Mining & Trade News

The Malawi Investment Trade Centre (MITC) has challenged local Small and Medium Enterprises (SMEs) to produce quality products that can compete favourably on both local and international markets.

Speaking during the official opening of a three-day mini trade fair in Lilongwe, MITC Board Member, Fumbani Nyasulu, who also represented the Principal Secretary in the Ministry of Trade, said local production of good and high quality products can easily turn the country from a gross importing nation into an exporting one.

“The government agenda is to export more and import less, hence, our call on SMEs not to only focus on the local market but to produce with the international markets in mind.

“We should be competitive enough to replace the imported products in the shops with quality and affordable local products,” said Nyasulu explaining that government has put in place measures that will assist local producers build their capacities in different value chains.

The mini trade fair has been organized to give the local SMEs an opportunity to come together and share experiences with their fellow sector players, said Nyasulu adding that the activity is also one of MITC’s functions of promoting trade and investment.

The fair has been organized in collaboration with African Development Fund (ADF), Small and Medium Enterprises Development Institute (SMEDI) and National Association of Small and Medium Enterprise (NASME). The theme of the fair is “SMEs Driver of Industrialization and Economic Growth.”

In his remarks, SMEDI Chief Executive Officer Rodrick Chataika pledged to continue building the capacities of local SMEs. 

“SMEDI will continue playing its important role of capacitating these SMEs through training programs, educating them in business entrepreneurship, management skills, financial literacy on how they can prepare their financial statements and accounting records and also financial proposals if they want to access funding from partners and also from different banks,” said Chataika, whose organization has entered several agreements intended to link SMEs to local banks for business financial support.

He further explained that SMEDI also links SMEs to potential markets, apart from providing incubation centers where entrepreneurs are trained to add value to raw materials and convert them into marketable products.

Chataika said the incubation centers also target local Artisanal Small Scale Miners (ASMs) to turn their raw gemstones into valuable products by professionally cutting and polishing them into internationally marketable products.

Endrina Maxwell, owner of Dwalle Supplies and General Dealers lamented limited capital as the main challenge obstructing her business to compete with bigger companies.

She however sees the formation of cooperatives as an alternative but said she would in the meantime want to run independently. “I want to grow as an individual,” she said

The Reserve Bank of Malawi’s Monetary Policy Committee (MPC) has projected that the rise in fuel prices on the domestic market will trigger a corresponding increase in the rate of inflation in 2022.

It is anticipated that the fourth quarter of 2021 will see the inflation rate shoot to 8.9percent from 8.2percent as a result of the fuel price adjustment as well as the rise in maize prices, persistent disruptions to global supply chains among other factors.

According to a statement signed by MPC chairperson Dr. Wilson Banda, the inflation rate averaged 8.7 percent in the third quarter of 2021 against a projection of 8.8 percent and lower than the 9.1 percent recorded in 2021.

“The decrease is attributed to moderation of the food inflation rate as non-food inflation rate increased marginally. Specifically, food inflation rate averaged 10.3 percent in the third quarter of 2021 compared to 11.1 percent the second quarter of 2021,” the statement says

“On the other hand, non-food inflation rate averaged 7.2 percent in the third quarter of 2021, from 7.1 percent in the previous quarter,” Banda says in the statement adding that headline inflation rate is now projected to average 9.1 percent in 2021, representing an upward revision of 0.3 percentage points from the third quarter of 2021.

He also explained that Malawi’s economy is rearing from the developments in international oil prices as crude oil prices rose to an average of US$73.0 per barrel in the third quarter of 2021 from US$68.6 per barrel in the second quarter.

Banda noted that the increase was propelled by the growing demand for the commodity following an economic recovery in the northern hemisphere and the global energy crunch.

“Brent crude oil prices are anticipated to remain around the current levels for the remainder of 2021 but are expected to decline to an annual average of US$66 per barrel in anticipation that growth in production from OPEC+, U.S. tight oil, and other non-OPEC countries will outpace consumption,” says the statement Meanwhile, the MPC has maintained the Policy Rate at 12.0 percent while the Lombard rate is at 0.2 percent points above the Policy Rate. The Liquidity Reserve Requirement (LRR) ratio on both local currency and foreign currency deposits remain at 3.75 percent in a bid to minimize policy trade-off and to better manage inflationary pressures as well as to support economic recovery

The announcement by the Bankers Association of Malawi (BAM) to introduce a 16.5 percent Value Added Tax (VAT) on various banking services that its members offer to their customers, attracted an immediate public reaction after it was made on Thursday.

