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Chakwera, Nyusi relationship bears fruits, Mozambique gives free land for cargo handling facility at Nacala

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By Linda Kwanjana

On 21 April, 2021, President Lazarus McCaryhy Chakwera left Lilongwe for Maputo for the Southern Africa Development Community (Sadc) Extraordinary Double Troika Summit which was organized to seek a lasting solution to the Islamic
insurgency in Mozambique.

After the meeting Malawi President Dr. Chakwera and his Mozambican counterpart Filipe Nyusi agreed to strengthen their cooperation with a special focus on trade, security, transport, energy, and diplomacy.

The agreement heralds a new dawn for Malawi and Mozambique, which have been at a spat over decades.

Nyusi and Chakwera


The spat got worse during the time of late President Bingu Wa Mutharika when Malawi was trying to find a direct route to the Indian Ocean through the Shire-Zambezi Waterway
Project.

Since Chakwera visit to Mozambique, Malawi has enjoyed direct and indirect benefits.

One of the such many benefits is that Maputo has granted land at Nacala Port for Lilongwe to build its own infrastructure to handle cargo.

“This is very true. President Felipe Nyusi granted a plot to His Excellency Lazarus Chakwera in Nacala in which Malawi should develop facilities for processing of liquid and dry cargo,” confirmed Alfonso Chikuni, Malawi’s Secretary for Energy.

“We are visiting the plot tomorrow [today],” he added in an interview yesterday.

It is a diplomatic groundbreaking development that not only strengthens the two countries’ bilateral ties, but could also help Malawi cut transport costs and reduce prices of goods, including fuel, fertilisers and other imports.

The development could also boost Chakwera’s strong standing on foreign policy for pulling off a feat that five of his predecessors failed, including the late Bingu wa Mutharika whose Nsanje Inland Port dream turned into a nightmare after diplomatic missteps with Maputo.

“This has not happened by accident. It has happened because relations between Malawi and Mozambique have improved tremendously over the last three years,” said Malawi High Commissioner to Mozambique Wezi Moyo in an interview this week.

She added: “From the word go, President Chakwera was very intentional about improving relations with Maputo, so he put a lot of attention on Mozambique.

“He has travelled to this country more than any other Malawian President. Those efforts have now started bearing fruits for us Malawians.”

On the Nacala land, Lilongwe plans to build a version of Malawi Cargo Centre (MCC) in Tanzania.

Under the Malawi-Tanzania Corridor Transport System Agreement, Malawi was granted land to lease in Dar es Salaam and Mbeya where an inland port and port handling facilities were constructed and installed to facilitate movement of goods destined to or originating from Malawi.

The facilities are designed to handle both dry and wet cargo and include rail sidings, rolling stock, locomotives, warehouses, cargo handling equipment, fuel farms, fuel pipelines and housing, among others.

The facilities operate as independent units and are collectively known as Malawi Cargo Centres.

Malawi Cargo Centres Limited (MCCL) was established to manage, promote and market the assets and facilities of the MCCs. They operate as dry ports where they are a one-stop shop for the clearance and consolidation of goods. Within the premises of the MCCs are customs officials while MCCL acts as clearing and forwarding agent.

Government will have to decide on the Nacala facility’s operating model, whether to go for a public-private sector partnership or set up a fully-fledged State enterprise to optimise the direct port-rail link that Nacala provides to Blantyre and later to Lilongwe through Liwonde.

National Oil Company of Malawi (Nocma) director of operations Micklas Reuben said in an interview that the parastatal will take the lead in moving goods, fuel in its case, from Nacala via rail, having already identified Geneva-based Augusto Energy to lift 83 000 tonnes (196 million litres) of fuel through Nacala.

As a starting point, he said Nocma is currently processing 2.5 million litres in roughly 56 wagons from Nacala to its depots at Matindi in Blantyre.

“Since our rail can support 16 wagons, it means that we can offload the 56 wagons carrying 2.5 million litres within a week,” Reuben said, emphasising the efficiency of the Nacala route.

Filomene Bene, a senior executive at the Mozambique company CFM that runs railways and ports, urged Malawi to diversify port usage to Nacala because unlike Beira, which they also manage, Nacala is not very busy.

In addition, she said, Nacala’s harbour is so deep that it does not require the constant dredging that Beira, the current port of choice for the Malawi market, needs.

