Mining & Trade News

Tobacco Association of Malawi (TAMA) says there is still hope for the tobacco industry as demand for the local leaf is high despite a slump in global economy due to the novel coronavirus (Covid-19) pandemic.

“Demand for Malawi tobacco is still there, all we need is promoting growing using recommended agricultural practices that also include recommended labour practices. Agricultural Extension advisors from different players in the industry are working together to ensure these messages reach the farmer and are adhered to,” said Kalimba.

He, however, said the local tobacco industry has not been spared from Covid-19 which has affected most economic sectors.

Kalimba said in a bid to minimize challenges the industry is currently facing due to Covid-19, TAMA has put in place some initiatives aimed at protecting producers of the country’s prime revenue earner.

He said labour in the tobacco sector is one of the areas that have been affected this season, as farmers are advised to reduce their labour force to decongest their farms as a way of preventing transmissions, which the TAMA spokesperson said is a threat to the industry that requires more people to produce quality leaf.

TAMA in conjunction with the Ministry of Health is currently conducting sensitization meetings with farmers who are advised to follow all preventative measures government set in the fight against the respiratory infection.

“The impact of Covid-19 has not spared any sector including tobacco production. Labour is one of the factors impacted as efforts to have work places decongested are being enforced and there is also labour scarcity where communities have been hit. TAMA is advising farmers to follow government’s set preventative measures so that farm operations do not stall,” explained Kalimba.

Meanwhile, TAMA has suspended this year’s Growers Meeting which is held in February every year, as enshrined in TAMA’s constitution as a prevention measure against the spread of Covid-19.

TAMA in collaboration with Ministries of Health and Agriculture has developed Covid-19 messages which are being distributed to farmers, advising them on how they can help in the fight against the pandemic. The messages are in languages used by targeted farming communities for them to easily understand.

Besides Covid-19, low tobacco prices and World Health Organization’s (WHO) championed anti-smoking lobby are some challenges affecting the tobacco industry which remains Malawi’s top foreign exchange earner.

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Malawi’s multi-million dollar Agricultural Commercialization Project (AGCOM) is on course leveraging local agriculture through the promotion of agricultural value chain products.

Using an approach known as the Productive Alliance (PA), the US$95 million World Bank credit facility project links together producers, service providers and off-takers in different value chains.

AGCOM National Coordinator Dr. Teddie Nakhumwa said the project’s development objective is to increase commercialization and competitiveness of agricultural value chain products in crops, livestock and fisheries.

Dr. Nakhumwa explained that the project was developed to respond to some of critical problems facing the small and medium scale farmers such as poor access to organized markets, poorly organized farmers and farmer groups, poor access to competitively priced finance and poor market infrastructure.

AGCOM provides 70% matching grants for the purchase of capital equipment and also insures that farmers lend from commercial banks to finance operations by guaranteeing 70% of their loans. The project also provides public infrastructure through connecting producer organisations to power, irrigation and road infrastructure—in what is known as Last Mile Infrastructure.

“These interventions are aimed at transforming agriculture by increasing productivity and efficiency in scarce land and labour use,” said Dr. Nankhumwa adding that AGCOM also invests in capacity development and organizing producer organisations into cooperatives to operate at economies of scale.

The project only supports producer organization that have formal arrangements with off-takers to ensure they are producing for the market and therefore promoting business culture among small and medium scale farmers that do the bulk of the country’s production.

Dr Nankhumwa highlighted that the project has, meanwhile, made significant progress in putting the system and establishing all strategic documents to guide implementation such as: AGCOM matching grants manual, Risk management manual, Partial credit guarantee (PCG) manual, M&E Manual, Communication manual, Institutional and organisational development guidelines.

“To promote independence and transparency, the project established independent committees such as Independent Evaluation Committee (IEC) and Investment Committee to independently evaluate proposals submitted to AGCOM for matching grants and Patrial Credit Guarantee. These committees comprise members mainly from the private sector and a few from the public sector,” he said.

The project has also a Contingent Emergency Response Component, which can be triggered by Government to respond to natural disasters.  During the 2019 Cylone Idai flood disaster, the project provided US$20 million (US$7-million for maize purchase; US$7.5 million for rehabilitation of public irrigation schemes) among others, after government requested AGCOM for assistance.

