Mining & Trade News

Minister of Agriculture, Irrigation and Water Development Kondwani Nankhumwa has hailed the Kutukula Ulimi m’Malawi (KULIMA) project being implemented by an international civil society organization Self Help Africa and its partners saying it is assisting the government in overcoming challenges that Malawi’s agricultural sector is facing.

The Minister made the remarks yesterday in Lilongwe during the learning event of the project, which was organized by Self Help Africa Malawi.

Nankhumwa said the sector is facing challenges such as dependency on rain fed agriculture, post-harvest losses, limited agricultural diversification, small land holding sizes, land degradation, lack of formal markets, among others.

He said: “I commend the KULIMA project for empowering local farmers with relevant knowledge through conducting the Farmer Field School, an approach that is playing an important role in improving and strengthening the delivery of extension services in the 10 KULIMA Project districts.”

“The approach allows farmers to experiment with new agricultural technologies without putting their own food security at risk.”

He said weak delivery of agricultural extension services due to among other factors, high farmer and extension staff ratio and ineffective coordination is one of the major problems affecting the country’s agricultural sector as it weighs on progress on dissemination and adoption of recommended farming technologies by farmers.

 “The situation has been worsened by the increasing prevalence of pests and diseases, including the emergence of the Fall Armyworm which has impacted smallholder farmers across all regions,” he said.

He, therefore, hailed the Farmer Field School approach as an innovative extension approach that is empowering farmers to identify their problem and find solutions through learning.

Self Help Africa is implementing the KULIMA Better project in 10 districts across the country in coordination with four organisations namely Adventist Development and Relief Agency, Actionaid, Plan International and Evangelical Association of Malawi with funding from the European Development Fund.

The objective of the project is to contribute to increased growth of Malawi’s agricultural sector, expand commercial agriculture base and improve food and nutrition security.

Nankhumwa also commended the project for its efforts to integrate gender, nutrition and financial inclusion through the Farmer Field Schools approach in which it provides training to farmers on various topics.

Under the KULIMA BETTER project, a total of 4, 970 Farmer Field Schools have been established and are going through a season long training focusing on different study topics which among others include integrated pest and disease management; crop variety performance; integrated soil fertility management and soil and water management.

The learning events are conducted to ensure that the lessons drawn from the Farmer Field School studies are shared with the wider community and stakeholders at community, district and national levels.

This year’s National Learning Event was conducted under the theme of ‘Finding local solutions to sustainable agricultural production, diversification and climate change through Farmer Field Schools.’

Agriculture is the main stay of the economy of Malawi contributing close to a third of the country’s GDP and employing majority of the labour force.

The Malawi Energy Regulatory Authority (MERA) says it is set to meet the needs and expectations of various stakeholders in Malawi through implementation of its third Strategic Plan and Customer Service Charter for the period of 2020 to 2024.

Speaking in Lilongwe during the launch of the strategic plan and customer services charter, Board Chairperson for MERA Joseph Bvumbwe said the strategic plan articulates the vision, mission, core values and an implementation matrix that will help the body to focus on the terms to deal with expectations during the four years.

“During the four years MERA will focus on the following priorities that have been termed as strategic pillars: positive contribution towards an energy secure nation; financial sustainability; efficient and effective service delivery; and public trust,” Bvumbwe said.

Stakeholder’s expectations include: timely processing of applications; strict enforcement of Performance and Safety Standards; continuous professional development of energy industry players; consistency in the enforcement of regulations; enhanced information communication and education of stakeholders especially regarding to MERA roles and functions; and improved efficiency in operations.

Bvumbwe said MERA desires that regulation of the industry should result into predictable and reliable energy supplies to ensure that the country has energy security in terms of supply, quality and distribution.

He stressed that during the planned four-year period, MERA will make more efforts to increase and diversify its revenue base to achieve the estimated budget of MK36.2 billion for the implementation of the plan.

He said: “We shall strive to be efficient for effective service delivery and we shall adopt best practices and provide services in accordance with governing statutes.

“We desire to enhance our transparency, open communication, and demonstrate high standard of ethics.”

The Board the board has identified potential risks and strategies to mitigate any setbacks to reaching the desired destination.

He said launch of the MERA service Charter and 2020-2024 Strategic Plan is an important landmark for MERA, in particular, and the energy sector generally. 

“The Board commits to work with the CEO, Management and staff to ensure that MERA works in such a way that is not only responsive to the needs of consumers and industry players but also facilitates the overall quality implementation of the Service Charter and Strategic Plan,” he said.

