Mining & Trade News

My Bucks Banking Corporation says Malawi’s macroeconomic outlook is expected to remain stable for the most part of the 2021 fiscal year.

In a summary of unaudited interim financial results for the six months ended June 30, 2021signed by Chairman Francis Pelekamoyo, the banking group explains that the growth path for 2021 rests much on what happens in the remaining months as the country continues to be challenged with the increasing cases of Covid-19 and low vaccinations roll out rates.

It reads: “Notwithstanding the challenges, the monetary authorities are currently projecting inflation to average 8.4% for 2021.’’

‘’As a group, we will remain upbeat and committed to offer a consistent and relevant customer experience so that we can achieve excellent customer experience.’’

The statement says the Bank has embarked on a journey to be a truly digital bank by offering enhanced digital platforms that will make customers satisfied.

It says that with the digital platforms come cost reductions and ease of doing business, while passing on the benefits to its customers.

In the year, the group will also focus on the rationalization of its cost base; the effective and the prudent management of risks and a liquidity; and the diversification of its balance sheet, balanced with the efficient portfolio allocations, which will also effectively result in the maintenance of a robust capital position.

The Bank has recorded a profit after tax of MK0.39 billion for the six months ended June 30, 2021, compared to MK1.8 billion for the six months period to June 2020.

The main driver of the reduction in year on year profit after tax is the exclusion of Nedbank Malawi acquisition gains from non- interest income in 2021, as this was a once off the event in 2020.

There was also a slow growth on all lines of revenue due to the impact of Covid-19 on the business of the bank.

“The bank has not yet fully realized the synergistic gains from the Nedbank Malawi acquisition, mainly due to the challenging business environment amidst the Covid-19 impact on the economy,” reads the statement.

Marketing firm, Marketing Minds, has stressed the need for market research and adequate financial backing in igniting successful business ventures in the country.

Widdey Nsoma, the firm’s Director of Marketing and Sales highlighted this in an interview with the Mining and Trade Review ahead of a brand management session targeting marketing professionals, small and medium enterprises (SMEs) and sales professionals slated for September 11.

Nsona observed that most start-ups enter the market without researching their market, a development that compromises product quality and packaging and in return affect business growth.

“Start-ups experience difficulties to access finance and access markets because of lack of research to understand their markets,” he said adding “After a good market research it is advisable to have a business plan and a brand positioning strategy.”

During the seminar, Marketing Minds will orient attendees on brand image and equity, brand identity and value, brand audit and strategy development, brand positioning, brand crisis management and personal branding among other things.

He said: “The attendees will benefit because they will be able to use this knowledge to make their brands more vibrant and marketable. They will be able to add value to their brands. As individuals, they will also learn personal branding which will make them more marketable in the job market,” he said.

“Brand marketing is very crucial to start-ups because, how customers perceive your brands from launch or inception determines the longevity and profitability of the brand.”

Established in 2018, Marketing Minds is a consultancy firm that offers extensive range of services to catalyse business growth including strategic planning, social media management and brand Management.

Malawi’s Department of Marine Services in the Ministry of Transport and Public Works has revealed plans to improve the operations of water transport networks which have lost value amid continued demand for their services.

Director for the Department Captain John Mhango says in an interview the government and stakeholders are geared to restore the once vibrant transport system by among other things strategizing on improving jetties.

Additionally, the director notes the importance of also improving on the systems accompanying businesses such as ensuring good hospitality services both on the mainland and on the islands in order to build the travelling public’s confidence.

Mhango observes that the state of lodges along the water transport system is very poor and has contributed to the decline of traveling patronage since people are not comfortable to travel to places without resting places.

 “We also want to ensure that the boats that ply their trade on our water bodies are of high standards,” says Captain Mhango who added that the Covid-19 pandemic has also worsened the situation.

“Currently, water transport is facing a lot of challenges including Covid-19. The people who used to travel between the Islands and the mainland to buy goods for business no longer do so while the traffic of tourism in the country has also declined,” he says.

But Captain Mhango says once the department’s plans are operationalized water transport will claim back its glory from the now robust road transport services.

Cargo movement by water is much cheaper than it is by road.

In March 2019, the Malawi government launched a Likoma Jetty construction exercise at the Mbuzi Hill side on Likoma Island with full hope that it would elevate economic activities and liberate transport logistics.

Recently, the Deputy Minister of Transport and Public Works Nancy Chaola Mdooko revealed government plans to rehabilitate water and rail transport infrastructure.

Malawi’s private sector needs to exploit the forthcoming 2nd Intra-African Trade Fair (IAFT) which seeks to rationalize inaccessibility of trade opportunities and market information across the continent.

This was observed on Monday, September 20,2021 during IAFT 2021 –Road show conference held at Amaryllis Hotel in Blantyre in preparation for the fair scheduled for November 15 to 21 2021 in Durban, South Africa

Minister of Trade Sosten Gwengwe, who was the guest of honour at the Show, told Mining & Trade Review that industry players should embrace numerous expos the ministry is currently convening in order to scale up trade volumes and increase investment opportunities across multiple platforms.

