Mining & Trade News

Malawi is advancing with preparations to become part of the Africa Continental Free Trade Area (AfCTA) after President Dr. Lazarus Chakwera signed and ratified the AfCFTA instruments on November 1, 2020, which government is now working on depositing with the AU.

The approval of instruments required to operationalize the AfCTA are expected to be signed off by African governments by January 2021 to show their commitment to the trade arrangement.

The AfCFTA is one of Africa’s reform efforts upon realizing trade imbalances with other continents and the subsequent economic loss suffered since the colonization era.

According to Minister of Trade, Sosten Gwengwe, the AfCFTA reinforces the dreams of the founding fathers of the African Union to see a united and more integrated Africa that would ensure that African wealth remains in Africa to benefit the African population.

Among the instruments required to operationalise the AfCFTA include: Rules of Origin that entails laws, regulations and administrative rulings applied by governments to determine the country of origin of goods, services or investments and whether they qualify for a preferential tariff regime.

Through the arrangement, tariff offers shall be applied to scheduled products and time frames within which a country can liberalise its trade in the free trade arrangement. To date, 41 countries and customs unions, including Malawi have submitted their tariff offers.

Gwengwe disclosed that Malawi submitted its initial offer covering 90% tariff liberalisation in November 2019 and the final offer is now ready after being validated by stakeholders, led by the Malawi Confederation Chambers of Commerce and Industries (MCCCI), on November 21, 2020.

“All strategic products and sectors have been designated either under sensitive or excluded list for purposes of liberalization,” said the Minister explaining that the country is at an advanced stage in preparing the National schedule of specific commitments and is expected to submit it before January 1, 2021.

Gwengwe said that another advantage of the AfCFTA is its role to eliminate Non-Tariff Barriers (NTBs) as a way of enhancing and facilitating intra Africa trade.

“The AfCFTA mechanism will facilitate reporting, monitoring and negotiating of the removal of NTBs across regions and the continent as a whole. This facility will provide real time communication on the existence and types of NTBs among all parties to reduce time and cost of cross border trade,” Gwengwe said.

He added; “Although our product offering is primarily classified under sensitive and/or excluded, we still have access to a wider market than before especially to the North, West and Central parts of the continent.”

The minister further disclosed that Malawi will soon launch the National Export Strategy II that will encourage private sector develop competitiveness in niche areas where Malawi can have comparative advantage.

Gwengwe said his ministry, with the help of the United Nations Economic Commission for Africa (UNECA), have formulated a strategy on National Implementation of the AfCFTA to mitigate against any challenges that may arise out of the operation of the trade agreement.

On November 1, 2020, President Dr Lazarus Chakwera signed and ratified the AfCFTA instruments, which government is now working on depositing with the AU.

A total of 54 out of 55 countries have signed the agreement with exception of Eretria. 34 countries have since ratified the agreement.

The AfCFTA is expected to bring together 55 African countries with a combined population of 1.2 billion people including a growing middle class and combined GDP of more than US$3.4 trillion.

The Ministry of Transport and Public Works has committed to work hand in hand with investors on the construction of an international airport in the lakeshore district of Mangochi in a public private partnership (PPP) arrangement.

Andrew Nthiko, the spokesperson for the ministry, says government is prioritizing the project because it recognizes the impact of a lakeshore airport on the country’s tourism.

“As government, we are very committed to help the investors since the proposed project is crucial not only to Malawi but also to the region,” Nthiko said explaining that among others, government will guide the investors on the best construction site, standards and designation of types of planes to land or leave the airport.

As the Africa Continental Free Trade Area (AfCFTA) comes into effect on January 1, 2021, the airport is expected to be useful in the transfer of people, goods and services across the continent and especially among Southern Africa Development Community (SADC0 member states.

Meanwhile, an interested investor and developer, Cape Maclear Holdings, has asked government to fast track the PPP tender process so that the project starts.