Bvumbwe pleaded for continued support and cooperation from the stakeholders stressing that that is the only way to make the plans have true meaning and bear results.

In his remarks, Minister of Natural Resources, Energy and Mining Binton Kutsaira, who was the Guest of Honour at the ceremony, said availability of adequate energy is a key catalyst to the country’s development and MERA is at the very heart of the solution to deal with energy crisis in the country.  

Kutsaira said the strategic plan has come at an opportune time when Malawi’s energy sector is undergoing transformation as the country races towards a middle income status that requires more energy to power up economy.

He said: “The 2020-2024 MERA strategic plan has set out a comprehensive roadmap for reform of the energy sector. Its objectives are to ensure that the sector becomes more performance oriented, more flexible and more responsible.”

Kutsaira urged management of MERA to continue engaging with all stakeholders as they implement the plan.

Energy is of the key priority areas (KPAs) outlined in the Malawi Growth and Development Strategy III.

Facebook on Sunday, February 9,2020 wrapped up its Community Leadership Circles (CLC) program, an initiative aimed at uniting social media administrators, in Blantyre.

The program offered opportunity to local admins of Facebook groups, pages or events to connect and share knowledge.

CLC Blantyre lead Frank Kamanga said the goal of the program was to build stronger communities by supporting local leaders online and offline and to strengthen their role in the world.”

“The program provided the highly involved administrators the opportunity to share their best practices and participate in leadership development meetings,” he said.

Kamanga also said the program has helped local young entrepreneurs to expand their marketing base as they were taught on how to run digital adverts to reach out to Global audience through the meet-ups.

“The platform has proven to be an efficient and cost effective means of disseminating business information, and over 200 local entrepreneurs in Blantyre have benefitted from the program”.

Anna Malewezi, Founder of a local enterprise AG Malaika and beneficiary from the program, hailed the initiative for creating a platform to discover other innovative ways of advertising various enterprises through the social site, as well as networking avenue it brought about.

“The program has opened a new window for us especially startups to maximize our profits and boost our capital through cost-effective means of marketing our products and services, as through Facebook we are able to reach out to wider audience”.

She urged young entrepreneurs to make use of the social media site citing saying there is more to be done in Malawi to ensure full utilization of the social media in this digital era.

Malewezi said sound policies to increase Internet accessibility and lower prices for data usage, are among other factors to be considered to enhance social media usage in Malawi.

The CLC program has impacted the lives of over 11-thousand attending admins in 50 countries with nearly 400 in-person events hosted globally.

A leading international development charity organization Self Help Africa (SHA) has organized a national learning event for its Kulima Better Extension Training Transforming Economic Return (BETTER) Programme which will be held at Crossroads Hotel in Lilongwe on February 14th 2020.

The national learning event will be conducted under the theme ‘Finding local solutions to sustainable agricultural production, diversification and climate change through farmer field school.’

Learning and Communication Specialist for SHA Pauline Mbukwa says in a Press Statement that the national learning event aims at sharing the best practices that have been documented by farmer field schools.

Mbukwa says: “The overall objective of KULIMA BETTER project is to increase resilience, food, and nutrition and income security of 402, 000 smallholder farmers in the 10 KULIMA districts.”

“Since its inception in 2018, the project has been conducting various studies through farmer field schools which involve comparing research based recommendations with local practices and testing innovations in a low risk environment.”

Mbukwa says the conference will, among other things, feature oral presentations from various organizations, poster sessions, video show, and pavilion displays around diverse sub themes.

The diverse sub themes include: Integrated pest and disease control in the context of fall armyworm and Banana Bunchy Top Virus (BBTV); impact of GALS approach on gender roles in agriculture; nutrition actions for sustained dietary diversity; resilience to climate shocks; farmer field schools for improved extension services delivery; and cost effective soil fertility management.

SHA is part of the Kutukula Ulimi M’Malawi (KULIMA) program which is co-funded to the tune of €111-million, with the European Union contributing €100-million.

The four main implementing partners of KULIMA program include: Ministry of Agriculture, Irrigation and Water Development, Food and Agriculture Organization of the United Nations (FAO), GIZ, and SHA led consortium, all playing critical roles in supporting the Malawi Government to deliver the three components of KULIMA program which include to increase agricultural productivity and diversification through mainly up-scaling climate-smart agriculture technologies; agriculture value chain and business development; and support to improved governance in the agricultural sector.

The program is being implanted in 10 districts of Mzimba, Chiradzulu, Kasungu, Nkhatabay, Nkhotakota, Karonga, Mulanje, Salima, Chitipa and Thyolo.

