Mining & Trade News

The Directorate of Road Traffic and Safety Services has warned that it will revoke road service permits as well as deregister from its system taxis that are operating as intercity public service vehicles describing the trade as unlawful.

In a press release dated 25 September, 2020, the Directorate also says all drivers found on the wrong shall have “their professional driving permits revoked and subsequent offences suspended or cancelled.”

“The Directorate has noted with dismay that most taxis are operating as intercity public service vehicles which is against the Road Traffic Act (1997) and Road Traffic Regulations (2000). The regulations restrict operation of taxis within the cities or towns.”

The Directorate has also appealed to the travelling l public not to compromise their safety by avoiding the use of these taxis since they operate illegally, exceed the allowable seating capacity, they are fond of over speeding, and their insurance does not cover operation of such vehicles and their passengers.

The vehicles known to be doing this kind of illegal operation include Sientas, Voxys, Noahs, Hondas, Serenas and other similar vehicles.

The influx of taxis in major routes such as Blantyre-Lilongwe and Blantyre-Mzuzu is posing strong market competition to big buses, which are registered to ply these routes.

The Malawi Government says it is keen to revive rail transport as one of the main transport modes for the country.

Spokesperson for Ministry of Transport and Public Works Andrew Mthiko says currently the Government is working closely with the concessionaire Central East African Railways on the rehabilitation of railway transport facilities along the Nacala Corridor including train stations at Nkaya, Balaka, and Mchinji.

“I can also assure Malawians that the idle Limbe-Marka railway line will start functioning soon since rehabilitation and reconstruction works are underway between Limbe in Blantyre and Marka in Nsanje,” Mthiko said.

Malawi has a multi-modal transportation system comprising of road, rail, air and inland water transport. Most of the key infrastructure for the road, rail and inland water transport modes forms part of one or more of the international corridors used for the transportation of international freight including Nacala, Beira, Durban and Dar es Salaam. 

The national rail network covers central and southern parts of the country including the newly built line Nkaya to Kachaso (west) which is 136.5 kilometres long.

The other rail lines include Nkaya to Nayuchi which is a 99km stretch to the Eastern border with Mozambique, Nkaya to Limbe to Makhanga (South) which is 297 km, and Nkaya to Mchinji or Chipata (North and northwest).

The entire route is around 400km which comprises of 12km section between Chipata and Mchinji; 110km between Mchinji and Kanengo; 105.5km between Kanengo and Salima; and 172km section between Salima and Nkaya. The line terminates around 389km from the Tazara line and around 150 km from the Petauke mine in Zambia. The line loading capacity is 18 tonnes between Chipata and Salima, and 15 tonnes per axle between Salima and Nkaya.

Malawi mainly uses road transport which is more expensive that rail and water transport.

The Ministry of Tourism, Culture and Wildlife says the country has lost over MK40-billion in revenue and 35, 000 Malawians have lost their jobs due to the outbreak of the global coronavirus (Covid-19) pandemic in the first half of the year 2020.

Speaking in an exclusive interview, Public Relations Officer in the Department of Tourism Sarah Leah Njanji lamented that Covid-19 has affected business opportunities due to cancellation of bookings and travel restrictions which led to a sudden drop in consumer demand of hospitality services.

Njanji said the fall in consumer demand led to an unprecedented fall in international tourism numbers that culminated into revenue decline and loss of jobs.

She said: “The revenue collected in National Parks and Game Reserves has also reduced as a result of reduced patronage.”

“Protection of iconic species and other conservation initiatives are under threat due to loss of livelihoods for communities living close to protected areas.”

“The arts and crafts subsector has also lost business opportunities as they have not been able to sell curios and also the number of people visiting monuments has reduced posing a risk towards conserving and preserving of cultural heritage.”

Meanwhile, the country is in a national tourism month which falls in September every year as designated by the government following the United Nations World Tourism Organization’s (UNWTO) declaration of September 27th as Tourism Day.

