Mining & Trade News

The Malawi Energy Regulatory Authority (MERA) says it has embarked on a campaign of promoting alternative sources of energy including Liquefied Petroleum Gas (LPG) and Biogas with an intention to scale up LPG usage in the country to 3% by 2023.

MERA Public Relations Officer Fitina Khonje told Mining & Trade Review that the regulatory body is promoting the alternative sources as they are tried and tested cleaner, convenient and environmentally friendly alternative sources of energy.

Khonje said the efforts are meant to discourage use of unsustainable and polluting sources of energy.

Khonje said: “We intend to stimulate LPG usage to 3% by 2023. We are noting growing interest in LPG and we know this target is achievable.

“When consumers appreciate and experience the positive attributes of gas and accessibility is enhanced, LPG will be an automatic choice just as it is in many countries.”

“MERA is not working in isolation on this drive. We are supporting the implementation of the Energy Policy and there is high government and other stakeholder interest to push up household and commercial usage of LPG.”

Khonje further said there is huge hope for the promotion of LPG to be successful following various efforts by both MERA and the government to ensure that LPG is affordable and accessible in the country.

She said apart from the introduction of zero rated value added tax on LPG since October 2019, MERA has reduced licence fees and technical regulations for LPG outlets.

According to Khonje, MERA believes that incentives being rendered to LPG operators can also be passed on to customers to encourage consumption.

Khonje said: “In addition to this, more operators in the LPG sector will push down prices through economies of scale and will lead to wider distribution networks and accessibility.”

“We have also relaxed licensing conditions in order to attract more players including gas importers and gas retailers.”

“We will be holding information sessions on Gas Retailing in few weeks’ time and we encourage those who are interested to register with MERA to attend.”

Khonje also disclosed that MERA is currently lobbying Government through the Ministry of Finance to consider removing duties and VAT on LPG accessories and appliances.

However, commenting on the safety handling and usage of gas, Khonje lamented safety risk perceptions to have contributed towards the low uptake of LPG in the country.

Khonje said MERA believes that increased consumer awareness coupled with regulatory monitoring and enforcement of standards will facilitate understanding and adoption of safe practices.

According to Khonje, MERA has a dedicated team to ensure LPG safety standards are being upheld.

She said MERA is also conducting routine inspections of all LPG outlets and that required corrections are followed up whereby LPG retailers are required to give safety trainings to first time users.

Khonje added that the regulatory body is also disseminating Information, Education and Communication (IEC) materials on safety and proper LPG usage.

Meanwhile, apart from the LPG and biogas, the regulator is receiving encouraging reports on the uptake of solar energy in the country.

Khonje however said, though the country’s adoption rate for solar energy is encouraging, there is still more to be done to create awareness on standards, encourage usage of MERA licensed installers and encourage increased usage at commercial and institutional level.

As part of their mandate, MERA is entitled to facilitate increased access to energy supplies; promotion of energy efficiency and energy savings; and promotion of consumer awareness and education on energy issues.

Hotel group Sunbird Tourism Plc has unveiled its plans to construct 15 room eco lodge at Majete Wildlife Reserve in Chikwawa.

The group says in its interim financial statement for the half year period ended June 30, 2021 that the project which is now at design stage, is scheduled to be completed next year.

In the statement co-signed by Chairman George Patridge and Director Vilipo Munthali, Sunbird explains that the project will help the Company revive its hospitality business which has greatly been affected by coronavirus (Covid-19) pandemic.

Say Petridge and Munthali: “Looking ahead to the rest of the year, the Covid-19 pandemic is still a major risk in the industry and continues to adversely affect the performance of hospitality business.”

“However, the board’s focus remains to continue building a resilient brand by improving service delivery and guest experience.”

“This is being achieved through product and infrastructure improvements and intensifying sales and marketing activities to ensure that the company maintains its market leadership in the hospitality industry.”

The Group expresses optimism that hospitality business will improve following Covid-19 vaccination campaign underway which is expected to bring desired confidence in resuming normal business and leisure travel as some countries are beginning to open up.

Meanwhile, the Malawi Government has relaxed some of the Covid-19 restrictions, which the Group says will bring positive impact on the economy of the country specifically the tourism industry.

Apart from the construction of eco lodge at Majete, Sunbird is implementing a number of key products improvements across the country.

These include construction of a new iconic 42-bedroom Sunbird Water Front Beach Resort adjacent to Sunbird Livingstonia Beach which was fully completed and; Vincent’s platinum a fine dining restaurant at Sunbird Mount Soche, both scheduled to open in October, 2021.

With all these initiatives, complemented by an improvement in business environment, Sunbird Board forecasts returning of the company to profitability in the second half of the year.

Sunbird’s loss after tax was at MK475.8-million which compares favorably to the loss of MK1.3-billion realized in the same period last year, signaling a process of the business environment returning slowly to normality as the impact of the Covid-19 pandemic on the industry is better than the first wave in the previous year.

Sunbird’s nine properties include Sunbird Capital in Lilongwe, Sunbird Mount Soche in Blantyre, Sunbird Lilongwe, Sunbird Mzuzu, Sunbird Mkopola in Mangochi, Sunbird Livingstonia Beach in Salima, Sunbird Chintheche in Nkhatabay, and Sunbird Ku Chawe in Zomba.