Meanwhile, AGCOM has so far managed to approve 45 PAs, out of which, 25 have already paid the required 30 percent contribution and are already accessing funds from AGCOM for implementation of the sub-projects. Over 400 hectares of land for local and foreign investments have been identified to secure an enabling business environment for PAs

Nakhumwa, however, pointed that the project has also encountered numerous constraints such as optimal commitment for PAs to make the 30% contribution and aftermaths of Covid-19 pandemic that has delayed in delivering some strategic capacity building trainings.

Malawi’s Ministry of Energy says it is making progress in preparations for recruitment of energy officers in all the country’s districts.

The officers will, among other things, be responsible for presiding over energy related activities at district level including the Malawi Rural Electrification Program (MAREP).

Spokesperson in the Ministry of Energy Saidi Banda has told us that so far the Ministry of Energy has put together concept notes for the implementation of the initiative.

“The concept note contains the roles that District Energy officers are expected to perform in the districts, the initiatives Budget, and roadmap of activities to be carried out in implementing this initiative, among other things,” Banda said.

According to Banda, currently the Ministry is engaging Ministry of Local Government and Rural Development and other stakeholders to agree on how this initiative will be implemented.

The Ministry has therefore assured the general public that everything will fully be implemented by the end of 2021/2022 financial year.

“Since the implementation of this initiative is a huge process, the Ministry is hopeful that the implementation of this initiative will be completed in all districts within the 2021/2022 financial year which also covers the period that our Minister indicated,” he said.

According to the Ministry, individuals who will be qualified as Energy Officers are those that hold at least a Bachelors Degree in Renewable Energy or related fields, coupled with extension work skills.

Meanwhile, Banda has disclosed that their Ministry is struggling to discharge its duties due to the complications resulting from Covid-19.

The Malawi Government has urged tobacco growers to improve their farming practices if the industry is to reclaim its lost glory.

Minister of Agriculture, Lobin Lowe, made the call during TAMA’s 33rd Annual Congress held in Lilongwe under the theme “Adherence to Agricultural Labour Practices in the Wake of Withhold Release Order.’’

The minister expressed government’s commitment to ensuring that local farmers continue benefiting from their work.

He disclosed that his ministry has engaged the Tobacco Commission and other relevant stakeholders to strategise on best ways that can assist in promoting the sector. He said the strategies will be consolidated and developed into notices for parliament to enact into laws that will benefit tobacco farmers.

The minister further revealed that while his ministry is working at identifying an alternative crop to replace tobacco as the country’s major foreign exchange earner, efforts are also underway with other relevant government departments and agencies to come up with laws preventing illegal tobacco exports, a practice that has greatly affected crop’s local earnings.

TAMA president, Abiel Kalima Banda, described the meeting as a success and an eye opener to tobacco farmers considering that the crop is experiencing global challenges. He assured the farmers that it is TAMA’s responsibility to end woes affecting the once upon a time vibrant sector.

Commenting on 2021 tobacco selling season, the TAMA leader said he was satisfied that the year saw reduced rejection rates and increased prices offered to the farmers for their leaf.

Reports indicated that the reduction in the rejection rate from all the Auction Floors in the county was mostly attributed to high sensitization of farmers on Non-Tobacco Related Materials (NTRM) which affect yield quality and its market pricing.

The Parliamentary Committee on Natural Resources and Climate Change has accused the Ministry of Forestry and Natural Resources and; Lilongwe Water Board (LWB) of not being open on their position on Salima-Lilongwe water project.

Over three years have elapsed since the Government and the awarded contractor Khato Civils started negotiations over the project amidst various controversies.

Chairperson for the Committee Werani Chilenga made the accusation when the committee engaged the Ministry of Forestry and Natural Resources; LWB; Ministry of Finance and; Khato Civils to hear the progress of the project.

Chilenga said the committee suspects that the Ministry and LWB are not being open on the project because their interest is not on the multimillion-dollar project but rather the Diamphwe Water Project.

He said: “As a committee we are recommending that due to scarcity of water in Lilongwe, the project is the best for the city.”

“We are failing to manage the Dzalanyama Forest Reserve. Both Diamphwe and Lilongwe Rivers are coming from Dzalanyama.”

“At the rate deforestation is taking place now, we can do Diamphwe but just few years later we will go back to Lilongwe-Salima project which by then will be too costly.”

Meanwhile, there is fresh controversy on the project as in the original design, Khato proposed the use of ductile iron pipes but following recommendation by the Government to consider reducing the price for the project, the contractor has proposed mild steel pipes which the government is not satisfied with.

The change of the project material has reduced the cost of the project from a tune of $400-million to $315-million.