UNWTO designated the day on the expense of raising awareness on the role of tourism within the international community and to demonstrate how it affects social, cultural, political and economic values worldwide.

Together with UNWTO, Malawi is celebrating this year’s Tourism Day under the theme of ‘Tourism and Rural development.’

In her remarks on the commemoration, Njanji disclosed that the country will hold no public celebrations for the national tourism month in respect of covid-19 pandemic restrictions.

She said instead, the Government will use all sorts of media platforms to disseminate vital information, and that the Department will be available for tourism related requests.

Njanji said: “Through various forms of media, the Department of Tourism in the Ministry of Tourism, Culture and Wildlife has been able to disseminate information about the theme, linking it with the unprecedented time that we are in and also looking at how domestic tourism can be used to spur recovery from the effects that Covid-19 has had to the industry.”

She said though the pandemic has made the year 2020 challenging one to the sector, the outbreak has also offered the Department an opportunity to consider implementing strategies that will ensure a more resilient, more inclusive and more sustainable tourism sector.

Early September, Minister responsible for Finance and Economic Planning Felix Mlusu presented the 2020/2021 fiscal financial budget where he allocated K58.7 billion in the sectors of energy, natural resources, tourism, environment and forestry.

Responding to the development, Njanji hailed the proposed budget saying the allocation is enough to revamp the sector through carrying out budgeted items.

Njanji said the allocation will be redirected toward: increasing domestic tourism promotion with an overall aim of increasing the number of people travelling within the country; trainings and capacity building for enforcement officers in protected areas to help combat wildlife crime; training communities in problem animal control; promotion of culture for tourism purposes; and capacitating arts stakeholders with trainings.

The pandemic also led to the cancellation of this year’s Takulandirani Malawi International Tourism Expo (MITE), a platform that the nation uses to market the country’s tourism products and services. 

The cancellation affected the sector whereas it failed to host buyers and other exhibitors, disrupting market network opportunity between the local operators and international buyers. 

Malawi Stock Exchange listed Sunbird Tourism plc says restrictions on travel and holding of meetings imposed by the World Health Organization (WHO) due to the outbreak of the novel coronavirus (Covid-19) pandemic has greatly impacted on its business and the entire hospitality industry in the first half of the year 2020.

Sunbird said this in condensed interim financial statements for the half year period ended June 30, 2020 which was signed by its  Chairman Phillip Madinga and Director Anderson Kulugomba.

“The hospitality industry is one of the worst hit industry from the impact of Covid-19 pandemic.”

“The pandemic has had significant adverse impact on the business, affecting all its segments due to worldwide health guidelines and restrictions which resulted in the reduction of travel, both local and international, and the holding of meetings,” reads the statement.

It says the pandemic has influenced the company’s total revenue to decline from a total of MK9.038 billion of last year to MK6.120 billion this year representing 32%.  

The report says in the total revenue, catering division revenue was amounted to MK454 million representing 39%, lower than the revenue achieved for the same period of MK739 million.

It also says the corporate segment, at 68% of total room nights sold, continued to be the anchor segment followed by conference segment at 16%.

The report reads: “These segments are expected to be the key drivers for the business in the short to medium term. The company is implementing various initiatives to grow other segments such as leisure in order to diversify revenue sources.”

It also laments that pre-election political tensions created bottle necks in the company’s revenue sources following reduction in the activities by customers due to cautions of travelling during the first half of the year.

Meanwhile, the company’s operating costs on administration and other expenses totaled MK5.8 billion, 3.4% higher than same period last year, which is favorable compared with inflation trends.

Finance costs totaled MK289 million which was 181% above last year’s MK103 million, driven by capitalization of completed projects from prior year.

The company also registered loss after tax of MK1.336 billion compared unfavorably to the profit of MK1.197 achieved in the same period in the year 2019.

Subbird projects continued global recession due to the pandemic negatively affecting the hospitality industry.

However, the firm is optimistic for a gradual improvement to the sector following easing of lockdowns in various countries and reopening of borders and airports.