Malawi has two international airports, Kamuzu in Lilongwe and Chileka in Blantyre.

Government also plans to construct an international airport in Mzuzu.

Malawi’s Roads Authority (RA) is inviting eligible consultants to supervise the rehabilitation and widening of four sections of the M1 road between capital city Lilongwe and Northern Region town of Karonga.

The project will, which will involve the rehabilitation of a total of 301km of the M1 road, will be financed using proceeds of a loan from the European Investment Bank (EIB) and a grant from the European Union (EU) under the Africa Investment Facility.

The four targeted sections include; from the turn off to the Kamuzu international airport to kasungu (102 km); from Kasungu to Jenda (85.5 km); from Jenda to Mzimba turn off (46.74 km) ; and Kacheche to Chiweta (66.5 km).

The works will include the widening of carriageways, construction of shoulders, reconstruction of the pavement, widening of bridges and implementation of road safety interventions.

“The primary objective of the consultancy services is to simultaneously carry out the supervision of the rehabilitation and widening works on all four sections of the works including technical and financial supervision, contract management and to ensure that the works are carried out in accordance with the respective contract specifications and to the satisfaction of the implementing agency,” says RA in a statement.

It states that each section will have a defects liability period of 12 months during which limited input will be required by the consultant.

The contract for the provision of the consultancy services is expected to start not earlier than May 1, 2021 with an estimated total duration of 44 months (inception phase of 2 months, construction period of 30 months and defects notification of 12 months).

RA says the invitation for expressions of interest is open to all firms and joint ventures from all countries, and shall be followed by the production of short-listed consulting firms.

“The short-listed firms will be formally invited to submit technical and financial proposals, which shall be evaluated. Award of the contract shall be made on the basis of the most economically advantageous tender (MEAT),” states RA.

Traders in Personal Protective Equipment (PPEs) have bemoaned low sales following continued drop in the number of coronavirus (Covid-19) cases in Malawi, which has prompted many Malawians to stop using PPEs.

Anthony Chiputula who sells face masks in Lilongwe city complained in an interview that since government started announcing a drop in number of Covid-19 infections in its updates, his business has nosedived.

“The decline in number of local Covid-19 cases has greatly affected my business, as only few individuals are interested to buy and use face masks,” said Chiputula

Esther Botolo who sells hand sanitizers in the same city concurred with Chiputula that the number of customers who visit her shop to buy hand sanitizer has gone down. She attributed the decline to the decline in Covid-19 infections which has made people to relax in the fight against the global pandemic.

“The business of selling hand sanitizers is no longer attractive as was the case at the time Covid-19 cases were high,” he said.

Adam Taulo, a tailor in face masks business also complained that his business has drastically gone down. He explained that he usually had huge orders at the time Covid-19 cases were high, which he said is not the case currently.

“My business is struggling a lot, because people no longer place huge orders for face masks. I know this is happening because most of people have stopped adhering to Covid-19 preventative measures,” lamented Taulo.

Meanwhile ministry of Health has asked all Malawians to continue adhering to all Covid-19 preventative measures, saying there is a possibility that the country may experience a second wave of the pandemic as is the case in other countries.

Minister of Agriculture Lobin Lowe has hailed Civil Society Agriculture Network (CISANET) for its meaningful contributions in developing the agricultural sector in the country.

Lowe made the remarks at Bingu International Convention Centre during the Agriculture Open Day organised by CISANET under the theme ‘Making Agriculture Work in Malawi.’

He said he was impressed with various programs and activities that the organisation holds saying their strategic priorities and the thematic areas align with those of the Ministry.

Lowe said: “I am happy to note that CISANET is already a reliable strategic partner that my Ministry continues to work with.”

“I appreciate CISANET’s efforts that aim at coordinating and fostering collaboration among non-state actors towards agricultural transformation.”

“Indeed as the CISANET slogan suggests ‘together we can make agriculture in Malawi vibrant’.”