Mild steel pipe is made of rust corrosion measures while Ductile iron pipes are made of ductile cast iron commonly used for potable water transmission and distribution.

During the meeting, the Ministry of Forestry and Natural Resources admitted that it finished reviewing the technical side of the revised design for the project and handed over to Ministry of Finance for final recommendations.

Director of Economic Affairs in the Ministry of Finance who represented Secretary to the Treasury MacDonald Mwale said the Ministry has not yet started working on the project as they are still waiting for a final financial proposal.

Mwale said negotiations for the project are taking a long time following changing of type of pipes by Khato in the requested design.

“Of course we received the design from the Ministry of Forestry and Natural Resources and we are about to look into it later. We are currently waiting for Khato Civils to submit full financial proposal,” said Mwale.

Khato Civils Group Chief Executive Officer Mongesi Mnyani said firstly they opted for ductile iron pipe after considering factors of purchase, logistics, installation and maintenance. 

Mnyani said now the situation has changed following the reduced cost as the mild steel are cheaper than ductile iron.

He also said the outbreak of the novel coronavirus (Covid-19) pandemic has also influenced the change of the pipes considering that logistics to acquire ductile iron will not be easy as initially suggested.

“We understand that the Malawi Government still insists on ductile iron pipes not the mild steel we proposed. But the Government has to know that ductile iron pipes can still hike the cost back to over $400-million which will not satisfy them,” Mnyani said.

The Lilongwe-Salima water project is expected to pump water from Lake Malawi to Lilongwe City, a distance of 120 kilometers.

Government already spent $17-million on the project which will be pumping an estimated 50,000 cubic meters of raw water per day through a 50 centimeter diameter pipeline.

Khato Civils is owned by South African based Malawian business guru Simbi Phiri.

During the presentation of 2020/21 National Fiscal Budget, Finance Minister Felix Mlusu pegged expenditure for the project at K2.2 trillion.

Adventures with Colby (AwC) a local tourism-sector excursion firm specialized in promoting hiking, says tourism is an integral ingredient in uplifting Malawi’s economic status.

AwC founder and Director Colby Mughogho tells Mining and Trade Review that by attracting tourists from all over the world to visit different places in Malawi, the company contributes to generating revenue and boosting the country’s foreign exchange cover.

This year, AwC has lined up a number of activities including 4-peaks-challenge where participants are expected to conquer Michiru Mountain, Ndirande Mountain, Nthawila and Soche Hills in the commercial city of Blantyre.

“Anyone is welcome to join us on any of the mountains or better still on all of them,” he says.

Following his passion for adventure and tourism, which saw him engage in a 13-year-old career in wild camping, trekking, hiking and off-road cycling, Colby Mughogho founded Adventures with Colby in 2017.

Through the adventures, the firm has also been boarding on numerous life changing community projects such as the 2 wheels 2 schools project carried out in 2020 and many other programs under the Hike with Heart, which he also founded.

“The 2 wheels 2 schools project focuses on getting back less privileged secondary students back to school by assisting them with school fees, bags, bicycles for those who walk long distance to school as well as bicycle spare parts,” he explains.

Mughogho, however, laments that the novel coronavirus (Covid-19) pandemic has negatively impacted on their projects. He observes that some international clients continue to fail to travel to Malawi due to travel restrictions because of the pandemic.

“Covid-19 has negatively affected the tourism industry as a whole and our firm has not been spared. We are experiencing less clientele as some of our international clients have moved back to their homes hence we have started promoting local tourism,” he says.

In 2021, AwC plans to take its escapades to the northern region of Malawi having noted that the region has not experienced adequate tourism interventions and investments.

“People should expect great adventure trips up the northern region this year,” he says.

As the tree planting season is still underway, Minister of Energy Newton Kambala took part in a tree planting exercise at Chitukula Community Day Secondary School in Area 25, Lilongwe.

This year’s tree planting season runs from December 15, 2020 to April 15, 2021, according to Ministry of Forestry and Natural Resources.

Kambala said in an interview he is interested in tree regeneration understanding that trees play a major role in conservation of water which is the main source of energy in the country.

He said: “That is why I was interested to encourage people to plant trees. We have planned to plant about 500 trees today and this is the beginning. We want to be doing this every year.”

“We want to encourage people in the country to participate in planting trees as illustrated by our President that we need to replace trees lost through firewood and charcoal.”

The Minister urged the members of the community to take care of the trees and ensure that no trees are lost due to poor management.

