres.

“We are also expecting to install solar Irrigation systems for cannabis farms,” says Mlauzi.

Meanwhile, the company says the COVID-19 pandemic has brought logistical challenges as it affected the importations of goods.

“It now takes several months to order our goods from abroad than was the case before the pandemic,” he says adding that the devaluation of Kwacha is another challenge.

However, Mlauzi is quick to point out that despite the challenges, PowerPlus Control Systems plans to introduce swappable electric batteries and scooters.

“People in the country have started owning hybrid bikes and cars but most do not know that these also use lithium batteries, which we will soon start supplying to help customers save on fuel consumption,” says Mlauzi, who is also an engineer.

He urges Malawians to embrace solar energy as it is now the “fuel to drive the economy of the country” when other sources of energy have proved unreliable and brought down industrial productivity. 

PowerPlus Control Systems designs, supplies and install In/Off Grid solar systems, power backup systems, solar pumps, irrigation systems, Uninterrupted Power Supply (UPS) and data centre power.

As Malawi joins the rest of the world in commemorating the World Competition Day, the Competition and Fair Trading Commission (CFTC) says a policy addressing concentration and abuse of market power is an indispensable tool..

Addressing a gathering when celebrating the day, CFTC acting executive director Apoche Itimu, said the advent of COVID-19 has seen a sharp rise in the misuse of market power by large business enterprises that frustrate smaller ones from participating and competing fairly in the country’s trade activities.

Itimu noted that as the socio-economic impact of the pandemic continues to erode the gains posted as a result of globalization, existing economic inequalities within and between countries are also increasing the gap between the rich and the poor.

“It has been observed that big enterprises have become bigger while small ones have suffered the most and in some cases have even collapsed,” she said and suggested the need to address abuse of buyer’s power under the fair competition law and policy regarding aspects of labour, farmer welfare and supply chain contracts.

She also expressed dismay over unfair trading practices that impede the achievement of an inclusive digital economy. “The boom in e-commerce is essential for economic recovery and inclusivity,” she said also observing the need to protect the digital space

Itimu further warned traders not to engage on any anticompetitive trade practices, especially during festive season when many traders take advantage of unsuspecting consumers to sell or buy goods at manipulated prices

The celebrations were held under the theme “Competition Policy for an inclusive and Resilient Economy”,

Commemoration of the Competition is a tradition that dates back to December 5, 1980 when the United Nations adopted the international standard for competition laws attributed as “the Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices” popularly known as the United Nations Set of Principles and Rules on Competition.

With about 40 percent of Malawi’s export potential laying in neighbouring countries in the Southern Africa Development Community (SADC), Malawi has the potential to ignite a trade-led growth by manufacturing and adding value to products along various agricultural and mineral resource value chains.

To achieve this, the Buy Malawi Strategy (BMS), an initiative that encourages local business competition through the production and sale of local products, can take advantage and capitalize on existing trade networks across the continent.

According to the strategy, the agriculture value chain is the main component that is targeted for exploitation because of its significance to the country’s economy as a major driving force behind employment and exports. Other significant growth sectors with competitive advantage include mining, forestry, ICT, retail and wholesale, transport and warehousing.

The strategy, which dovetails into the African Continental Free Trade Area (AfCFTA) concept of creating a market of a combined GDP of US$3 trillion for African raw materials and finished goods to serve more than 1.2 billion people, has the potential to boost Malawi’s industralisation drive and consequently, the country’s economy.

Statistics indicate that for years, Malawi’s import bill has been growing while the trade deficient widened and foreign reserves declined due to the importation of various items such as fuel, drugs and raw materials for manufacturing.

Local experts believe that both the BMS and the AfCFTA facilities have the capacity to accelerate employment, empower and create wealth in Malawi through increased productivity and trade.

“If successfully implemented, the strategy will translate into job creation, increase in household incomes, higher national revenues and GDP growth and increased government spending on public services,” says Amos Tizora, Executive Director at the Circle for Integrated Community Development (CICOD). “The BMS and the AfCFTA) will contribute to reduction of poverty and transformation of people’s lives across Africa,” he adds.

Recently, President Lazarous Chakwera, who is also SADC chairperson, told the second Intra-African Trade Fair in Durban of the importance of advancing sustainable ways of manufacturing goods designed to have a positive impact on ordinary people’s lives.

Concurring, South Africa’s president, Cyril Ramaphosa said Africa should not provide employment and add value to other economies when its people are in poverty and conditions of under-development.

President Chakwera urged nations to create policies that would support Africa’s economic integration and strengthen industrialisation to make Africa the factory of the world.

The Intra-African Trade Fair is a key pillar of the AfCFTA. It gathered Africa’s political leaders who faced buyers and sellers from across the world to share trade, investment and market information as well as plans to support intra-African trade.

According to the Economic Commission for Africa, the AfCFTA agreement, signed by 54 of the AU’s 55 member states with Eritrea yet to join, has potential to increase intra-African trade by over 50 percent, while the World Bank projects that AfCFTA could add US$76 billion to the rest of the world in yearly income.

It is expected that the AfCFTA will boost intra-African export figures through the creation of a continental customs union; elimination of tariffs on 90 percent of intra-Africa goods; easing movement of capital and people between countries; facilitating external investment; and reducing non-tariff barriers.