He also advised all stakeholders in the sector to consider stocking themselves to see if they are making progress in the industry.

Lowe said continued monitoring and evaluation will help the player to gauge how far or close they are towards their intended destination in the sector.

He said it is of paramount importance to devise ways of getting to the top that every farmer in the country has been dreaming to so that their lives can be improved.

The minister also expressed acknowledgement on the challenges that are currently being faced in the sector and said it high time as a country we should start asking ourselves on what we do to promote food security.  

He said: “I do agree with CISANET that at the core of these challenges are the following questions: How do we increase access to markets for farmers? And how do we strengthen the resilience of the sector to weather and market shocks?”

“I would like to assure you that Government is aware of all these challenges, and working really hard to respond to them. As Government we are committed to respond to these challenges through sufficient budget allocations and policy implementation.”

Lowe urged civil society organisations in the country to continue collaborating with the government and also come forward to bring recommendations to government based on their work or experience from expatriates.

In her remarks, CISANET National Director Pamela Kuwali said she was delighted with the Minister’s openness to recommendations from the CSOs.

Kuwali said: “After meeting the minister we are very happy, especially this is not the first time we have met him. We have noted that every time we have been in his office he has been open. Each time we invite him to our events he shows up.

“We understand that the role of revamping the agriculture sector is not a one body duty. So his openness shows that he really cares for the sector.”

She also said holding of more agricultural events in country can help that policies are not only on paper but also on the ground.

Kuwali said the country needs to be harnessing the benefits from every project that it kick starts rather than being masters in paper work.

She said as CSOs working in agriculture they will continue pushing the government to consider revising the calendar on commencement of buying farm produces.

Kuwali said the country has the tendency of opening ADMARC doors very late, a practice that forces the farmers to be selling their products to unlicensed vendors.

Meanwhile, under Affordable Inputs Program (AIP) the Ministry of Agriculture has managed to sell a total of 165,784.40 Metric Tonnes (MT) of fertilizer representing 45%, translating to 1,657,844 farming household accessing fertilizer.

The Government has also sold seeds amounting to 8,744.44 MT representing 44%.

Malawi Milk Producers Association (MMPA) has expressed concern over low milk and dairy products consumption among Malawians.

The organization which is a mother body for all milk producers associations in the country says local milk intake has stagnated for over two years now which it says is a worrisome development to the local dairy products manufacturers.

Herbert Chagona MMPA National Director said in an interview that it was worrisome that most Malawians do not take milk and its products as part of their essential daily diet since they perceive it as a luxury.

According to Chagona, Malawi is the lowest milk consumer in the Southern African Development Community (SADC) region where the highest milk consumer only consumes eight litres per year which he said is against World Health Organization’s recommended quantity of 100 litres per person per year.

Chagona explained that besides perceiving milk consumption as a luxury, there are also other prominent factors leading to the decline in dairy products consumption including high poverty levels which forces people to use their income on basic commodities.

He, however, asked Malawians to change their perception on milk and dairy products, which he said are crucial in human development.

Chagona also asked dairy products manufacturers to ensure that prices for their products are affordable to most poor Malawians.

“Most people think that milk and other dairy products are designed for the rich just because their prices are usually exorbitant. Let me therefore ask dairy products manufacturers to make prices of their commodities affordable to people with diverse economic strengths,” said Chagona

He also asked dairy products manufacturers to establish their industries in all parts of the country in order to make their products accessible to all people across the country.

Chagona expressed concern that the northern city of Mzuzu does not have any milk processing and dairy products manufacturing industry, despite that the region is one of the highest milk producers.

He said the unavailability of milk processors and dairy products manufacturers in the Northern Region forces farmers to sell their milk to vendors at very low prices.

” The establishment of dairy processing industries in the Northern Region would help dairy farmers have access to reliable markets, while providing people in that area with dairy products which are important to their health,” said Chagona.

