MALAWI AGRICULTURE INVESTMENT OPPORTUNITIES

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MALAWI AGRICULTUREINVESTMENT OPPORTUNITIES

• Presented to the Gathering of Africa Project
  Access( APA-A) Business Briefing, BASF Offices,
  Midrand
• Vincent Nkhoma
• Vice Consul (Investment Trade)
• Malawi Consulate General- Johannesburg

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Where We Are
2 hrs Flight to Johannesburg from either Lilongwe
or Blantyre
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Malawi Key Statistics

• Land Area 118,485 sq km
• Population 13.1 million
  (Dec. 2008 census)
• Inflation Rate 7.2 (2009)
• GDP Per Capita US 313 ( 2008)
• GDP Growth 7.9 (2009)
  9.7 (2008)
• Urbanization Rate 23 (2008)

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What We Have Achieved The Last 5 Years

• GDP GROWTH RATES

Surplus production in agriculture has been the
major thrust to sustained income growth above
the 6 average regional aspiration.
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Achievements contd
Individual incomes have benefitted from
this agriculture miracle
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Achievements contd

• Inflation Rate Easing

Low food prices have helped reduced the
Inflationary pressure on the basket of
necessities
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Agriculture Sector in the Economy
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Agriculture Cont.

• Major sector of Malawi economy
• One of the identified key growth areas in Malawi
  Growth and Development Strategy, and The Nine
  Priority Sectors for Addressing Poverty
• Contributes to
• -gt 39 of GDP
• gt85 of current employment
• gt70 of export revenue
• By implication, the major sector to addressing
  poverty and ensuring social economic development

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Agricultural System

• Smallholders accounts for 80 of food production
  and 65 of Agriculture GDP
• Subsidy programme has stimulated output over last
  4yrs- (2mn tonnes maize surplus in 2009)
• Estate sector contributes 20 of Agricultural
  production dominated by Tobacco (60), tea (20)
  and sugar (18) of estate land

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Existing Challenges

• Heavy reliance on rain fed farming by the
  dominant smallholder sector
• Inadequate agricultural related finance schemes
• Underdeveloped public private partnerships in
  promoting agricultural value chains
• Inadequate capacity and skills in agribusiness
  practices
• Low levels of value addition to agricultural
  products
• Low access to market information especially by
  rural farmers
• High post harvest losses estimated at 40 due to
  poor handling, storage and high transportation
  costs
• Limited infrastructure especially in rural
  communities

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Government Interventions

• Subsidy programme to stimulate productivity
• Infrastructure development targeting the
  transportation (inland port and waterway roads,
  rail), storage facilities, rural
  telecommunications, etc
• Institutionalized public private sector
  partnerships in development agricultural sector
• Tailor made incentives towards encouraging
  investment in the agribusiness sector

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Why Consider Investing In Malawi Agro Sector

• Country endowed with rich arable land, large
  masses of fresh water
• Agro friendly climatic conditions that accepts
  almost all kinds of tropical crops such as maize,
  tobacco, tea, coffee, cotton, rice and sugar with
  potential for expansion and value addition
• Emerging potential for production and value
  addition to crops such as cassava, macadamia,
  paprika, groundnuts, etc.
• Huge potential for livestock production for meat
  and dairy, and poultry
• Huge potential for aquaculture utilising the rate
  tilapia species we have in Lake Malawi and other
  lakes
• Availability of steady and experienced work force
  in the sector
• Availability of steady domestic, regional, and
  international market outlets

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Green Belt Initiative
Green Maize Field. Insert (Lake Malawi) Pics AFP
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What It Entails

• Nationwide irrigation project along lakes and
  major rivers
• Presently only 2 of the land is irrigated
• Areas lying 10-20km away from water sourced to be
  irrigated using pumps, canals or dams
• Aim to grow all kinds of crops to feed the nation
  and to export
• To encompass both smallholder farming communities
  as well as large commercial farmers
• Scope of greenbelt is broader and includes
  tourism, aquaculture, infrastructure development,
  etc

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Utilising Abundant Water Resources
Almost one third of the country is covered by
perennial water sources ideal for irrigation Aim
at utilising the land, water, people, flora and
fauna, resource-based advantages, to promote a
green revolution
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Specific Objectives

• Increase production and productivity for crops,
  livestock and fisheries
• Increase agricultural exports
• Increase diversification and improve knowledge
  and operations of small-scale and large-scale
  farmers
• Improve value chain linkages and operations
• Increase private sector participation in
  agricultural production
• Add value through processing of raw materials
  and
• Create rural growth-centres along the greenbelt
  corridors.

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Basking in Green Revolution
Malawian Girl Showcasing the Fruits of
Irrigation. Pic BBC
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Components (Value Chain)

• Irrigation Development and Rehabilitation
• Credit financing
• Natural Resource Management
• Research-Based Technology Development,
  Dissemination and Utilisation
• Capacity Building and
• Infrastructure and Market Development.

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Where You Come In

• Initiate irrigation farming in selected target
  areas utilising modern irrigation technology
• Initiate mechanized farming methods and extend
  the same to surrounding communities
• Install modern storage facilities to minimize
  post harvest losses or initiate grain banking
  systems i.e. steel and plastic silos for
  fertilizer and farm produce storage
• Set up private agricultural research institutions
• Bring to the country and utilise small scale agro
  processing technologies
• Initiate modern fish farming techniques to
  minimize pressure on current stock in lakes and
  major rivers
• Market linkages to create ready market for the
  produce and encourage sustainable production

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Cont..

• PPPs in extension service delivery, management
  support, technology development and transfer
• Investment in export management catering for
  cooperatives and SMEs
• Establishment of phosphate fertilizers
  manufacturing plant to initiate local production
  of the commodity and meet the requirements of the
  huge farming community in the country
• Invest in multi purpose dams which could also
  carter of power generation for the farming
  operations and surrounding communities
• Establishment of cotton ginning plants to
  stimulate production and value addition to local
  cotton.

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This Has To Be Sustained
Plenty Maize in 2008/09 season. Pic BBC
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Public Private Partnership

• Government is Committed to Promoting PPPs
• legally enforceable contract between the public
  sector and private sector,
• requires new investments by the private
  contractor (money, technology, expertise/time,
  reputation, etc.)
• transfers key risks to the private sector
  (design, construction, operation, etc.),
• payments are made in exchange for performance,
  for the purpose of delivering a service
  traditionally provided by the public sector.

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Phases of PPP Guidelines Organization
Phase 1 PPP Project Initiation, Screening,
Selection
Phase 2 PPP Feasibility Analyses
Proposed Risk-Allocation Structure
Phase 3 PPP Tendering Procurement
Phase 4 Final PPP Contract Signing
Financial Closure
Phase 5 Post- Award PPP Performance Monitoring
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Conclusion

• Smallholder farming has driven the Malawi agri
  sector over the last years
• Business oriented agriculture essential to
  complement these successes
• We have in place an enabling environment to
  ensure smooth return to investments in the agro
  value chain

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• THANK YOU SO MUCH