Ministry of Mining hosts NSF-GeoPRISMS Southern East Africa Rift System workshop

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By Andrew Mwanandiye Tembo

To enhance global collaborative efforts in education and outreach of scientific results and implication for regional hazards due to continental rifting in the southern East of Africa, Ministry of Mining together with other international universities have organized a workshop in Blantyre. 56 Earth Scientists from 14 countries and 4 continents are discussing and debating mechanisms of continental breakup in East Africa

The four day workshop taking place in Blantyre commenced on 25th July and will finish on Friday the 28th. The workshop is aimed at strengthening interdisciplinary and international collaborations to facilitate the formation of new collaborations, particularly for early-career scientists mostly students in geosciences.

Kondwani Dombola-Deputy Director,Geological Survey Department, Zomba,Mw

Through the workshop which is called Southern East Rift System (EARS), Malawi Geological Survey Department under Mining ministry, University of California, Darvis and Woods Hole Oceanographic Institution will synthesize recent scientific results on continental rifting in the (EARS)and discuss future projects and foster new collaborations.

Speaking in an interview, Deputy Director for Geological Survey Department in the Ministry of Mining Kondwani Dombola said it is high time communities understand the concept and map a comprehensive future towards changes in the environments.

“Over the past 10 years, a number of new scientific studies focused on the weakly extended and magma-poor southern part of the EARS have emerged a provision of new and surprising insights into the onset of continental breakup” Said Dombola. He went further to say scientists from Africa, United States and elsewhere will share and synthesize the results of these recent studies to achieve a more comprehensive understanding of continental stretching and associated hazards in the southern part of the East African Rift System”

Representing the international participants, Lecturer from Northern Arizona University (NAU),Donna Shillington commended the organizers for the workshop citing the interactions and attendance as positive in bringing awareness to general public.

“I am happy to see a large number of the participants in the workshop, this is a good and it is so courageous ,we have met a lot of people from African countries and others outside Africa ,this has given us hope for a collaborative positive outcome” highlighted Professor Shillington.

According to the results of various studies in regions, Malawi Rift System is located towards the ends of the magma poor in the western branch of East Africa Rift System (EARS), hence contributions from scientists working on other parts of the EARS and other rifts globally, also counts our mother land.

Professor Donna Shillington-Lecturer Northern Arizona university (NAU)

NBS Bank, Prison Service partner for convenient service offering

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By Linda Kwanjana

NBS Bank Plc and Malawi Prison Service (MPS) have signed a Memorandum of Understanding (MoU) that will see officers from the service accessing various services from the Bank conveniently.

Speaking on the MOU signing whose ceremony was held at Prison Offices in Zomba on Monday, NBS Bank Acting Cluster Manager Southern and Eastern Region Andrew Kambalame said the partnership is aimed at easing processes for the officers to access NBS Bank loans.



“It is about us offering loans with flexible terms to members of Malawi Prison Service where they will access better services with tailored solutions for them. The agreement will ease the process to access the loans, from application to the release of the funds to ensure they are spending less time for their financial transactions.”

“We are also offering financial literacy services to them. So, the officers will have an opportunity to have a financial advisory on what they can do with the finances or how best they can utilize their finances with NBS Bank,” said Kambalame.

He further indicated that the officers would be able to access the ‘Easy Civil Account’ which is for civil servants, Smart Finance which offers the officers a chance to access goods and services such as iron sheets, building materials, electronics, among others from particular companies that are in partnership with NBS Bank.

MPS Commissioner General, Masauko Wiscot commended NBS Bank for formalizing the partnership which he said has existed for a long time.

“We have been in partnership for a long time only that it was not formalized. NBS Bank has given out loans to our officers, but we missed this link where the partnership was supposed to be formalized.”

“This is a very significant step because our officers used to struggle to access Bank loans, but looking at the spectrum of services that NBS Bank is offering our officers, it will also offer them a chance to plan for their retirement. We have had problems with our officers retiring without proper homes.,” explained Wiscot.

The officers will also be able to access vehicle financing as well as mortgages from the Bank, according to the MoU.

RBM hikes policy rate to 24%

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By Chisomo Phiri

The Malawi’s central bank, the Reserve Bank of Malawi (RBM) has announced adjusting upwards the policy rate by two percentage points from 22 percent to 24 percent.

A policy rate is the rate at which commercial banks borrow from the central bank as lender of last resort.

However, as a key driver of interest rates on loans, the decision will have ripple effects as commercial banks will likely implement reciprocal adjustments to the price of loans.

Reserve Bank



In a statement published on Friday, RBM Governor Wilson Banda said the Third Monetary Policy Committee (MPC) Meeting revised upwards the policy rate by 200 basis points as price pressures have intensified, such that inflation is projected to remain substantially above the medium-term target for longer.