Sunbird says the recovery process will be complemented by the new government’s transformation agenda premised on the three key themes of inclusive and sustainable growth, macroeconomic stability and sound financial management.

Reads the statement: “There are a number of key product improvement plans that have been implemented across the company and some that are currently underway.”

“Construction of a new 42-bedroom beach resort at Sunbird Livingstonia Beach is at an advanced stage and expected to be opened later in the year, while construction of additional 15 rooms at Sunbird Nkopola Lodge is in the final stages and it is expected to be completed in the third quarter of the year,” says the company. It says the Board’s focus remains to continue building a resilient brand by improving service delivery and guest experience through product and infrastructure improvements and intensifying sales and marketing activities to ensure that the group maintains its market leadership in the hospitality industry.

The Ministry of Tourism, Wildlife and Culture says Malawi has lost billions of kwacha in revenue that could have been realized in the sector due to the novel coronavirus (Covid-19) pandemic.

Public Relations Officer for the Ministry Sarah Leah Njanji tells Mining and Trade Review that games and parks and hoteling subsectors are the worst hit since they mainly depend on international travelers for business.

Njanji explains that over 90% of tourism related operations have experienced a reduction in revenue of between 85 and 100% since February 2020.

“Generally, progress has been slow this year due to Covid-19 pandemic. Travel restrictions and closing of borders in our key source markets led to temporary closure of some local businesses, loss of jobs and also loss of business due to cancellation of bookings,” says Njanji.

She also says cancellation of annual Takulandirani Malawi International Tourism Expo and other mega events has negatively impacted a lot on financial earnings from the sector.

Meanwhile, the Ministry is working on modalities to revive the tourism and hospitality industry which include promotion of domestic tourism.

She says, among other things, the Ministry is using local digital platforms as a way of attracting local tourists.

“The focus now is on recovery but doing so in a responsible manner. This means that all operations in the industry must comply with the necessary health protocols,” she says.

She also says the department is preparing to develop a risk crisis management strategy.

The Ministry of Energy says the novel coronavirus (Covid-19) pandemic has negatively impacted on progress in the implementation of ongoing Extended Phase 8 of the Malawi Rural Electrification Project (MAREP).

MAREP is being implemented by the Malawi Government with an aim of transforming lives of people living in the rural and semi-urban areas by ensuring increased access to electricity.

Public Relations Officer for the Department of Energy Saidi Banda told Mining & Trade Review that Covid-19 has greatly affected the project as boarder restrictions that countries have imposed to curb the spread of the disease have disrupted supply chains for construction materials.

Banda said the Extended MAREP Phase 8 requires more construction materials following the increased number of sites in the phase but the Department could not manage to acquire the materials due the boarder restrictions.

He said: “In view of the extension, additional materials were procured. However, while the suppliers were in the process of delivering materials, various countries from which the materials were coming from effected lockdowns.”

“This led to a delayed delivery of materials which has affected the completion of construction works for extended MAREP Phase 8.”

“The delay in completion of construction works for extended MAREP Phase 8 has affected subsequent activities such as way leave and compensation; and material audit for the phase.”

Banda also said the covid-19 pandemic has failed the MAREP secretariat study tour and training.

He said the study tour was aimed at learning what other countries did when coming up with Rural Electrification Agencies which the Ministry is intending to establish. 

Banda said the disruption has led to the sluggish progress on the establishment of Rural Electrification Agency. 

“The Ministry carries out local and foreign capacity building training for the MAREP Secretariat which has been hugely affected by the covid-19 pandemic. Secretariat had sent to foreign trainings few officers whose training calendars were appearing before the effecting of lockdowns in the respective countries of training,” Banda said.

In the year 2020, the Ministry of Energy planned a number of activities including; construction of Extended MAREP Phase 8 power lines; MAREP sites impact assessment survey; data collection for formulation of concessions for MAREP sites from Phase 1 to Phase 8; design of high voltage and medium voltage overhead power lines for MAREP Phase 9; survey of overhead power lines routes for MAREP Phase 9 sites; procurement of construction materials for MAREP Phase 9; and procurement of construction contractors for MAREP Phase 9.

