Chakwera’s Administration facilitating establishment of industrial parks to achieve massive industrialization

An industrial park in Mumbai

Maravi Express

President Lazarus Chakwera says his Administration is facilitating the establishment of several industrial parks across the country — in Lilongwe, Blantyre and Mzuzu — to achieve massive industrialization, with feasibility studies already done for two of them.

He said this today at Parliament during his State of the Nation (SONA) address, saying this was towards the achievement of his Administration’s priorities of wealth creation, job creation and food security.

He announced that the total estimated investment is US$956 million, which will result in the creation of at least 240,000 direct jobs and apart from growing the country’s export base, these industrial parks will provide a steady market for smallholder farmers.

“Our target is to have all processes done in time for construction to begin in December 2022. Following the review of tax measures for manufacturing in the 2021/22 National Budget, manufacturers in the beverage sector increased their productive capacity through refurbishment of factories which were on the verge of collapse.

“New companies were also set up for the production of milk and yoghurt, water, leather products, and juice. As our efforts to industrialize continue, our desire is to support small scale processing and value addition activities by rural communities.

“In the 2021/22 Financial Year, Government supported a number of projects in Mzuzu, Dowa, Mzimba and Lilongwe by connecting them to the electricity grid, paying for construction and installation works, and providing machinery.

“These rural factories have increased the wealth of 1,200 families and 1,000 entrepreneurs by 50% and created 15,000 permanent jobs. A total of 37 cooperative societies were registered during the year, engaged in various economic activities while 53 potential groups were trained in readiness for registration.

Going forward, Chakwera said in the 2022/23 Financial Year Government will develop regulations for operationalizing the zones, as well as develop and promote steel production, initially using scrap metal.

“We will also organize an Industrial Indaba for the Manufacturing Industry and establish an Industrial Research and Innovation Centre.

“Madam Speaker, on the trade front, Malawi’s trade in goods and services contributes 58% to GDP. Sadly, out of this, imports contribute 43.4% while exports contribute a paltry 14.6%, which is a trade deficit we are working to reverse. That deficit stood at US$1.29 million by the third quarter of 2021.

“The main imports for Malawi are mineral fuels and oils, pharmaceutical products, machinery, vehicles and fertilizers, whereas the basket for main exports comprises the traditional commodities of tobacco, cane sugar, tea, and coffee, although oil seeds and edible nuts are becoming more prominent.

“Although Malawi has many market opportunities that can be exploited, its export markets are highly concentrated in two regions, namely the European Union at 36.5% of exports and COMESA and SADC Region at 39%.

“It is therefore high time we also pursued emerging markets in Asia, especially India and China, which import 14% from Malawi, and the USA, currently importing 6%. In an effort to reverse the trend of perennial trade deficit, Government launched the National Export Strategy II in December, 2021, whose target is to increase exports to 20% of GDP from the current 14.6%.

“This will require the annual export growth rate to double to at least 5.6,” said the President adding that “during the Financial Year 2021/22 Government signed Memoranda of Understanding (MoUs) with the Republic of South Sudan to access a market worth US$295 million, and with the Indian Government on Export of Pigeon Peas to export 50,000 metric tonnes of pigeon peas annually for the next 5 years.

“Government also signed a reviewed Bilateral Trade Agreement and an Agreement on One Stop Border Post (OSBP) with the Republic of Mozambique to promote and facilitate cross border and transit trade at the borders between the two countries.

“Export deals of soya beans worth 157,684 metric tonnes valued at MWK83 billion to various countries, including China, were also facilitated.”

He also said Malawi attended the Intra Africa Trade Fair (IAFT) in Durban, South Africa in November 2021, where it recorded US$418.6 million worth of export inquiries from the Region.

“Elsewedy Electric, an Egyptian Multinational Company, signed a Memorandum of Intent (MoI) to bring flagship investments to Malawi in various sectors worth US$1 billion.

On energy, the President said productivity within the country’s economy can only increase to the level that can be able to provide the energy for it — “that is why in the energy sector, we set a target to add a further 1,000 MW to the grid from various sources by 2025”.

“I am happy to report that in the 2021/22 Financial Year, the installed capacity of electricity rose from 364MW to 617.1MW, following the launch of Tedzani IV Hydro Power Plant in which a 52 million dollar Grant from Japan and MWK6 billion from Malawi Government were invested — JCM Solar PV Project, and Mloza Small Hydro Power Project constructed and operated by Cedar Energy Ltd.

“A 26MW bi-face Panel Solar PV Power Plant in Dedza, Golomoti will also soon be launched, which will bring us within less than 100MW of meeting the current demand of 795MW.

“On the back of these strides, ESCOM Ltd has increased access to electricity from 11.4% to 12.4%. This is set to continue rising because my Administration finished drafting the Free Electricity Connection Guidelines due for implementation next year.”

He went further to say in the 2022/23 Financial Year, Government will continue implementing existing projects, including the 350MW Mpatamanga Hydro Power Project; and the 200MW Malawi – Mozambique Interconnector Project.