Practically, the decisions mean that the RBM is trying to reduce money supply in the economy by increasing the cost of borrowing.

This comes at a time authorities are battling a high inflation rate recorded at 27.3 percent as of June, according to National Statistical Office (NSO).

Of Shared Interest Partial Credit Guarantee

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By Linda Kwanjana

Shared Interest’s Partial Credit Guarantee is a Game Changer for African Businesses
US-based nonprofit guarantee fund is dedicated to supporting black female entrepreneurs and small businesses
MALAWI, Africa, June 18, 2023 .

Entrepreneurs need financial resources to start, expand and innovate their businesses. However, a 2018 World Bank report revealed that merely 13% of small businesses in Malawi have access to formal financial services.

Consequently, a significant portion of the entrepreneurs leading small businesses lack access to credit. The report further reveals that women, rural entrepreneurs, and individuals involved in the agricultural sector are disproportionately disadvantaged in terms of financial inclusion.

The primary reason behind this exclusion is the lack of assets typically required as loan collateral among small businesses in Malawi.

This is why organizations like Shared Interest, a US-based nonprofit guarantee fund, are dedicated to helping black women entrepreneurs and other small and medium-sized businesses.



They provide these businesses that are leading the way in driving innovative solutions for agribusiness, women’s entrepreneurship, green jobs and inclusive housing with credit guarantees.

A credit guarantee is a financial arrangement in which a third party, often a financial institution or government agency, assures a lender that a borrower will repay a loan.

They are typically used to support lending to small and medium-sized businesses, along with other borrowers who may lack sufficient collateral or credit history to qualify for a loan independently.
Dorcas Onyango, the Global Director for Programs, Shared Interest said, “Shared Interest unlocks local resources for entrepreneurs who can drive entrepreneurship, job creation, community well-being, and national economic growth and development.

In 2020, we guaranteed a loan of US$ 459,000 from Malawi Agriculture and Industrial Investment Corporation (MAIIC) to Lenzimille, an animal feed producer, to set up a fish meal production facility in Blantyre that has potential to contribute to increased earnings by soya and maize farmers who will provide inputs well as to import substitution.

Shared Interest offers partial credit guarantees, covering up to 75 percent of the loan. The terms of the guarantee, including the amount, duration, and the circumstances that would activate it, are negotiated with the lender and specified in a formal agreement.

Shared Interest is encouraging and enabling lending to small businesses in Malawi, with a focus on black female-owned enterprises that may have been deemed high-risk. In 2022, Shared Interest offered FDH Bank and MAIIC a partial credit guarantee of US$1,000,000 each.

For credit guarantees to be most effective, businesses must be operating at their best. Shared Interest goes the extra mile by offering technical assistance to both lenders and borrowers.

They help lenders build their knowledge in SME banking while assisting small businesses in adopting strategies that reduce perceived risks. Recognizing the breadth of challenges that emerging entrepreneurs face,Shared Interest collaborates with other organizations that offer complementary support programs to assist small businesses in scaling their enterprises and increasing their community impact.

Shared Interest’s work in Southern Africa, including Malawi, is made possible thanks to the support of many impact investors and donors based in the US including faith based communities, corporate foundations and individuals.

These organizations provide the necessary resources to back up a letter of credit issued by CitiBank on behalf of Shared Interest.

Locally, its ability to reach and assist eligible small businesses is strengthened through partnerships with lenders, civil society organizations, and umbrella bodies. For example, The Joyce Banda Foundation is empowering women with the needed skills and information to start and manage businesses. Eligible entrepreneurs may benefit from the availability of loans guaranteed by Shared Interest.
After signing a credit guarantee agreement, the lender can proceed with processing loans and disbursing funds to eligible borrowers who can generate the impact desired by the guarantor and impact investors. Should the borrower default on the loan, the lender can seek reimbursement from the guarantor by filing a claim to recover the outstanding amount. Provided the lender meets the conditions stated in the guarantee agreement, the guarantor will make a payment to cover the remaining balance.

Credit guarantees require ongoing monitoring of the loan portfolio and reporting of borrowers’ financial performance to minimize risk for the guarantor.

Shared Interest engages local SME banking experts to evaluate borrowers’ creditworthiness, track loan portfolio performance and the social impact of the guarantee since its primary goal is to maximize community impact by scaling and strengthening profitable businesses that can deliver measurable social value as part of their core model.