MMPA recently imported dairy cattle and goats which were distributed to the organization’s members in a ploy to meet the demand for dairy products in Malawi.

MMPA was established to coordinate all dairy farmers in Malawi and provide them with technical skills on how best they can benefit from their work.

In an attempt to mitigate challenges being faced by women entrepreneurs in the country, the Malawi Government has embarked on institutionalization of a number of business and industrial reforms.

Speaking during the first Annual COMESA Federation of Women in Business (COMFWB) Trade Fair in Lilongwe, Minister of Trade Sosten Gwengwe said the reforms have been instituted in a bid to change the country’s trade composition and promote industrialization realizing the major role women has in the business sector.

He said: “The Government of Malawi is implementing the National Industrial Policy (NIP) and National Trade Policy (2016 policies).

“The NIP has the objective to maximize domestic value addition and structural transformation which is a theme adopted at the continental level, the Tripartite and regional levels.

“Particularly, in setting a new path for the structure of the economy from dominance by agriculture and towards a larger share of manufacturing in Gross Domestic Product (GDP), the NIP adopted the clusters that were identified in the country’s National Export Strategy and adds clusters that Malawi has capacity in and vital for import substitution.”

He said the Government has instituted National Trade Policy to address constraints on the supply side in order to grow the economy at national level.

Gwengwe added that the policy will also build the country’s business sector to respond to improved market access and build a competitive economy.

The Ministry of Trade is implementing a number projects with assistance from various development partners such as the European Union, World Bank, United Nations Development Programme (UNDP), UK’s Department for International Development (DFID), United States Agency for International Development (USAID), among others.

The projects include the Enhanced Integrated Framework, Export promotions, the Micro, Small and Medium Enterprises Business Incubator, Malawi Enterprise Productivity Enhancement Project, Trade Related Facility, among others.

He stressed that the projects will provide capacity and technical support programmes to businesses including Small and Medium Enterprises so that stakeholders can improve their knowledge and skills in value addition activities as well as build linkages with both domestic and international markets.

Gwengwe urged local entrepreneurs to be participating in the regional trade fairs and exhibitions saying such creates a platform to integrate into regional value chains and overcome some supply side constraints.

In his remarks, Minister of Agriculture Robin Lowe said there is need to resuscitate agribusiness development in the country as it has potential to spur socio-economic development and growth.

“However, this is possible if all players in the agriculture sector, including financial institutions and farming communities get committed towards investing and improving their performance in agribusiness and pulling in the same direction, “ he said, “This requires collaboration and coordination of various interventions including banking services that can benefit agribusiness and agriculture sector growth in Malawi.”

Lowe said the country requires employment of some strategies for it to restore its glory in agribusiness.

The strategies include: promoting agribusiness financing; promoting savings and investment culture by having rural based campaigns and awareness meetings; facilitating innovative financing mechanisms and arrangements for farmers; facilitating provision of risk-reducing initiatives in the agriculture sector including crop insurance, warehouse receipt system and other initiatives and; promoting electronic banking initiatives.

He also said the country needs to institute promotion and financing anchor farm model initiatives which heavily relies on financing.

Lowe said farmers and all players in the agriculture sector lacks support from the banks for them to excel in the industry.

He said the country also needs to invest in developing skills of managing various processes across value chains and value chain development; and promote development of the market infrastructure.

The aagricultural sector employs 85% of the population, contributing 65% of export earnings and 28% of Gross Domestic Product (GDP).

Rainy season is finally here, the time farmers are usually busy in their gardens growing various types of crops, for sale and consumption. But in Malawi, the number of tobacco growers during this year’s season has drastically gone down.

Malawi, whose economy is agro based has relied on tobacco as the main revenue earner for many years but for some time, the industry has been going down drastically, something that has affected the country’s economy.

Commentators say anti-smoking lobby championed by the World Health Organization (WHO) and poor market prices for the leaf are the major factors affecting the local tobacco industry.