Gwengwe explained: “One of the key challenges in as far as trade and investment is concerned is financing because we have a lot of private sector entities that really wish to venture or expand their export trade but they are failing to peak due to fiscal constraints.”

“And today we are happy that AfreximBank has shown commitment towards supporting our private sector through various initiatives including conducting the 2nd IAFT preparatory roadshow in Malawi, and I understand some of the delegates will still remain in the country for some days where they are to have bilateral talks with local banking players.”

During the roadshow, it was also highlighted that the 2021 fair is to generate approximate of $40-billion in trade and investment deals involving 55 countries and over 5-thousand conference participants are poised to attend with over 1,100 exhibitors, and 10,000 visitors and buyers.

Promoted by Africa Export-Import Bank (AfreximBank) in collaboration with African Union as well as Africa Continental Free-trade Area (AfCFA), the fair is convened every two years to offer trade and market information, and to provide market linkages between buyers and sellers from across the continent.

Chief Operations Officer for Southern Africa AfreximBank Humphrey Nwogu explained that IATF is an ideal event to enhance trade in Africa as it brings together more professionals under one roof.

Nwogu explained; “In 2021, IATF’s theme will focus on the newly-launched AfCFTA – a single market for goods and services across 55 countries, aimed at boosting trade and investment, IATF Virtual will enable showcasing of goods, services and investment opportunities on an interactive online platform and the IATF Virtual will continue even after the Trade Fair has concluded.”

“As a bank, we realized that the major challenge that exists on the continent is market information on trade opportunities existing in other countries, so we thought this is a good avenue for countries to come together to showcase and identify potential opportunities available in respective countries.”

 “We are to convene business to business meetings, government to business meetings, and government to government meetings such that all deliberation will yearn to level trading field for equal trade opportunities.”

Nwogu also emphasized that AfCFTA is an ideal remedy for continental economic recovery due to tradeoffs and other incentives brought by the arrangement.

He said: “Looking at the fact that most countries are recovering from knock-on effects of novel coronavirus (Covid-19) pandemic, AfCFTA is an ideal remedy for post Covid-19 economic development plan across the continent as it promotes trading within the continent and projections are positive,” he said.

“Free trade area arrangement is ideal to benefit all, to cushion countries that may be in deficit during AfCFTA arrangement, AfrixemBank has set up $1 billion Adjustment facility which will enable disadvantaged countries to stabilize in early stages.”

Reserve Bank of Malawi (RBM) Governor, Dr. Wilson Banda, also said podiums such as IAFTA are ideal to strategically position the country for more investment and trading opportunities, but he further urged business entities to advance on quality of produce to attain bargaining ‘power to compete at continental level

“As a country, we are looking at improving trade and such meetings are essential in addressing trade issues. We expect the country to benefit at continental level, but to compete on continental level as government we have been lobbying with private sector to zeal much on quality improvement seconded by quantity, through investing in innovation and modern industrial technologies.”

Group MD for Nico Holdings who is also co-chairman of Public Private Dialogue forum Vizenge  Kumwenda concurred with Banda’s sentiments saying local traders should invest more in innovative ideas to be at par with foreign counter-parts on the continent.

“Private sector players should operate beyond local market, as we can no longer trade in isolation, we have to be aggressive enough and embrace the continental community through identifying investment opportunities in foreign countries to expand our boundaries.”

Currently, intra-African trade is only 16% of total African trade

Standard Bank Malawi says the coronavirus (Covid-19|) pandemic and foreign exchange supply shortages are giving unnecessary pressure on Malawi’s currency, the Kwacha..

In summary results statement for the six months ended June 30, 202 signed by CEO Phillip Madinga, the Bank observes that the Kwacha continued to weaken against major currencies in the first half of the year on account of foreign currency supply shortages.   

“Foreign currency supply constraints will likely continue to exert pressure on the Kwacha. Inflation rate is therefore, being expected to remain elevated due to pressure on non- food inflation rate drivers since the recurring COVID-19 waves will likely going to have adverse impact on the economic performance,” reads the statement.

It, however, states that in the first half of the year, the group showed resilience in operating in the challenging environment.

The Bank’s total assets grew by 30% year on year due to the growth in loans and advances to customers and banks which grew by 25% and 80% respectively.

“The loan book growth resulted in a corresponding increase in interest income which also grew by 27% year on year while the growth in customer deposits of 29% year on year was a result of the group’s focus on growing its funding base which in turn supported its lending drive.’’

The Bank also registered strong growth on non-interest revenue which grew by 43% year on year.

It states that due to Covid-19 impact, customers were deeply affected to the extent that they failed to service loans.

The Bank’s profit after tax for the first half of the year was down by 8% year on year.

CDH Investment Bank says it is upbeat that the country’s business environment will improve due to government’s provision of the vaccine for the coronavirus (Covid-19) pandemic, moderate improvement in foreign exchange availability and containment of other economic pressures on inflation.

