2009 AFRICA BUSINESS CONFERENCE

TRADE AND INVESTMENT OPPORTUNITIES IN MALAWI PRESENTED BY

MR PATRICK MPHEPO (FIRST SECRETARY (INVESTMENT))

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COUNTRY INFORMATIONLocation: South-eastern

Africa bordered by Tanzania to the north and, north-east, Zambia to the west and Mozambique to the south-east, south west and south.

Land Area: 118,484 sq km 45,747 sq mi) (Size of the State of Pennsylvania)

Time Zone: GMT + 2 hours Population: 13.6 millionLiteracy Rate: (2007) 64%

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COUNTRY INFORMATION

URBANIZATION : 19 % (2008)

OFFICIAL LANGUAGE : English

NATIONAL LANGUAGE : Chewa

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NATURAL RESOURCES

Arable land, water, fish, wildlife, forestry

MineralsLimestone, Uranium, Bauxite

Coal,Phospahtes, Monazite, Strontianite, Vermiculite and other Gemstones

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ECONOMY

Currency: Malawi Kwacha

Exchange Rate (March 2008):US$ 1.00 =MK140.00

GDP US$ 2.43 billion (2007) US$ 2.63 billion (2008)

GDP Per Capita US$304 (2008) US$208 (2004)

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ECONOMIC INDICATORS GDP Annual Growth Rate (2008) : 8.7%

(2007) : 8.1%

Price Inflation Rate (2008) : 8.2% (2007) :

7.9%

Interest Rates (2008) :15 % (2007) :

22.5%

source – EP&D

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ECONOMIC STRUCTUREGDP Share Per Sector

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ECONOMIC STRUCTURE

Agriculture is the backbone of the economy generating about 80% of foreign exchange and 80% of employment

Focus on diversifying the sources of economic growth; manufacturing; mining, tourism etc

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TRADE GOALSIncreasing production and trade of primary

products with assured markets;

Increasing in production and trade higher value products e.g coffee, macadamia nuts;

Increasing production and trade of value additioned and processed e.g textiles and garments

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TRADEMajor Exports:Tobacco, tea, sugar, Other ExportsApparels, cotton, groundnuts, coffee,

macadamianuts, timber, pulses, rice, groundnuts, maize etc

Major ImportsElectrical equipment and machinery,

major petroleum products, fertilizer, motor vehicles, iron and steel, pharmaceuticals.

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Year Imports (CIF) US$ Export (FOB) US$

2006 889.3 446.5

2007 1,272.0 704.6

2008 1,436.6 1,003.6

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IMPORTS AND EXPORTS

Import Partners Export Partners

South Africa

48.5 South Africa

18.0

Mozambique

16.9 UK 12.2

UK 7.9 Germany 7.6

Zambia 4.8 USA 7.0

Tanzania 4.6 Egypt 6.9

MAJOR IMPORT AND EXPORT SOURCES

TRADE OPPORTUNITES IN MALAWI

1. Increasing Trade in Traditional Export Products with Established Markets

Tobacco Tea – Second largest producer in Africa after

Kenya. Sugar Cotton, rice, ground nuts etc

2.2. Increasing Trade in AGOA ProductsIncreasing Trade in AGOA Products Textiles, garments and apparels Increase exports of agricultural products;

coffee, macadamia nuts, paprika etc

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TRADE OPPORTUNITES IN MALAWI3. Increasing Export Diversification to

Higher Value Products Arabica Coffee; Macadamia Nuts; Bird’s Eye

Chilies and long Cayenne; Beans and pulses; Soya Beans; Paprika; Cut flowers; Maize, spices

4. Increasing Trade in Value Addition and Processed Products

5. Increasing Domestic and Regional Trade through Imports Substitution Goods

Chicken, eggs

4. Increasing Export on Non-Agriculture Hand loomed and folkloric articles i.e. curios Minerals, rubber, timber 14

Mzuzu Coffee Plantation at Misuku Hills

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Coffee Processing

Coffee in the Field Mzuzu

Coffee

INVESTMENT GOALS Increase investment in production of

exports;

Boost investment in export products - oriented sectors;

Boost investment in manufacturing industry to encourage value addition;

Boost investment in domestic and regional market products for imports substitution;

Encourage investment in infrastructure development

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WHY INVEST IN MALAWI?A Liberalized Economic and Political

Commitment to Private Sector

Market determined interest rates;

Floating currency;

Foreign currency denominated accounts for regular exporters 60% retention;

Full repatriation of profits and dividends;