Tobacco Commission’s (TC) recent report revealed that the number of farmers who registered to grow the leaf during 2020-2021 season had gone down by 15 percent, the development the organization described as worrisome and retrogressive to the development of the industry.  

The report explained that by September 30, 2020 only 45,000 farmers had registered to grow the green gold during 2020-2021 season, the figure which is lower compared with 53,000 farmers who registered in the previous season. TC extended the period to October 14, in a bid to woo more farmers and there was a slight improvement in the number of farmers who registered after the extension.

“The Commission extended registration and licensing period after realizing that the number of farmers who had registered previously was small. Extension of the period was done in a bid to entice more farmers for the exercise,” reads the report.

But some farmers have said, they are no longer interested in tobacco growing because the industry is no longer lucrative as it used to be previously, something they have majorly attributed to reduced market prices for the commodity. They have therefore said, instead of investing their energies in tobacco growing, they would invest it in the production of other crops that might benefit their families.

Farmer Hananiya Chimala of Mitundu in Lilongwe, said he has been in the industry for many years, but has never experienced the kind of nightmare they are facing these days. He said the many challenges faced have forced him to drop. He cited wretched market prices for the leaf as one of the major challenges faced.

“I have decided to quit tobacco farming because it is no longer paying me sufficiently as it used to be at the time I was joining. Generally, the industry started staggering soon after the World Health Organization (WHO) started the Anti-Smoking Lobby saying smoking is a health hazard,” said Chimala.

While Henderson Chinyama another farmer from Nathenje in the same district, accused buyers of favoring contract farmers than individuals, so he has decided to quit tobacco farming which he said is no longer reliable.

“I feel that we are cheated by our leaders, who cannot make solid decisions on tobacco pricing. Almost all the presidents we have had assured us that, they would do anything possible to improve the leaf prices but nothing is done to that effect so I am fed up with their rhetoric,” complained Chinyama.

Malawi realized K125 billion from the sales of 110 million Kilograms of the leaf in the just ended tobacco growing season.

Poultry Industry Association of Malawi (PIAM) has expressed worry over the increase in cases of illegal poultry importation, the conduct the institution says weighs on business for local farmers and government’s revenue collection.

PIAM, which is the mother body of all poultry associations in Malawi has expressed the concern following the increase in the number of cases of illegal importation of poultry and poultry products. The organization says, if the malpractice is not checked, it might have grave effects on local poultry industry and the national economy.

PIAM Technical Advisor Eric Chuma lamented the organization receives reports of people bringing into the country birds from other countries every week.

He said most people smuggling chickens into the country sell the birds at cheaper prices than those produced locally which negatively impacts on business for local farmers.

Chuma revealed that smugglers use unchartered routes thereby evading import duty which is a loss to the country in terms of revenue collection.

“As a country, we should vigilantly ensure that illegal poultry importation is halted. The practice is killing the local poultry industry and impacting negatively on collection of taxes,” said Chuma.

Most chickens are smuggled from Zambia and are locally offloaded in Lilongwe at Area 25, Mtandire, Mtsiliza and Kauma. While in the North, the birds are offloaded at Mzimba boma and Jenda.

Chuma, however, expressed optimism that the issue will be addressed saying his organization is working in collaboration with the Ministry of Trade, Police and Malawi Revenue Authority (MRA) to arrest the situation.

He asked local consumers to support the local poultry industry which, he said, contributes about 11% to the country’s Gross Domestic Product (GDP).

There are also worries that illegal poultry importation may lead to transfer of infectious diseases into the country.

Meanwhile, PIAM has asked the Malawi Government to remove tax on the importation of products used in poultry production in order to support the local industry.

“PIAM believes that if products used in poultry farming are cheaper, cases of smuggling of chickens will be minimized because the local products will sell at cheaper prices compared to imports,” he said.

Police in Mchinji recently intercepted trucks smuggling poultry into Malawi from Zambia.