In a summary of financial results for the six months ended 30th June signed by the CEO and MD Ngando Moukala, CDH laments that Covid-19 and foreign exchange shortages have slowed down economic activities.

It, however, says despite a challenging environment, the bank remained resilient in the first half of 2021 and will continue to provide novel solutions to its esteemed clientele.

Reads the statement: “It is expected that the bank’s growth momentum will continue in the second half of the year as the operating environment continues to improve with the roll out of Covid-19 vaccination programme, a moderate improvement in the forex availability, and containment of other economic pressures on inflation.”

“The business will leverage on the positive business outcomes experienced during the period under review. Capital optimization, cost discipline, compliance and risk management remain the pillars for the sound financial performance.”

The bank realized a profit after tax of K2, 8991 million against prior year performance of K927 million representing an increase of 212%.

The operating income before impairments on loans and advances grew from K5,012 million to K5,919 million mainly on account of growth in net interest income and non-interest income by 18%.

The total assets increased by 54% from K109,051 million to K167,916 million mainly due to increase in customer deposits by 48% and the investment funds by the 69% as the bank continues to propel innovate financial solutions for its clients.

“The bank continued to leverage on the benefits of integrating investment banking solutions and traditional commercial banking services to drive performance,” reads the statement.

Mangochi based Sun and Sand Hotels says it is hoping for business revival with Malawi hosting the Southern Africa Development Community (SADC) head of states summit and scaling up its immunization programme against the novel coronavirus (Covid-19) pandemic.

Human Resources Manager for the hotel group Martin Juma told Mining and Trade Review that business has been bad for the group and other tourism players due to containment measures that countries put in place to fight Covid-19 such as boarder closures.

Juma, however, was optimistic that business will pick up with the country’s hosting of the summit which will result in an increased number of visitors.

He said; “We are more than prepared to host these delegates as they are to spend their two weekends in the country and as Sun and Sand we have prepared all our conference rooms and diverse lucrative amenities ahead of this summit. We are more than ready to host any sort of meetings in our facilities.”

“We have a swimming pool with all sort niceties to suite everyone, we have also come up with special menus for the delegates of which everyone’s favorite Chambo fish is inclusive.”

He also said the hotel is ready with boats to take guests on game viewing safari to explore Lake Malawi National Park and view other places of interest including Cape MaClear.

Juma also assured guests visiting their resorts of sufficient protection from Covid-19 saying they are following all protection measures as advised by the Ministry of Health.

“We have disinfection chambers and temperature checks right from gate entrance, and everyone entering or leaving our facilities is mandated to abide by these measures,” he said

Malawi is hosting the 41st SADC Summit from August 9 to August 19, 2021 that will see state President, Dr. Lazarus Chakwera taking over leadership from Mozambique’s President, Filipe Nyusi.

The Ministry of Tourism, Arts and Culture says it will use the forth coming Southern Africa Development Community (SADC) summit to expose Malawi’s tourism attraction sites and activities.

Tourism Minister Michael Usi revealed this in an interview saying this is an opportunity for the country to market its tourism industry.

Usi said his Ministry is currently drafting a plan on how to engage local players in the sector to take advantage of the summit, slated for this August.

“We are in the process of finalizing the program where specific products have been arranged to be showcased to summit participants,” he said adding that the Ministry is also engaging stakeholders from other countries to establish relationships beyond the summit.

Gule Wamkulu and other traditional dances have been lined up to entertain the coming Heads of States and delegates. The beauty of Lake Malawi will also be highlighted to attract the visitors. Malawi will host the 41st SADC Summit from August 9 to August 19, 2021 that will see state President, Dr. Lazarus Chakwera taking over leadership from Mozambique’s President, Filipe Nyusi.

A capacity building workshop for media and civil society organisations (CSOs) held in Blantyre on Thursday has described existence of robust and knowledgeable media and CSOs as vital in ensuring transparency and accountability in public procurement procedures.

Speaking during the event, Public Procurement and Disposal of Assets Authority (PPDA) Board Chairperson Joel Suzi Banda said that it is important that the media, as the fourth arm of government, and CSOs understand the role PPDA plays in regulating public procurement processes.

According to Banda, there is a huge information gap on the role of the PPDA which needs to be filled for the general populous to have a better understanding on procurement systems.

He said the two stakeholders have to be equipped with the relevant knowledge and understanding of the rules governing various officials whose work falls under the Public Finance and Management Act under which the PPDA also falls.

“Public procurement is decentralized and there are various players that are involved in the process so it is crucial for the media to understand so that they can be able to disseminate appropriate information to the masses,” Banda said.

Meanwhile, the Authority is set to roll out diverse projects aimed at curbing corruption in procurement procedures including Open Contracting, Tip-Offs Anonymous line and E-government procurement.

In his remarks Pemphero Musowa a journalist working with Kulinji.com described the workshop as a success having acquired deeper understanding on the country’s procurement systems which he says will enable him to engage relevant authorities on diverse issues relating to public procurement.

Musowa said: “This training is important as it gives me insight into how things work and basically gives me understanding on how to approach and report on issues to do with procurement.