The Malawi Government has unveiled its plans to support the country’s manufacturing sector as a way of achieving the pillar of industrialization contained in Malawi 2063 vision.

In his presentation when he appeared before Parliament’s Public Accounts Committee (PAC), Principal Secretary in the Ministry Peter Simbani told the members of parliament that the Government is initially reviewing the industry’s legal framework.

Simbani said understanding that industrialization is one of the MW2063 pillars, government unbundled the Ministry of Industry from the Ministry of Trade, Industry and Tourism to fully champion the agenda of industrializing the country.

He said: “First of all we want to look at our legal framework. On top of that, we want  to look into strategies that we have been having as a country so that going forward we develop policies and strategies that should really push us to what the vision tells us so that time by 2063 we become a middle income country.”

“Secondly, we are looking at rural industrialization strategy which is focusing on those rural areas that produce marketable products for example tangerines in Mwanza.”

“We want to organize people in those areas to form cooperatives so that they have added force to competently negotiate prices for their products.”

“We will also create secondary cooperatives that will be buying from these primary cooperatives. We have full package on how we want to move this agenda to where we want to be.”

He stressed that such Government interventions will see the Ministry’s contribution to Gross Domestic Product (GDP) increasing from the current nine percent to 12 percent by 2030.

Simbani said the Ministry’s interventions will focus on supporting growth of both large and small scale industries.

On large scale industries, the interventions will include installation of Special Economic Zones (SEZ) of which the Government has already identified sites in Area 55 in Lilongwe; Matindi and Chirimba in Blantyre and; Dunduzu in Mzuzu.

The Malawi Government is planning to construct factory shells in the SEZ and invite investors to come and invest in specific areas to start producing value added products.

He said: “For those that will come and be operating in these economic zones, they will enjoy incentives that the government is going to come up with.”

“Let me tell you that a bill is being prepared and it should come to parliament and once it is approved, gazetted and operationalised, all the incentives that are required for the investors to come in and operate will be in place.”

For the SEZ to start taking shape, the Ministry of Industry requires about MK5-billion from the treasury to compensate people in all identified sites.

In his recommendations, PAC Chairperson Shadreck Namalomba queried the Ministry on the progress on the development of industry parks saying there is no progress seen on the ground.

Namalomba stressed that the Ministry is not showing commitment in the development and that it is not giving proper projections on how some of them will commence. 

He said: “This is the Ministry of Industry and we are saying what is it that you are doing to take us there where the MW2063 wants us to be.”

“We want industrial parks in the country, when are you coming to say here are the parks and we are commissioning them?”

“This is the Ministry that needs to give Malawians radiate confidence out there, Malawians need to see what they are doing. Right now I can say there is much more that they need to do.”

In the MW2063 Agenda, industrialization is earmarked to transform the country’s economy from being predominantly consuming and importing to predominantly producing and exporting.

The manufacturing sector will have strong backward and forward linkages with agriculture, mining and services sectors.

Malawi will pursue an industrial revolution driven by strong human capital and utilization of local resources.   

Industrialization has stagnated in Malawi mainly because of high production costs due to: Inefficiencies in energy and transport; poor standards leading to non-competitive products on international markets; lack of appropriate skills and uptake of technology; high costs of doing business and deficient enabling infrastructure; low access to export markets; governance challenges with regard to policy making and implementation; and non-conducive environment for the growth of small and medium scale enterprises (SMEs), among other challenges.

Malawi’s largest publicly listed conglomerate Press Corporation says it is progressing with discussions with an equity investor for its subsidiary, landline operator Malawi Telecommunications Limited (MTL).

In a summary of unaudited results for the six months period ended June 30 co-signed by Chairman Randson Mwadiwa and Group CEO George Patridge, PCL says the fixed telephony company reported a 9% improvement in its results driven by improved gross margins and costs containment.

“Discussions with an equity investor in the fixed telephone business are progressing well,” state Mwadiwa and Partridge.

PCL’s telecommunications segment which includes MTL and another subsidiary cellular phone network provider, TNM, registered 25% growth in its profit after tax with the mobile phone company registering a 19% growth on its net earnings.

Mwadiwa and Partridge say the company has embarked on several strategic initiatives aimed at regaining its market share in the telecommunication segment, and expects its performance in the sector to show significant improvements in the second half of the year.

National Bank of Malawi, which makes up the conglomerate’s financial services segment, continued to be the main driver of the Group’s results, and delivered satisfactory results which were driven by a 36% increase in net service income.

PCL is also searching for an equity investor for its retail chain, People’s Trading Centre (PTC), which has continued to make losses due to a myriad of operating challenges.

“The search for an equity investor is continuing and some debts may have to be consumed by the group once an equity investor is identified,” state Mwadiwa and Partridge.

PCL’s subsidiaries in the energy sector Press Cane and Ethanol Company of Malawi (ETHCO) were on off season during the first quarter of the year but Mwadiwa and Partridge say the two companies are on track and are expected to deliver planned results.

Mwadiwa and Partridge say the focus of the group is on feasibility of new projects and to consolidate gains made in the existing restructured and streamlined portfolios.

“The Group is well positioned for growth and management is confident to deliver planned results.”

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.