The statement signed by BAM’s Acting Chief Executive Officer, Lyness Nkungula, says the association made the decision following a recent parliamentary amendment to VAT Act.

“Bankers Association of Malawi on behalf of its members…. would like to inform the general public that from 1st November, 2021 some of its banking services will attract Value Added Tax (VAT) at 16.5 percent,” reads the statement in part.

The development sparked a national debate with people protesting the pronouncement saying charging customers on every banking transaction only serves to stifle the economic well-being of Malawians, most of whom earn their livelihoods through precarious informal jobs.

Prevailing comments on the social media indicate that people expect the banks to start charging 16.5 percent VAT on bank transactions such as deposits and withdrawals.

“This means that the government introduced MK100,000.00 free tax band is now useless as it will be eaten away by the banks,” notes one commentator.

Economist, Prof. Ben Kalua explains that the introduction of the tax on banking services will not directly affect low income people because they rarely, if at all, use banking services.

“It is a welcome move since poor people are already financially excluded from using banking services,” says Kalua.

However, the Malawi Revenue Authority (MRA) has cleared the mist saying the BAM statement has misled the public because the tax measure does not in any way affect normal banking transactions such as deposits and withdrawal of money.

Briefing the press, MRA Deputy Commissioner, Henry Ngutwa, explained that parliamentary amendment is intended to ensure that banks must meet their obligation of settling 16.5 percent of what they charge their customers on non-related banking services such as printing bank services, ATM charges and fees for processing credits.

The revenue generating body has also said, following the clarification, it does not expect banks to increase their charges.

But commenting on the merits of the Act to clarify banking services and widen the tax base, Prof. Betchani Tchereni says the tax initiative is part of Malawi’s drive towards creating internal sources of revenue as the country drifts away from external sources of income.

“We really need to broaden our tax base,” he says observing that the country experiences pressure to implement its developmental programmes because its development financing is heavily and hugely dependent on external sources as less than 50 percent of its population pay taxes. “We really need to have our own sources of income so that we can do more infrastructure developments and provide social services of higher quality,” Tchereni says but was also quick to note that the proposed tax was likely to affect the customer base of various banking institutions as low income generating people will probably decide to seek for other money saving means in a bid to run away from the 16.5 percent banking VAT.

Real estate consultants, Knight Frank Malawi, has singled out high inflation as one of the reasons for the stagnation of transactions in Malawi’s property industry.

A research study conducted in the first half of 2021 shows that as the country’s monetary policy focused on maintaining single digit inflation, overall inflation increased from7.7 percent in January to 9.1 percent in June. At the same time, the Malawi kwacha depreciated by 5.92 percent.

The research notes that during the study period, the market was generally passive with the residential sector showing resilience while the demand for prime residential property for rent in the commercial sector remained stable with limited number of sales transactions.

However, the prime residential market is reported to have registered a rental decline of between 15 – 20 percent in both Blantyre and Lilongwe cities as some houses became vacant for a long period due to low demand resulting from a sudden flight of expatriates during the height of the Covid-19 pandemic.

“Unfavourable interest rates for housing finance reduced borrowing hence self-funded home construction remains strong in both high density locations and affluent suburbs of all the cities.” the report says

Knight Frank also highlights that the office market demand remained passive during the first half of the year as a result of the scaling down of small and medium enterprise occupiers and relocation of others to residential areas.

It says this year, office vacancy rates reduced slightly as compared to the same period last year though it became subdued in the period under review with vacancy rates of between 20 to 25 percent.

According to the consultants, the vacancy rate, lower rental payments by tenants and subdued business influenced by the covid-19 pandemic all pose a great threat to rental collection.

They further note that in an effort to mitigate the impact, some property owners reviewed rentals downwards by-5 to-10 percent as others maintained existing charges with very few increasing their rental fees.

Meanwhile, Knight Frank says there is an anticipation that the property market will continue to adapt to the current trend in second half of 2021 with little light to normalize in the short to medium term due to rising demand for space.

The Ministry of Trade has embarked on a drive to revive idle community factories created as cooperatives under the One Village One Product (OVOP) initiative.

Industry Minister, Roy Kachale Banda, has said that government has taken this step because it is aware how much these factories can contribute to the growth of the manufacturing industry in the provision of value addition to the products that the country otherwise exports in raw form.