The Ministry also planned to conduct: Way leave assessment and Compensation for MAREP Phase 9 sites; construction of Natural Resources College (NRC) warehouse forecourt; procurement of forklifts for MAREP materials stores; connection of low income households to electricity under Ndawala Scheme; conducting study tour for establishment of Rural Electrification Agency.

Only three activities were completed, seven are in progress while the rest are to commence in the last quarter of the year.

Banda said the completed activities include: design of high voltage and medium voltage overhead power lines for MAREP Phase 9; procurement of forklifts for MAREP construction materials storage facilities; and procurement of additional materials under Extended MAREP Phase 8.

The activities in progress include: construction of Extended MAREP Phase 8 power lines; Technical Material Audit for Extended MAREP Phase 8 sites; way leave assessment and compensation for extended MAREP Phase 8 sites; way leave assessment and compensation for MAREP Phase 9 sites; survey of overhead power lines routes for MAREP Phase 9 sites; procurement of construction materials for sites under MAREP Phase 9; and delivery of additional materials under Extended MAREP Phase 8.

The Ministry introduced the Ndawala Scheme to ensure that low income households are connected to electricity.

 “This is a scheme where low income households are given soft loans with no interest to wire their houses. The loan is recovered over time by deducting 40% from the units purchased by a beneficiary,” Banda said.  

Government under MAREP has managed to electrify 1074 centres across the country including 849 in Phase 8. Government policy to achieve 30% of grid extension by year 2030.

Despite an economic meltdown as a result of the novel coronavirus pandemic (Covid-19), mobile communication network provider Airtel Malawi Plc has registered a huge growth in profit after tax.

According to the unmodified financial statement for half of the year ended June 30, 2020 the Company has registered a profit of K11,415-Million up from K2,016-Million for last year.

Airtel Malawi Board Chair Alex Chitsime says in the statement the huge rise in profits is mainly due to an increase in operating profit and lower finance cost.

“Lower finance cost was due to lower interest expense on account of repayment of Shareholder loan in 2019 and also due to stability of the kwacha against the Us Dollar,” says Chitsime.

The results peg Airtel’s revenue growth at 23.7% which was largely driven by the growth of its customer base up by 20.6% to 4-million.

“Revenue growth was broad based across all key segments; voice up 8.5%, data up 55.3% and other revenue up 36.7%. 

Chitsime says despite the economic impacts of Covid-19, the Company’s view on the medium term opportunity for growth in Malawi has not changed as the telco sector will continue to benefit from population growth and need for increased connectivity. “We expect to continue to implement our strategy focusing on increasing mobile penetration in Malawi through investments in rural unserved market as well as digitalize the economy by increasing penetration of data usage,” he says.   

The Malawi Government says it is working to ensure that the 2022 deadline for connecting the country’s power grid to that of Mozambique is not missed.

State President Lazarus Chakwera said in his State of the Nation Address in Parliament that his government is banking on the interconnector to address the country’s power deficit.

“Once this is done, Malawi will have access to the Southern Africa Power Pool,” Chakwera said.

 Chakwera also said in order to address the power shortages, his government is facilitating construction of 60 MW solar power plant in Salima and is in the process of securing a strategic sponsor for the 350MW Mpatamanga Hydro Project on Shire River.

“We are also concluding Independent Power Producer Agreements, which will open the sector to private investors, which will require new leadership at Electricity Supply Corporation of Malawi (ESCOM) to facilitate such reforms as new tariff structures that reflect market realities,” he said.

Chakwera also said his government will revisit existing energy contracts and petroleum production sharing agreements in line with the law, ending those that are economically unsustainable and signed under questionable terms during the era of the previous administration.

Malawi’s electricity penetration rate stands at only 18%.