SHA is implementing the five-year Better Extension Training Transforming Economic Return (BETTER) project in collaboration with Action Aid Malawi, Adventist Development and Relief Agency, Plan International and Evangelical Association of Malawi.   

SHA’s expertise is in small-scale farming and growing family-farm businesses, with highest motivation by injustice, by their expertise in small-scale agriculture and family-farm business, and the opportunity they have to help small farmers change the lives of their families.

The Tobacco Commission (TC) has warned tobacco traders against purchasing the crop from farmers without a buyer’s licence and cross-border tobacco trading saying such practices contravene the Tobacco Industry Act of 2019, which has now come into force.

The new Tobacco Act, which became effective in February last year, seeks to bring sanity and curb major constraints for the industry including high cost of production and bad agricultural practices.

TC’s Corporate Planning and Development Manager Hellings Nasoni told Mining & Trade Review in an interview that the Commission is now enforcing the law to address illegal practices in the tobacco industry.

He said: “Illegal tobacco vending has been a problem for Malawi for a long time and it has contributed to the downfall of the local market for the gold leaf.”

 “Therefore, we are issuing a timely warning to alert potential perpetrators against the illegal acts.”

“The Commission has been receiving reports of malpractices such as exporting unprocessed tobacco without written permission from TC and, importing tobacco to sell it on Malawi Tobacco Licensed Floor which is contrary to Section 96(2) and section 87(1) of Tobacco Industry Act 2019.”

Nasoni described the New Act as a vital instrument that will protect farmers from being exploited by vendors who buy tobacco from growers without a valid buyer’s license which is in breach of Section 67(1) of the Act.

The Act states that any person contravening these sections shall upon conviction be liable to a fine of K10- million and 5-years imprisonment.

Tobacco buying companies have expressed interest to buy 154.3 million kilogrammes (kgs) of tobacco this year, 3% higher than the aggregate demand of 149.6 million kilograms in 2019.

Tobacco is Malawi’s main foreign exchange earner which rakes in about 60% of foreign exchange earnings for the country, and contributes about 13% to gross domestic product.

Reserve Bank of Malawi’s (RBM) report released at the first 2020 meeting of the Monetary Policy Committee (MPC) shows that the sectors of energy and mining registered highest growth in the year 2019 due to continued expansion of private sector credit in the country.

The report indicates that the energy sector comprising electricity, gas and water registered 101.8% while mining and quarry registered 73.8% growth.

RBM Governor Dalitso Kabambe says the development was supported by reduction in the interest rates in the country.

Kabambe says: “Private sector credit grew by 21.3% in 2019 compared to 11.5% in 2018. This development was supported by reduction in interest rates. Apart from the traditional borrowers, notable expansions were observed in energy and mining sectors.”

He projects that oil prices in 2020 will remain broadly stable than the past year, with prospects of continued decrease in 2021.

Kabambe says the projection of Brent crude oil prices in 2020 is at average of US$58.0 per barrel compared to US$60.2 of 2019 expected to lower again to US$55.3 in 2021 despite mounting geopolitical tensions.

The report also unveils that real output in 2019 overwhelmingly increased with estimated growth of 5.0% from 4.0% in 2018 following the recovery in the agriculture sector.

“Real Gross Domestic Product (GDP) growth is projected between 5.0 and 6.0% in 2020 owing to further recovery in the agriculture sector as well as favourable macroeconomic conditions,” reads the report.

The report further says the food inflation remained in double digit throughout 2019 and averaged 14.3 percent compared to 9.8 percent in 2018 while non-food inflation remarkably decreased, averaging 5.4 percent in 2019 from an average of 9.0 percent in 2018.

It says the rise in food inflation was mainly driven by increase in maize prices while the decrease in non-food inflation is on account of relatively tight monetary conditions.

The other sectors that performed well in 2019 include: financial services at 40.7%, transport at 40.3%, agriculture and forestry at 29.2%, construction at 19.3%, trade 16.0% and restaurants and hotels at 7.0%.

However, the Kwacha exchange rate has been broadly stable during the past three years and was trading at an average of K738.8731 per US dollar as of December 2019.

The stability of the Kwacha is expected to continue in 2020 on the back of adequate foreign exchange reserves which stood at 4.1 months of imports at the end of December 2019.

During the meeting, (MPC) decided to maintain the Policy Rate at 13.5% and the Lombard Rate at 0.4 percentage points above the Policy Rate.