Kachale made the remarks in Blantyre when he toured Mankhamba Bee Keeping and Kunthembwe Producers and Marketing Limited Cooperatives where he learnt that the two institutions are failing to operate because of lack of electricity and reliable water supply among other challenges, despite being equipped with the necessary facilities for value addition of a number of agriculture products.

” We will invite the Ministry of responsible for energy as well as officials from the Electricity Supply Commission (ESCOM) to a roundtable discussion to expedite the process of supplying electricity to the facilities”, said Kachale.

The minister also disclosed that his ministry is in the process of identifying experts to train cooperatives on best practices in processing competitive and quality products besides orienting them with business management skills, a common challenge among cooperatives.

Mankhamba Bee Keeping Cooperative has a warehouse but need machinery and electricity to start processing and add value to the honey they already produce while Kunthembwe Producers and Marketing Limited Cooperative has not been connected to the electricity grid, despite being furnished with a warehouse and equipment for processing groundnuts into cooking oil and groundnut flour.

Implemented mostly in rural areas to accelerate value addition processes, the OVOP initiative, also formed cooperatives to run the factories and create employment for the country’s rural population.

OVOP has contributed to growing rural economies and attracting people away from migrating to urban centres in search of economic opportunities.

Value addition is one of the key areas of focus for the attainment of the country’s long-term objective of ” an inclusively wealthy nation” under the Malawi 2063 agenda.

Theft and vandalism of rail infrastructure has become a major safety risk along the 706 km track line operated by Nacala Logistics Limited in Malawi.

Speaking on the sidelines of the launch of a Railway Safety Week in Blantyre, Nacala Logistics Country Director, Gustavo Stein, told Mining and Trade Review Publication that theft and vandalism of rail-line equipment poses increased threat to human lives.

He revealed that the ongoing damage to rail infrastructure did not only affect Nacala Logistics as an operator, but also the national economy, the social and economic lives of poor commuters and other land users along the rail-line where 16 accidents have now been registered across the country.

“We are struggling with vandalism on our railway systems where increased theft of pandrol clips and other rail materials has forced us to suspend operations between Limbe and Balaka as a safety measure to protect our passengers,” he said.

Stein explained that the safety week was one way of raising awareness on the dangers of tampering with rail materials.

At the end of the exercise, the company is set to attain a zero accident target through the use of diverse communications solutions to reach out to rural masses along the railway lines on how to prevent railway associated accidents.

In her remarks, the Deputy Transport and Public Works Minister, Nancy Mdooko, who graced the occasion, said the Railway Safety Week is also part of governments’ effort to improve the railway system so that it moves in line with national transport plans.

“This event is important for people living close to railway lines so that they understand that it is 100% possible to prevent railway associated accidents,” she said of the function which is expected to be an annual undertaking.

This year’s commemorations are being hailed under the theme “Zero Compromise, Zero Accidents, Zero Harm” and is running from October 24 to 30, 2021.

The theme was chosen to highlight the importance of adhering to safety principles without compromise.

Nacala Logistics runs freight and passenger services with the freight services operating both internationally and domestically while the passenger service only operates within the country.

The company runs 53 locomotives and 669 cargo wagons, 56 of which are tankers.

