Malawi: Land of untapped investment opportunities for India

Malawi: Land of untapped investment opportunities for India
Malawi: Land of untapped investment opportunities for India

With more than 100 Indian companies active in the region, Malawi offers a much wider market for India in the years to come. One of the country's leading investment promoters makes his pitch for Indian business. Malawi has had a cordial long-standing bilateral relationship with India which dates back to 1964, when Malawi gained its independence from the British. Malawi has a functioning Mission in Delhi, which it opened in February 2007. Since then, there have been nine major Head of State and ministerial visits to India by Malawi, and five government visits from India, including a visit by M. Hamid Ansari, then Vice-President of India in January 2010. The most recent was a high-level delegation led by George Chaponda, minister of foreign affairs and international cooperation, at the 3rd India Africa Forum Summit (IAFS) in New Delhi last October. This is a sure indication of the tight relations between the two countries. Some of the agreements signed:

  • MOU on Cooperation in the field of Agriculture and Allied Sectors (2010)
  • Protocol for Consultations between Ministry of Foreign Affairs of Malawi and Ministry of External Affairs of India (2010)
  • National Small Industries Corporation of India and One Village One Product of Malawi for cooperation in the development of small scale enterprises in Malawi (2010)
  • General Cooperation Agreement (2010)
  • MOU on Cooperation in the field of Mineral Resources Development (2010)
  • MOU on Cooperation in the field of Rural Development (2010)
  • MOU on Cooperation in the field of Health and Medicine (2010)
There are more than 100 Indian companies registered in Malawi. Indian companies in Malawi are engaged in agro processing, chemicals, energy, financial service & insurance, food processing, information technology & software development, logistics, textile, cosmetics & pharmaceuticals, mining, manufacturing, hotel & hospitality etc. The prominent ones are Bharti Airtel, Tech Mahindra, Hi Tos Linear Agency Pvt Ltd, Weismann Ltd, Tata, Mahindra, Godrej, Kirloskar, Ashok Leyland, TVS, and Bajaj Auto etc. In 2012, M/s Dhunseri Petrochem & Tea Ltd (DPTL) invested in Tea Estates in Malawi. According to the International Trade Center (ITC), Malawi exported $52,199,000 worth of goods to India in 2015, while India exported goods and services worth $237,723,000. Over the past number of years, Malawi has emerged not only as a rising star in terms of its compliance and commitment to regional and extra-regional standards on democratisation and human rights, but also as a conducive investment location. Malawi has become part of a huge regional market under the Common Market for Eastern and Southern Africa (COMESA) with over 400 million people and the Southern African Development Community (SADC) with over 200 million people, and recently a member in the tri-partite market, which collectively boats of approximately 700 million people, with an economy of $1.2 trillion. Under these arrangements, Malawi trades its manufactured products at very concessionary rates even up to zero-rated tariffs. Malawi's strategic location in the sub-African region makes it an ideal hub for investment location. With huge markets around it, like Tanzania to the north, Mozambique to the east and south, and Zambia to the west, Malawi offers an ideal production and distribution hub in the region. Though it does not have its own sea port, Malawi is “land-linked” to far markets through Dar-es-Salaam in Tanzania, where Malawi owns a dry port, and through Beira in Mozambique. Access to these ports is eased by modern bitumen roads deliberately built for heavy traffic. The investment climate within Malawi has over the years gotten better, with pro-investment reforms topping the agenda. For example, Malawi has liberalised the financial sector to allow other operators to invest in the sector. Similarly, the energy and other sectors that were previously controlled have been liberalised so that they can become more productive through private investment. Essentially, Malawi is a Greenfield investment environment. Relative to regional and extra-regional countries, the country offers an environment where industrial competitiveness is virtually low, therefore making it easy for new companies to invest without market penetration constraints. Investment opportunities exist in all sectors of the economy some of which are as follow:
  • Agriculture and Agro Processing Sector
There are various investment opportunities in agriculture including livestock production aquaculture horticulture, contract farming and agro processing. In agro processing opportunities exist to process fruits and vegetables into juices, sauces, washing liquids and disinfectants. The sector also offers opportunities for investors to invest in the following facilities
  • Cold rooms and relevant transportation infrastructure
  • Factories for value addition for fruits and vegetables, cotton ginning , yarn and textiles
  • Storage, cleaning and grading facilities
  • Large scale commercial farming
  • Manufacturing of cooling tanks and collection equipment ( milk churns)
  • Feed growing and production, hay production through growing of Rhodes grass
  • Service provision for livestock ; artificial insemination, operation of dipping tanks
  • Energy Sector
This industry is crucial as it supports other industries for sustainable economic growth and infrastructure development. A huge private investment is required to meet increasing energy demand for household and industry use. Hydro electricity fossils fuels and biomass are the most used energy sources in Malawi. Opportunities exist in the following areas:
  • Hydro generation distribution and transmission
  • Solar and wind energy
  • Fuel storage and oil pipeline facilities
  • Setting up thermal power plants
  • Manufacturing Sector
Most of the traditional agricultural crops such as tobacco, tea are exported semi processed state there are great opportunities for investors to convert these agricultural products into high value finished products. Investors may venture into light and heavy manufacturing.
  • Textiles and garment manufacturing taking advantage of market opportunities under AGOA and preferential bilateral agreements between malawi and south Africa would be a smart choice for investors
  • Manufacturing of Fertilizer and chemicals
  • Manufacturing of construction products such as cement
  • Manufacturing of products from waste such as paper, toilet tissues, facial tissues etc
  • Light manufacturing; Malawi imports most of its required household electrical fittings i.e. cables, plugs switches and engineering materials steel based products. Investors are therefore invited to invest in this sector to reduce current imports and save foreign exchange
  • Mining Sector
Malawi is naturally endowed with vast unexploited mineral resources; currently mining is limited to coal mining, quarrying, limestone production and gemstone mining. The sector is offering the following opportunities
  • Tourism Sector
Malawi is endowed with beautiful and unique tourist sports including Lake Malawi, national parks and game reserves and cultural historical sites. These offer investment opportunities for business and leisure tourism projects
  • Eco tourism
  • Hotels and camps
  • Water and lake sports
  • Casinos and entertainment centers
  • Theme parks
  • Conference facilities
  • Wilderness safari, travel and torus
  • Infrastructure development
Infrastructure is an essential driver of competitiveness which is critical for ensuring the effective functioning of any economy and the country has basic reliable infrastructure in terms of; airports, road networks, railway lines, energy generation and transmission installations and telecommunication infrastructure.
Joshua Nthakomwa is the Director of Investment Promotion and Facilitation are the Malawi Investment and Trade Center.
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