Competitive Investment Incentives

WHY INVEST IN MALAWI?Politically Stable Country

A Multi – party fledgling democracy with three arms of Government

Malawians are peaceful and friendly people

No history of civil war

Has had four peaceful multi-party democratic elections in 1994, 1999, 2004 and 2009

WHY INVEST IN MALAWI? Preferential access to world markets

under COMESA, SADC, EU, AGOA;

Hard Working, trainable, reliable and English speaking labour force;

Serviced Industrial Estate & Export Processing Zones;

Functional and constantly developing infrastructure

INVESTMENT OPPORTUNITIES1. Investment in Agriculture1.1 Increasing Agro processing1.1.1 Integrated Cotton Industry to take

advantage of AGOA Cotton commercial farming through contract

farming –demand of 100,000 MT Ginning, spinning, weaving Textiles, and accessories Cotton yarn manufacturing Garment Manufacturing

1.1.2 Fruit Processing and Vegetables Canning

Establishing of fruit juice concentrate processing facility using local-grown fruits

Establishing of horticultural centers for processing, packaging and storage of organic vegetables

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INVESTMENT OPPORTUNITIES1.1.3 Increase production and processing

of higher value export products Coffee, Macadamia Nuts, Paprika, Soya

beans, Sesame. etc 1.2 Increase production of traditional

export products through commercial farming

Large estate farming through irrigation

1.3 Increase production of domestic and regional markets products for import substitution

Livestock and dairy Poultry and piggery

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INVESTMENT OPPORTUNITIES2. Increase Investment to Utilized Natural

Resources2.1 Mining

◦ Uranium◦ Limestone over 25 million tonnes◦ Monazite/strontianite 11 million tonnes◦ Graphite 2.8 million tonnes ◦ Phosphate Carbonatite 2.0 million tonnes (8.8

million tonne residuals)◦ Bauxite: over 25.6 Million tonne reserves◦ Others: Vermiculite, Gypsum, Glass sands, iron

sulphides, heavy mineral sands, ceramic clays.

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INVESTMENT OPPORTUNITIES2.2 Phosphate Fertilizer Demand, 200,000 metric tons per annum

2.3 Fish and Crocodile FarmingSetting up of large scale fish farms for

commercial fishing e.g Chambo (Tilapia fish)

2.4 Wood and Rubber Products Rubber Trees Forestry Plantations –Timber, concession

management Timber and rubber production industries

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Chikangawa Tree Plantation

Malawi Cichlids

INVESTMENT OPPORTUNITIES3. Increase Infrastructure Development3.1 Transport

Shire Zambezi Waterway Project –Open Malawi into Indian Ocean through Public Private Partnership (PPP)

Provision of river/sea bargers

Air and rail Rehabilitation of Sena Railway link between

Malawi and Mozambique

3.2 Housing and Building Projects High demand for affordable housing,

office blocks construction and shopping malls 25

INVESTMENT OPPORTUNITIES3.3 Information and Communications

Technology and Telecommunications

Broadband telecommunications infrastructure Installation/expansion of optic cable with

connectivity links to other countries Information Technology Centres Data processing hubs Broadband Internet Services WIFI and Intranet providers

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INVESTMENT OPPORTUNITIES3.4 Tourism Infrastructure Development

Wildlife Tourism Concessions for Management of Wildlife National parks and

investment in construction of Game Lodges.

Tourism Lake Malawi Shore Resorts (Third Largest Fresh Water Lake) Cape McClear (Lake Malawi National Park – unique

ornamental fish species.

Eco Tourism Products Machewe Falls Likhubula Mountain Resort (Mulanje Mountain, highest in

South Central Africa at 3000 meters).

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Kande Beach Malawi Cichlids Species

MALAWI INVESTMENT PROMOTION AGENCY (MIPA)Parastatal organization created through an act of

parliament to promote, attract, encourage, facilitate and support both local and foreign investment

Facilitates all aspects of investment process in Malawi

Operates as one stop investment Centre through an interministerial committee - the investment approval committee

10 calendar days for applications processing

INVESTMENT PROTECTIONProtection of foreign investors’ assets

guaranteed by constitution of Malawi

Member to Multilateral Investment Guarantee Agency (MIGA)

Signatory to the international centre for settlement of investment disputes

For Further Details Contact:-Embassy of the Republic of MalawiLocation: 1029 Vermont Avenue, N.WSuite No. 1000, Washington DC 20005

Tel: 202 349 - 9567, 202 721 -0270 Email: malawidc@aol.com web: www.malawiembassy-dc.org