Two of Malawi’s government ministries, Trade and Industry, architects of the BMS hope that the initiative “will substantially enhance competitiveness of local firms through stimulation of local production and growth.”

Malawi’s Greenbelt Authority is seeking bids from eligible contractors for the construction of irrigation scheme water intake works at Mwangolera, Nthola-Ilola irrigation scheme in Karonga District.

The Authority says in a statement that bidding will be conducted in accordance with the open tendering  procedures contained in Malawi’s Public Procurement and Disposal of Public Assets Act of 2017 and Public Procurement Regulations of 2020 and is open to all eligible bidders.

It says interested bidders may obtain further information from the procurement and disposal unit of the Greenbelt Authority in Lilongwe.

Interested bidders are requested to attend a mandatory site visit and pre-bid meeting at Nthola –ilola irrigation scheme on Tuesday December 9, 2021 at 10.00am. The point of meeting is at Karonga District irrigation office.

Bids must be submitted in sealed envelopes and clearly marked with the procurement reference number.

The deadline for submission of bids is December 17, 2021.

The Malawi Government established the Greenbelt Authority to champion large scale commercial irrigation whose main purpose is to accelerate social economic transformation through increased agricultural productivity, agro processing and easy access to markets.

Contact address

 The chairperson

Internal procurement and and disposal of assets committee

Greenbelt authority

Mwai house ( opposite TAMA house )

Floor # 2 –conference room

Convention drive

City Centre

Lilongwe.

The Malawi Government says it is yet to join the Powering Past Coal Alliance (PPCA) on their campaign to end coal power generation globally.

PPCA is a group of 137 countries, cities, regions and orgamisations aimed dramatically accelerating the phasing out of fossil fuel such as coal through innovation and the deployment of clean technologies in five key sectors of the economy including: power, road transport, steel, hydrogen and agriculture.

Malawi’s stand on the development has been revealed after its participation at this year’s 26th Conference of Parties to the United Nations Framework Convention on Climate Change (COP26) which took place from October 31 to November 12, 2021 in Glasgow, Scotland.

Alongside the conference, PPCA Secretariat and United Kingdom (UK) presidency hosted discussion and bilateral meetings on transition to clean and renewable energy, and clean cook stoves, championing campaign on phasing out coal generation; and delivering the historic Paris Agreement.

Presenting an update from the meetings in Parliament, Minister responsible for Forestry and Natural Resources Nancy Tembo said though many countries adopted the Glasgow Climate Pact and pledged to end coal power generation by 2030 and some 2040, Malawi is not ready to answer the call considering the current electricity situation.

Tembo said: “Malawi’s position is to join the Alliance later considering that the country is currently faced with electricity shortages which are slowing down social economic development, yet it has huge coal reserves that can be used for power generation but have not been exploited.

“Malawi has potential to generate 1000 MW from coal. This is very insignificant compared to about 2.045GW which is being generated from coal globally.”

“Nearly 200 countries adopted the Glasgow Climate Pact in Scotland late evening of Saturday November 13, 2021 at the end of COP26.”

“The outcome package asks countries to replace their 2030 national climate action targets with more ambitious emission reductions by the end of next year, 2022.”

“It also calls on countries to comply with standards set by the 2015 Paris Agreement, which asked countries to make changes to keep global warming “well below” 2°C and aim for 1.5°C by the end of 2022 to prevent climate catastrophe.”

According to Tembo, from the discussions and bilateral meetings they had on transition to clean and renewable energy, and clean cook stoves, more than 40 countries pledged to phase down use of coal, the single biggest source of greenhouse gas emissions; signatories to the deal including heavy coal users Poland, Ukraine and Vietnam.

She said also said developed countries pledged to phase out coal in the 2030s, with developing countries committing to a later timeline of 2040s.

From the meeting, Australia did not commit to phasing out the use of coal while at least 20 countries including Italy, Canada, the US and Denmark along with public financial institutions pledged to stop financing overseas fossil fuel industries by the end of 2022, diverting the cash to clean energy activities.

Tembo also reported that countries accounting for 90% of the world’s GDP pledged to reach net-zero emissions by the middle of this century.

Key among them was India which pledge to reach net-zero emissions by 2070 through a massive expansion of renewable energy in the next 10 years until it accounts for 50% of total usage, thereby reducing its emissions in 2030 by 1-billion tonnes from a current total of around 2.5 billion.

In Africa, rapidly developing Nigeria also pledged net-zero emissions by 2060.

Tembo said: “Malawi also committed 50% emission reduction target, if full external financial and technical support is received, by 2040, compared to the business-as-usual scenario, as outlined in the revised Nationally Determined Contribution (NDC).”

“The Glasgow Pact also agrees to fund the Santiago Network on Loss and Damage which will connect vulnerable developing countries with those who can provide the technical assistance, knowledge and resources they will need to address climate risks and avert, minimize and address future losses and damage.”

“Malawi will benefit from the full operationalization of Network as it will support in determining country needs to address loss and damage from climate change.”

“At COP26, it was also interesting to see some developed countries coming forward to provide funding for loss and damage, for example Scottish Government has pledged financial support amounting to two million pounds towards a Loss and Damage Fund.”

During the discussions and bilateral meetings, Tembo was accompanied by the Minister of Foreign Affairs Eisenhower Nduwa Mkaka and Minister of Education Agnes Nyalonje.