Mining & Trade News

Barely two weeks after the Indigenous Business Persons Association of Malawi (IBAM) called on the State to support Small and Medium Enterprises (SMEs) affected by Covid-19, Minister of Industries Roy Kachale says government is monitoring the situation and geared to offer different rescue interventions.

In the wake of a steady drop in the number of Covid-19 positive cases, IBAM challenged government to inject stimulus financial packages to resuscitate struggling businesses that have the capacity to meaningfully contribute to the national economy once the pandemic is gone.

 “We cannot specifically point at one area in the industry that has been negatively affected by the pandemic, but for sure SMEs have suffered a lot,” Kachale said.

He pointed out that access to finance and markets are major solutions towards the challenge being faced by the SMEs.

“Government is working hand in hand with development partners to bail out the country from the siege,” he said explaining that developing partners are willing to finance the survival of the country’s SMEs.

 “Since the future looks brighter and that there is interest to support the industry, we need strict measures to ensure that the money is used for its intended purposes,” he said.

The Indigenous Business Persons Association of Malawi (IBAM) says it is optimistic that business prospects will pick up in the wake of the slow-down in number of people testing positive for coronavirus (Covid-19) pandemic in the country.

The Covid-19 pandemic depressed Malawi’s economy as businesses slowed, productivity was reduced, and companies downsized and closed operations while tax revenue decreased.

Malawi’s economy is dominated by the informal sector characterized by small and medium businesses which account for 89 per cent of the country’s labour force.

IBAM president, Mike Mlombwa, says when the pandemic broke out in the country, small and medium enterprises (SMEs) panicked and were forced to borrow money and obtain goods and services on loan to sustain their operations.

Following the declaration of a State of Disaster on March 20, government announced Covid -19 preventive measures which included suspension and reduction of some social and economic activities as well as regulating access to public places, buildings and structures including business premises.

“We now have seen that Covid-19 cases are dropping and we have higher expectations to see our members bailed out from financial hiccups,” Mlombwa says in anticipation that government will put in place measures to cushion and spur small indigenous businesses from the effects of the pandemic.

At the peak of the pandemic, the Monetary Policy Committee of the Reserve Bank of Malawi (RBM) released a K12 billion stimulus package through the commercial banks to support private sector businesses hard hit by the pandemic.

Commercial banks and Micro-Finance Institutions were also directed to observe a three-month moratorium on interest and principal repayments on all loans contracted by micro, small and medium enterprises.

Following the launch of a national cleanup campaign by President Lazarus McCarthy Chakwera, the Ministry of Energy plans to boost energy production in the country by promoting recycling of wastes into various forms of energy.

The energy ministry says the launch will help put in place waste management systems that support use of biomass for household and industrial productions.

Spokesperson for the Ministry, Saidi Banda, says the ministry is in the process of reviewing its Strategic Plan to reflect new developments in line with the Energy Policy 2018 and the Malawi Renewable Energy Strategy 2017.

“The ministry will facilitate processes to remove taxes on waste-to-energy production equipment. It will also facilitate trainings for small entrepreneurs and youth groups among others,” he explains adding that the initiative gives Malawians an opportunity to convert garbage from landfills into raw material for renewable energy like biogas, electricity and briquettes.

Banda says the ministry is currently encouraging companies to start generating power from waste in an effort to reduce the amount of waste the country produces.

A UN report reveals that one-third of the food produced world-wide every year is lost or wasted. In Malawi, it is reported that fresh food waste is a major health and urban management problem, especially in open-air markets which produce a great deal of waste.

Meanwhile, as the U.N.’s 2030 Agenda for Sustainable Development has set targets to reduce the amount of food waste by half, Blantyre City Council transports organic wastes like over-ripe tomatoes, banana peels and cabbage leaves which are generated each day from the city’s open markets to turn it into organic compost which is later sold to farmers and gardeners.

President Chakwera introduced the National Cleanup Day campaign with an aim of curbing littering and to promoting cleanliness and safe environments.

Persistent power blackouts due to Malawi’s insufficient electricity supply, has compelled government to diversify energy sources from hydro-power to include solar, wind energy, coal fired energy sources and the power interconnection to the Southern African Power Pool (SAPP).

Currently, Malawi generates about 250MW of hydro power while the suppressed demand is 351MW. The unmet electricity need does not account for the majority of Malawians who are not yet connected to the electricity grid.

