Growing Sustainable Business - Malawi
In an effort to strengthen its capacity to facilitate investment, the Malawi Investment Promotion Agency (MIPA) is implementing the Growing Sustainable Business (GSB) programme with support from the United Nations Development Programme (UNDP). In line with the Government of Malawi's strategy of poverty reduction through sustainable economic growth, the GSB programme aims at attracting pro-poor investment and business to Malawi, thereby bringing new employment opportunities and needed goods and services to the poor.
GSB Activities
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Engaging leading investors and prospective investors in dialogue to come up with projects that will help reduce poverty.
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Facilitating feasibility studies for pro poor projects.
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Linking leading and prospective investors to banks, donors and other financial institutions for funding of their projects especially if they have funding shortfalls.
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Working with investors to overcome challenges and problems facing their projects.
The GSB programme consists of two components:
1. Facilitating pro-poor investment to the country
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The GSB Broker, assists MIPA in identifying pro-poor investment opportunities, developing innovative business models, brokering partnerships between key stakeholders on selective projects, and marketing those projects to both local and international investors.
2. Building capacity at MIPA
MIPA's capacity to promote, attract and facilitate investment will be improved through the adoption of best practice standards in its business information/investment resources, communications/outreach, and investment service activities. -
In addition, a GSB Project Development Analyst assists MIPA in developing feasibility studies, business plans, and company profiles;
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while a Business Development Analyst assists MIPA in carrying-out industrial audits and facilitate industrial linkages between large companies and SMEs.
It should be noted that the GSB programme is a global initiative. While new to Malawi, GSB is currently operating in nine African countries, including neighboring Tanzania, Zambia, and Mozambique, as well as nine countries in Central America, Asia, and Eastern Europe with ambitious plans for expansion. The global initiative has facilitated a large number of investments, ranging from rural telecommunications to the provision of finance for small and medium size enterprises. The global GSB portfolio includes investments ranging from US $200,000 to US$23 million.
The programme was introduced to Malawi in February 2007.
GSB Investment Opportnunities
Viable opportunities
The GSB project facilitated feasibility studies in five areas namely Cassava Starch production, Cage fish farming, Malawi Coffee, ICT for Rural Areas, and Ethanol Cook Stoves. All but Ethanol Cook Stoves were found to be viable. GSB is inviting investors to start projects in these four viable areas.
The Warm Heart Food Company intends to start Cassava Starch Factory in Lilongwe and total project cost is US$7,000,000. The promoters are looking for either partners or loans/ grants to start this project. This cassava processing facility intends to produce 35,000 tons of high quality starch annually and once operational, it will enable around 11,000 small holder farmers to be suppliers and create additional revenue of between USD 800 and USD 1200 per hectare of cassava grown. If implemented, the project will help reduce poverty by creating employment opportunities and will provide market for cassava grown by smallholder farmers
The Maldeco Fisheries is involved in Cage fishing. GSB has been working with the company to support small fish farmers to raise fish in their ponds.The project is estimated to be rolled out to about 12,000 communities providing them with a sustainable source of nutrition and increased income.
It was realized that the small fish farmers did not have reliable markets for their fish and even the type of fish they were raising had poor yield. So in this project, Maldeco is expected to provide fingerlings to the farmers and even provide them with appropriate feed for the fish. Then the farmers will be selling the fish to Maldeco for resell in its market outlets. They are looking for a suitable joint venture partner to finance the expansion component and to provide technical expertise that will provide high quality fish products.
- Malawi/Mzuzu premium coffee- Mzuzu Coffee Planters Union
There is ready international market for coffee beans but prices are very low at US$3/Kg and they export 300 tons per annum. In this case, they don’t cover all costs but they say if they increase production and export 500 tons per annum, they will be able cover all costs and make profits. The only problem is the production capacity of the Union. The other way is to export processed coffee whose price is at US$8/Kg. In that way, they will be able to make profits with the same 300 tons per annum.
They have the processing plant but they don’t have packaging machinery. They would like to acquire this machinery. They also pay duty on packaging materials which are imported so they have asked GSB/MIPA to assist them import these duty free by facilitating the process of duty exemption. GSB has already facilitated submission of application to Malawi Revenue Authority for exemption of duties. The Union set up a microfinance fund for input loans to their 4000 members (smallholder coffee farmers) but they don’t have enough funds to meet demand for the loans. They are looking for funding for the Microfinance programme in order to meet members requirements.
- Information and Communication Technology for Rural Areas
GSB is looking for telecommunication companies who are willing to roll into the rural areas.Interested companies can contact the GSB Broker or contact Malawi Investment Promotion Agency (MIPA).
Other Potential Investment Opportunities
- Water Purification and Bottling
GSB intends to undertake feasibility study in the area of water purification and bottling. There are natural springs in Chikala Hills and Mulanje Mountain which can be utilized to produce safe and affordable bottled water. Household water purification will also be explored. This will enable households to purchase simple water purifying machines that can purify any water be it from a river or any source.
Two entrepreneurs have joined hands to start a milk processing plant at Mkopola in Mangochi district. This project will ease shortage of milk and milk products in Mangochi and cases of malnutrition will be greatly reduced. The project would like to supply milk and milk products to a school feeding programme in the area which is being implemented by various donors. The owners have already submitted a project proposal to GSB. The total project cost is estimated at US$1,000,000. They are looking for funding in form of loans and/or grants. Partners can also join them.
Wid Fruit Juice - Village Hands Company Limited
This company evolved out of a project that was funded by GTZ at Kamwamba in Neno. The Wild Life and Environmental Society of Malawi ( WESM ) initiated this project after realising that people were wantonly cutting trees for charcoal, so the project gave alternative income generating activities to the people in the area. Such activities included Bee Keeping, Baobab and Tamarind Fruit Juices. After the Project phased out in 2006, people in the area thought of sustaining the activities of the project , so they started a company called Village Hands Company Limited whose shareholders are people in fourteen Villages at Kamwamba in Neno. So people pick baobab and Tamarind fruits and sell to the company. They also sell honey to the company. The juice and honey have already been certified by Malawi Bureau of Standards and are being sold in many supermarkets in Malawi but it is unable to satisfy demand as production is done manually.When the company makes profits, the villagers get dividends at the end of the year. The company is looking for US$100,000 to acquire machinery and boost production. Partners can also come in and add capital to the company which has potential to grow.
For more information on these projects, please contact:
GSB Broker, Jewel Ndalama
Phone: (265)01 770 808 / 09 225 402.
Email: jewel.ndalama@undp.org or jewel@mipamw.org
For additional information on GSB please visit the global GSB website: www.undp.org/business/gsb/
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