Malawi Milk Producers Association (MMPA), which is a mother body for dairy farmers and manufacturers of dairy products in the country, says there is a serious need for local farmers to embrace dairy farming which has the potential to improve their economic status.
MMPA Director Herbert Chagona said in an interview that the local dairy industry is hugely affected by the decrease in the number of dairy farmers.
Chagona explained that there are only about 1000 large scale dairy farmers in the country, the number he said is inadequate to produce sufficient volumes of milk to meet demand for local dairy processors.
He said his association is currently sensitizing farmers to realize the importance of embracing the industry so that there is an increase in the number commercial dairy farmers to satisfy local demand for dairy products and save foreign exchange through import substitution.
Chagona said, among other interventions, the organization has been importing highly productive bulls which are distributed to cattle farmer associations for cross breeding in order to increase milk production.
He also said they have been importing dairy goats to provide supplementary milk.
Chagona also said scarcity of grazing land is contributing to farmers’ reluctance to keep dairy cattle.
He, therefore, said his association is conducting a continuous training programme for farmers to establish their own pasture lands.
“There are several factors contributing to farmers’ loss of interest to venture into dairy farming, the major reasons being lack of government’s interest to develop the sector and scarcity of grazing land in most parts of the country,” he said.
While complaining that Malawi has the lowest milk consumption rate in Africa, Chagona said, consumption rate can improve if there are more dairy farmers and cattle in the country.
He also urged Malawians to change their attitude towards milk consumption saying some perceive it as a luxury.
World Health Organization recommends that a person should take at 100 litres of milk per year. But according to Chagona the highest milk consumer in the country takes only eight litres of milk per year which he described as pathetic.
“We can also encourage farmers to keep dairy cattle through advising people to consume more dairy products. It is sad that only a few Malawians include milk in their meals,” he said.
He also expressed concern over unavailability of dairy products’ manufacturers in some regions of the country saying it unfortunate that Northern Region which has the highest number of cattle in the country does not have any dairy manufacturing company to provide a reliable milk market to farmers.
He, therefore, revealed that his association is currently negotiating with some companies to establish their branches in the region.
The Association has also urged dairy farmers in the country to sell their milk at Milk Bulking Groups (MBG) where they can be offered better prices for their products.
Edwin Chigundo, Marketing Manager for Lilongwe Dairy 2001 Limited concurred with Chagona saying there is great need to encourage farmers to take dairy farming seriously.
He explained that the organization’s production is usually limited due to milk supplies which are usually low and fluctuative.
“There have been complaints that prices of most of our products are high, but the cause for that is insufficient milk supplies. High prices on dairy products can be avoided if farmers are encouraged to embrace dairy farming which may consequently lead to increased production and then reduced commodity prices,” said Chigundo.

The Poultry Industry Association of Malawi (PIAM) has expressed concern over massive exportation of soya beans, which is a major ingredient in the production of chicken feed, saying it has resulted in soaring prices of the feed due to low supply.
The Malawi government is encouraging exportation of soya beans as a way of ensuring that local farmers who are usually duped by middlemen benefit from their sweat.
But PIAM said the decision is adversely affecting the poultry industry which relies on the bean as its main source of raw material for the production of most chicken feeds.
PIAM Technical Director Eric Chuma said continued export of the crop has led to the drop in the legume’s supply to local poultry feed manufacturers who have consequently hiked commodity prices, which is choking the poultry industry.
Currently the legume’s market price has jumped from about K500 to K800 per kilogram which Chuma said is a threat to the survival of the local industry.
“As an organization responsible for poultry farming in the country, we are concerned with government’s decision to export all the beans harvested in the just ended season. The exportation means the crop would be found in low supply locally, which would eventually affect local poultry production particularly by farmers who would be demanded to pay more for the feed,” said Chuma.
Chuma said the development would also affect poultry products consumption in Malawi, which is the lowest in Southern African Development (SADC) region.
“As much as it is a fact that soya export will affect poultry feed manufacturers, we are concerned that the development will lead to the reduction in consumption of poultry products whose prices are likely going to increase. For your information World Health Organization (WHO) recommends that one person should consume at least 8 kilograms of chicken meat a year, unfortunately, the highest consumer in Malawi eats less than that, which is the lowest in SADC,” said Chuma.
He also urged government to encourage farmers to start producing huge quantities of the crop so that the country can have sufficient quantities of the seed for local consumption and export.
Records have shown that, Malawi produces 200 thousand metric tons of soya beans a year which is against the demanded 500 thousand Metric tons.
Chuma said there are expectations that exportation of the legume might lead to the drop in number of poultry farmers as many will not afford buying feed at exorbitant prices.
He said such a situation may affect exportation of poultry products and domestic incomes of small-scale poultry farmers.
Operations Manager for leading poultry producer Central Poultry (CP) Michael Davis complained that soya exportation has affected operations of the company.
He said CP is already buying poultry feed at higher prices and such price increases may be effected on prices of their end products in so doing impacting on consumers.
“It is true that Soya beans which is one of the raw materials for manufacturing poultry feed is in low supply and expensive which is affecting our business, as prices of most chicken feeds have gone up,” he said.
Local animal production sector contributes 11 percent to Malawi’s Gross Domestic Product (GDP) with poultry industry alone contributing about eight percent.
Meanwhile, the Farmers Union of Malawi (FUM) has called on government to put in place measures aimed at promoting poultry farming in the country saying the industry has potential to substantially contribute to the economy of the country.
FUM’s President Frighton Njolomole made the call in an interview with Agribusiness Review following an observation that raising of domesticated birds such as quails (zinziri) has become popular in the country.
“We cannot deny the fact that the poultry industry is now one of the fastest growing industries in the commercial farming fraternity looking at how popular raring of birds has become,” said Njolomole.
Njolomole urged authorities to respond to the growing interest of farmers at both local and urban level in the poultry business by putting in place interventions that will help them expand their business.
He said “The government needs to deploy extension officers to be inspecting the poultry farming sites to teach farmers best practices.”
“We would definitely love to have a lot of people from agricultural sector who are committed in what we, as farmers, are doing. We have young men and women who are working tirelessly in the industry.”
Njolomole also said the government needs to promote poultry farming so that Malawi becomes self-reliant on production of chicken products.
“The country has the capacity to produce many chickens to meet local demand and export to other countries. We should not be importing chickens because of complacency,” he said.
Njolomole said if Malawi exploits the full potential of the poultry industry, government can collect increased revenue in form of taxes, and the industry can also substantially assist in improving the financial well-being of farmers and providing nutritional requirements to the population.