53 per cent of Malawi’s population live below the poverty line and just 10 percent of the country is connected to the national grid with heavy load shedding schedules.

Intermittent power supply has significantly reduced the country’s industrial production rate.

According to Saidi Banda, spokesperson for the Ministry of Energy, several companies are set to start complimenting the hydro power supply by producing and supplying solar energy across the country.

“JCM is currently planting equipment in Salima and will serve the country with almost 70 megawatts of solar energy,” says Banda adding that another company is setting up operations in Nkhotakota while others who have also signed power purchase agreements with government will be rolling out in other areas soon.

Meanwhile, EGENCO, a body assigned to be producing electricity in the country, has recently switched on solar energy to power Likoma and Chizumulu Islands on Lake Malawi.

According to the 2019 World Bank report, Malawi has abundant untapped solar potential, with an average of 3,000 hours of sunshine per year.

Government has confirmed that criminal locomotives attacks have contributed to low usage of the Nacala Corridor, a railway line that transfers goods between Malawi and Mozambique’s Indian Ocean Nacala Port opening access to regional and international markets.

Andrew Nthiko, spokesperson for Ministry of Transport and Public Works admits that despite rail transport being cheap and the Nacala Corridor being revamped, traders prefer using the Beira Port that has no rail route to import goods into Malawi.

The spokesperson says government has devised strategies to ensure safe and secure movements of people and goods on the Nacala rail route.

“We have introduced a toll-free line – 1718 – where any type of vandalism and theft can be reported to relevant authorizes,” Nthiko said.

He adds that government and the Central East Africa Railway (CEAR) has also identified hotspots of theft along the rail and placed cameras for easy tracing.

In a bid to facilitate continued use of the Beira Port, Nthiko says that the Malawi and Mozambique governments have agreed to extend the Limbe-Makhanga-Mutara railway line to the Sena line.

 “CFM of Mozambique has already secured funds to construct their 45 Kilometer line from Mutara. On the other hand, we have tendered for rehabilitation works for reconstruction of line from Marka to Bangula,” he says.

Nthiko further says that with the rehabilitation of the Nacala Corridor, government is optimistic that importers and exporters will start prioritizing rail transport when transferring goods.

“We hope to see people change their attitudes towards this mode of transport,” he explains.

Malawi is a landlocked country. As such, improving regional transport network is a necessary condition for both the country’s competitiveness as well as for improved regional and global economic integration.

Small and Medium Enterprise Development Institute (SMEDI) has advised young entrepreneurs to venture into business partnerships as one way of dealing with challenges facing their businesses.

Speaking during 265 Pitch event in Lilongwe, CEO for SMEDI Rodrick Chattaika said young entrepreneurs in the country are facing challenges including lack of financial support and technical skills, which can be addressed through partnerships.

Chattaika said: “We want to encourage the entrepreneurs to rely on partnerships because one might have feasible ideas and another one resources. If these two merge, they can improve their image amongst themselves and therefore excel in their businesses.”

He said on its part, from the year 2018 to 2020 SMEDI has been working in partnerships with other stakeholders including National Bank, NBS Bank, Malawi Enterprise Development Fund, Synergy and other development banks.

Chattaika said through the partnerships, SMEDI is able to access services that entrepreneurs are lacking as well as giving the banks an opportunity of meeting upcoming business gurus.

SMEDI supported 265 Pitch event as one of its programs that gives courage to young entrepreneurs to showcase their ideas, and gain support from financial institutions.

Chattaika said the event also helps instill entrepreneurship spirit in people who get motivated by fellow entrepreneurs.

“As you know many youths in the country, even if they have the potential to innovate, are the ones who are highly affected in terms unemployment. So if we can harness their skills we can create more entrepreneurs in the country who will substantially contribute to country’s economy,” he said.

In her remarks, Deputy Minister of Labour Vera Kantukule concurred with SMEDI on the issue saying for someone to succeed in business, a partner is required.

Kantukule said: “We have people who are good at marketing while others at production. They have to come together to create a successful business entity.”

“If you look at western culture, a lot of enterprises are working as partnerships and are exceling on the market.”

She, however, said she is impressed with the growing number of young entrepreneurs in the country saying the development will help to reduce the unemployment rate which is growing at an alarming rate.