The Committee also maintained the Liquidity Reserve Requirement (LRR) on local currency deposits at 5%, and the LRR on foreign currency deposits at 3.75%.

The Committee observed that although rising maize prices are likely to continue pushing up headline inflation in the first quarter of 2020, the elevation is deemed temporary and does not pose significant risks to the medium-term inflation outlook.

The global economic growth for 2019 and 2020 have been marked down by 0.1 percentage points to 2.9% and 3.3% from the October 2019 projections of 3.0% and 3.4%, respectively.

The downward revision is on account of surprises to economic activity in some emerging market economies, notably India and social unrest in few other economies

The Reserve Bank of Malawi was established under an Act of Parliament in July 1964 (Chapter 44:02 Laws of Malawi) and started its operations in June, 1965 in Blantyre replacing a branch of the Federal Bank of Rhodesia and Nyasaland founded to serve as a central bank of the Federation of Rhodesia and Nyasaland. 

At inception, the Bank had total assets amounting to K15.96 million with foreign assets amounting to K15.2 million an equivalent of £8.8 million, representing 18.1% of the federal currency which was redeemed in Malawi. 

The Foundation for Irrigation and Sustainable Development (FISD) is scouting for investment partners to construct a mega shopping mall in Malawi’s capital city, Lilongwe.

FISD CEO Frank Mwenechanya told Mining & Trade Review that construction of the mall in Area 43 along M1 road will cost K14 billion.  

Mwenechanya said FISD is ready to partner both both local and foreign investors to execute the project which will commence in June this year.

He said: “We are much ready for the project as the land is already owned by FISD. We have 50% of the budgeted money and we are just looking for other investors to contribute the other half.”

“Apart from the 50% capital contribution, we have also about 30 to 35% in terms of warehouses, heavy construction vehicles, skilled staff, land surveillance equipment and many more.”

Mwenechanya explained that with the equipment readily available, the project will still start if the process to identify investment partners is not finalized by the commencement date.

He said management of the project will be very easy for FISD as the mall will be constructed a few meters from its headquarters in Kanengo.

Mwenechanya also said some foreign investors have already expressed their interest to pump in shares but the Company is only taking ample time to examine conditions before penning the partnership agreement. 

Speaking at a cocktail that FISD organized for potential investors to market the project, CEO for Lilongwe City Council (LCC) John Chome hailed FISD for the project saying it is rare for a local firm to initiate such “a mega project which is expected to be a game changer for the capital city.”

“The city welcomes the development as it recognizes that any city requires investment to improve living standards of people. On top of that, we are proud that the project is being implemented by young entrepreneurs who are purely Malawians,” he said.

The area 43 mall is expected to have three supermarkets, a variety of retail shops, restaurants, two cinema halls, banks, gym, play area, office rooms, underground and outdoor car parking areas, complimentary spaces and lavatories for each floor.

With a mission of providing highest quality, professional and innovative irrigation, water and clean energy solutions, FISD specializes in design and implementation of innovative irrigation, water supply engineering works, clean energy and financing.

Besides being an irrigation and water supply contractor, FISD is specialized in installation of solar pumping irrigation systems; ground water exploration and drilling; solar off grid power; and self consumption and backup on-grid systems solutions.

The government has appealed to employers to comply with the revised minimum wage of K35, 000.16 per month which come into effect from January 1 this year

Secretary for Labour, Skills and Innovations, Esmie Kainja says in a statement that ‘’noncompliance is a violation of the law and attracts penalties.”

Government effected the new minimum wage after consultation with organisations representing employers and employees.

In the 2019/2020 National Budget, Minister of Finance, Economic Planning and Development, Joseph Mwanamveka said the adjustment of the minimum wage will help protect lowly paid employees and improve their way of living.

Meanwhile, Malawi Congress of Trade Union [MCTU] has expressed shock over the K35, 000 minimum wage saying it is on the lower side considering the current high cost of living.

MCTU Secretary General, Dennis Kalekeni, said considering the cost of living, MCTU proposed to the Ministry that the minimum wage be placed at K40,000 to K45, 000.

Kalekeni said: “The new minimum wage is too much on the lower side such that lowly paid employees are failing to meet basic needs.”

“Unless government raises the minimum wage, a lot of workers particularly those in the lower blanket are going to have economic challenges in the year 2020.”

MCTU also said it is considering putting a proposal to government to introduce different minimum wages for specific industries.

 “During our last consultation meeting, we agreed that it is necessary for domestic workers to have their own minimum wage, and similarly with workers in construction, tourism, agriculture and other industries,” he said.