“We have engaged the Senior Chief to lead his subjects in taking care of the trees,” he said.

Kambala also announced that his Ministry has organised a series of tree planting exercises in Kasungu District this month.

In his remarks, Senior Chief Chitukula hailed the Minister for leading in the tree planting exercise in the area saying this will encourage the people to take care of the trees.

 “These trees will help the entire community in various ways including as a source of firewood and also protect the school blocks and houses from heavy winds,” said Chitukula.

Malawi loses nearly 30,000 hectares of forests annually while average national soil loss rate hovers at around 29 tonnes per hectare each year mostly due to increasing forest degradation, according to the Ministry of Forestry and Natural Resources.

Players in Malawi’s mining sector have expressed mixed reactions over African Development Bank’s (AfDB) stand against coal fired power generation.

AfDB President Akinwunmi Adesina this week called for a stop in the use of coal power across the continent and recommended a switch to renewable energy sources.

Speaking during United Nations (UN) climate talks on Monday during the Climate Change Summit (CCS) in Manhattan, India, Adesina called for a halt in operations of coal fired power plants and said AfDB will support the building of the largest solar zone in the world in the Arid Sahel belt.

He said renewable energy is sustainable and has the potential to benefit future generations.

He said in 2020 AfDB rolled out a US$500 million green baseload scheme which will assist African countries to shift from coal and fossil fuel to renewable energy.

But Minerals, Geology, Environment and Corporate Affairs Consultant Grain Malunga said the development would not affect the local coal mining industry, which is dominated by the private investors.

“AfDB’s wish to stop the use of coal as energy source will not have any impact to Malawi considering that local coal mines are not government owned, but are owned by private investors whose incomes do not go into government purse,” said Malunga.

While admitting that the coal industry is among the main atmospheric pollutants, MD for Rukuru Coal Mine Bruno kloser said while considering an outright shift to renewable sources, Malawi will still need coal in its energy mix in the short to medium term to power industries.

“Malawi just like many developing countries will still need coal for some time, while investing in alternative forms of energy like solar and wind,” said Kloser.

Ministry of Mining spokesperson Sangwani Phri said AfDB’s ban on the use of coal as energy source which was imposed in 2013 to fight global warming is not bearing fruits since the Bank is failing to assist poor countries to successfully develop to middle income status through adequate investment in renewable sources of power such as wind and solar.

He, therefore, said it could be helpful if the Bank had adequately invested in the alternative sources before the ban was affected.

“There are roughly 1.6 million people in developing countries and about 7 million in Africa with the remaining 500 million in South Asia who are keenly looking for cheaper energy sources. Local restrictions on blocking companies from mining coal will be a big blow to them, as well as their economies,” said Phiri.

The Public Private Partnership Commission (PPPC) says Kenyan firm Webtribe will start construction of modern minibus parking terminals at Mibawa in Blantyre Central Business District and Limbe in April, 2021.

Acting Executive Director for PPPC Audrey Mwala said this at an inspection tour of the construction sites by the Commission and Webtribe officials.

Mwala said PPPC settled for the Kenyan company to execute the project and manage the facilities through a competitive bidding process.

“In October this year, we signed an agreement with the company to construct and manage the facilities for a period of 10 years in a Build, Operate and Transfer arrangement. We came up with the agreement because minibus parking sites in Blantyre are not in good shape, according to the standards of modern cities,” she said.

 Construction of the facilities will take almost 12 months and structures will include offices, shops, bathrooms, waiting bays for passengers and automated entry bars.

The PPP arrangement includes that the developer will be providing security to the facilities in the 10 year lease period.

In his remarks, Executive Director for Webtribe Danson Mucheni said the exercise is in-line with his company’s goals of digitalizing various operations which can be achieved through modern infrastructures.

He says they want to introduce an automated revenue system in transport sector for Blantyre City Council.

“We are planning to roll out implementation of this next year. We are 11 years old in digital payments and we have implemented this in several places including city of Nairobi so we are sure this will work here as well,” he said.

Chairperson for Mibawa Minibus Drivers and Conductors Evans Galasi expressed gratitude towards the initiative saying the digital ticketing system will simplify their operations and also the project will improve sanity at the site.

“We have people who are even afraid of visiting that area to board a minibus due to how the surrounding looks but we are quite sure that this initiative will address the challenge,” said Galasi.

The construction exercise is expected to cost US$2-million and after the 10 years, Webtribe will hand over ownership to Blantyre City Council.