In the October 2020 265 Pitch, Mtengo Wakumunda company specialized in production of porridge flour emerged as the winner, seconded by Adamant Furniture with Adas Season Farms coming on the third position.

SMEDI is a parastatal under the Ministry of Trade, and was established in 2013 with three departments of business information and training; planning and research; and finance and administration.

Malawi’s rail operator Central East African Railways (CEAR) says it is making substantial progress in the the rehabilitation exercise for the Limbe-Makhanga railway line that was damaged by devastating floods in 2015.

CEAR Spokesperson Chisomo Mwamadi said in an interview that contractors who are working on re-installing the railways have completed 50% of the works.

Mwamadi explained that Limbe-Luchenza stretch of the railway is expected to be finished by April 2021.

He said CEAR has planned to rehabilitate a 72 km rail stretch from Limbe to Sandama while the rest of the line will be rehabilitated by the government.

Mwamadi said the Limbe-Luchenza rail rehabilitation exercise was divided into two phases with Phase 1 covering Limbe to Nansadi segment now 75% completed and Phase 2 covering the Nansadi-Luchenza stretch which is at 50%.

The works underway involve placing of ballast, replacing of bridge wooden sleepers, temping and bridge works at Nansadi.

Other works will include earthworks, installation of rails and track assembly.

Mwamadi, however, bemoans the impact of the coronavirus (Covid-19) pandemic saying it resulted in a five-month suspension of the works which has weighed in on the scheduled completion period.

He, nonetheless, said that CEAR has put in place strategies to speed up the rehabilitation exercise which will open up business in areas along the railway, which is a cheaper mode of transport compared to road transport currently widely used in Malawi.

Malawi’s President Lazarus Chakwera says his administration is committed to resuscitate the tourism sector currently on death bed due to the impact of the novel coronavirus (Covid-19) pandemic.

Chakwera said this when he officially  launched the Sogecoa Golden Peacock Hotel in Blantyre which has over 160 rooms, two restaurants, a shopping mall, a casino and conference rooms.

Sogecoa has invested an estimated K44 billion in the facility which covers an area of 1.6 hectares, with a total floor area of 22,000 square meters.

Chakwera said his administration will endeavor as much as possible to create an enabling environment for the tourism sector which has a strategic role to play in poverty eradication.

He said: “The facility will help in promoting local tourism industry, which is a critical driver of economy in the new Malawi which is currently taking its course.”

“My administration is fully committed in revamping the sector as it is resurrecting from shocks of Covid-19 pandemic, through fiscal stimulus packages.”

He explained that his administration will administer investment incentives packages that are comprehensive and accessible to both local and foreign investors to facilitate growth of the industry.

“We cannot run away from the fact that this sector caters for others such as Agriculture, Technology and Finance hence it is vital that we take good care of it for our own economic recovery and advancements,” he said.

He advised the Ministry of Tourism to conduct feasibility studies that will see development of new tourist cities in Mangochi, Salima, Karonga and Nkhatabay.

Minister of Tourism and Culture Michael Usi described the sector as an integral pillar for Malawi’s development as it offers 6.3% employment opportunities at present and it also contributes 6.7% to the country’s gross domestic product (GDP)

“Tourism is catalyst to unearth business opportunities for other sectors such as Agriculture. However due to the Covid-19 pandemic, a lot of jobs have been lost but as the pandemic situation is improving, the sector will also be revived”.

MD for the hotel group Mike Xhang said the launch of the facility is a milestone to local tourism business and job creation as over 1 thousand jobs were secured during construction works alone.

“We are in the process of developing Africa’s tourism sector, and this is one of the finest hotels in Malawi. This is the 16th hotel we have so far built in Africa with some in Madagascar, Mozambique and Zambia.”

Xhang said as Sogecoa they are committed to come up with creative and innovative solutions for developing economies.

Deputy Ambassador of Peoples Republic of China to Malawi Wang Shung Shen lauded the investment describing it as one of the major projects that Chinese investors have executed in Malawi in the recent years.

Shen said China is determined to do more in developing the Malawi economy owing to the mutual relationship existing between the two countries.

“As we are yearning for better bilateral trade, I believe more Chinese investors will come to Malawi to explore various sectors such as Agriculture and Technology to invest in.”