Saturday, July 11, 2009

Stability in Malawi to attract K75b investments

BY Thom Khanje - 10 July 2009

Political stability and favourable macro-economic conditions prevailing in the country have started attracting the attention of international investors, the 2009 national budget economic report has said.

The report confirms earlier reports from the Ministry of Industry and Trade that there are pipeline foreign investment projects worth over US$500 million (K75 billion) which are expected to create 25,908 jobs in the country.

According to the report compiled by the Ministry of Economic Planning and Development, the investments that have been committed for Malawi are coming from the Southern African, Asia and other parts of the world.

The bulk of these investments, says the report, are in manufacturing at 36.6 percent, tourism at 17.5 percent, agriculture at 15 percent and mining at 15 percent.

“The ministry’s [industry and trade] challenge is to transform these pipeline projects into operational investments which have the potential to create 25,908 jobs.

“The increase in investor response has come about largely due to the stable political and macro-economic conditions prevailing in the country,” reads the report, in part.

Cataloguing the projects, the report says a company called MSA Investment plans to invest US$220 million into sugarcane plantations to produce sugar, ethanol, alcohol and other consumables derivatives. The investment is expected to create 20,000 jobs.

Bwanje Cement Manufacturing plans to investment into cement production at Bwanje at a cost of US$30 million, employing 1,000 people, says the report. Heavy Mineral Sands has earmarked US22 million for Malawi to employ 200 people.

According to the government economic report, African Cotton Ginning and Textile Manufacturing Company plans to enhance the country’s integrated cotton industry through a US$12 million project that will employ 500 people.

Another textile industry investment will come from Textile Industry Company which plans to invest US$25 million and create 300 local jobs. A bio-diesel project is also being conceived at a cost of US$100 million to create 1,000 jobs.

Limphasa Sugar Company is to invest into a US$60 million into a sugar plant in Nkhatabay and provide employment to 1,200 Malawians. Eucalyptus Essential Oils plan is being conceived at Chikangawa at an investment of US$500,000 to employ 50 people.

A cigarette manufacturing company will soon opens its doors in Blantyre at a cost of US$3 million to employ 100 people, says the report, while a tobacco processing company plans to increase the profile of Malawi’s tobacco industry with a US$40 million investment at Kanengo in Lilongwe.

The report also mentions the Chinese-owned Malawi Cotton Company, whose construction works were recently commission by Vice President Joyce Banda at Balaka. The project, earmarked at US$25 million, is expected to create 1,100 jobs and provide contract farming support to 100,000 cotton farmers in Balaka and parts of Ntcheu areas.

Vipya Furniture Industries, Vizara Eco-Timbers Limited and Kayerekera Uranium Mine are some of the investment projects cited in the report to have started their operations in 2008.

Secretary for Industry Secretary for Trade and Industry Newby Kumwembe told the Business Times earlier this month that his ministry was now in the process of working with the investors and various local authorities to ensure that the investments become a reality soon.

“We have just finished profiling the number of enquiries the investors have made in the country following their investment missions and they are coming up to US$500 million. It is now just up to us to facilitate their coming,” said Kumwembe.

He said his ministry would follow up on the proposed investments.

Kumwembe said it was important for Malawi to start getting investors especially in the manufacturing sectors because that was one of the key ways of increasing Malawi’s industrial capacity and competitiveness in readiness for the country’s full integration into the free world trade.

“We have to develop our industry if the country is to benefit from international trade integration bloc like the recently launched Comesa Customs Union,” said Kumwembe.

The recent peaceful elections Malawi has conducted are also said to have won the admiration of many foreign investors who have now increased their enquiries for investment opportunities in the country.

“Although the economic environment in the country has been favourable for a number of years now, the investors took a wait-and-see position prior to the elections because they were not sure how the aftermath would be,” said one investment advisor working for a major commercial bank.