With the Malawi Government pushing to see a majority of the country’s subsistence farmers graduating into commercial farmers, local seed producers have called upon farmers in the country to adopt the use of hybrid seeds which are high yielding and early maturing in order to substantially benefit from their trade.
The call has come at the time there are reports that some farmers are resistant to the use of modern agricultural methods including the use of hybrid seed varieties.
Seed Trade Union of Malawi (STUM) Business Development Officer Kawayawaya Chisi said local farmers can benefit from their activities if they start using improved seed varieties which are high yielding and early maturing.
He said studies have revealed that farmers using hybrid seeds benefit more than those using local seed varieties.
He said as one way of ensuring that most Malawians are reached with information about the importance of using hybrid seed varieties, STUM engages some Non-governmental organizations (NGO) to sensitize farmers in the rural areas on the importance of using modern seed varieties.
Bayer Malawi Limited Country Head Chikondi Dalitso Ng’ombe said there is a serious need for local farmers to start using modern agricultural technologies such as utilisation of improved seed varieties if the industry is to develop.
Ng’ombe said her Company is currently organizing meetings with farmers to convince them on the benefits of improved seed varieties.
Demeter Seed General Manager Prashant Khatri also said the use of improved seed varieties is the right direction farmers should take, if they want to benefit from their works.
Ruster Seed Managing Director Funny Thengo said the use of improved seed varieties leads to the realization of high-quality yields for the benefit of farmers through ensuring domestic food security and surplus for sale.
“Though some farmers are resistant to the use of modern seed varieties, we are doing everything possible for them to understand the benefits of using such seed varieties,” said Thengo.
In an attempt to ensure that local farmers use hybrid seeds, Seed Co, one of the local seed producers, has ventured into a programme of reaching remotest places of the country with their products. The Company’s Commercial Director Gift Kawamba said in an interview that through the initiative farmers who are resistant to the use of modern seed varieties are being engaged.
“We have realized that most farmers in the rural areas either use local or recycled seed varieties, so we have come up with the initiative aimed at reaching masses in the remotest areas with our products,” said Kawamba.
Premium Seed Director Frank Samidu said in an interview that the only way the country can increase its annual food production to meet the growing demand is tthe use of modern seed varieties that can adapt to climate change problems such as fluctuating rainfall patterns.
“It is painful for farmers to toil throughout the season just to get handful yields because they used wrong seed varieties,” said Samidu.
PYXUS Agriculture Limited Managing Director Ron Ngwira said in order to encourage farmers to use improved seed varieties, his Company is working with over 6,000 smallholder farmers on contract farming.
Ngwira said the farmers are growing different improved varieties of legumes mainly groundnuts across the country.
He also said his Company is working with the Department of Research in the Ministry of Agriculture to develop a new high yielding groundnut variety called CG-15.
“We always assure farmers that the only way for them to benefit from their activities is the use of hybrid seeds,” he said.
FURAHA Seed Managing Director Lucy Kanyowile and Felix Jumbe Director for Peacock seeds also admitted in separate interviews that the only reliable way for farmers to benefit from their activities is being cautious on the types of seeds they use.
Jumbe said the country would be food secure if all the farmers were to adopt modern seed varieties which are high yielding if compared with the indigenous varieties.
Seed Tech Chairman Eric Phiri said his company is also conducting campaigns to lobby farmers in the country to embrace improved seed varieties.
But farmers interviewed at random urged the seed producers to consider plight of the local farmer when setting prices for their seeds in order for them to stop planting recycled seeds which have a negative impact on the quantity and quality of yields.
To address the challenge of using poor quality seeds, the Southern African Development Community (SADC) harmonized seed regulatory systems.