MALAWI MALAWI’S FINANCIAL MAGAZINE OF CHOICE VOL 24 / 2021
Could there be an end to SMEs woes? Will we ever shake hands again?
Mindset Change; a catalyst for growth
Phillip Madinga At the helm of Standard Bank
The Malawi Banker Magazine | Vol 24, 2021 1 2 The Malawi Banker Magazine | Vol 24,2021 CONTENTS In this issue 20 Could there be an end to SMEs woes? 16 World Bank figures show that in Malawi, micro, small and medium enterpris- es (MSMEs) constitute 60 percent of businesses, providing jobs to 1.6 million people. 25 Mindset Change; a catalyst for growth
Despite all the incentives to boost Wobbling to attain foreign trade, most of Malawi’s exports are raw. middle-income status
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Features
26 The politics of development 28 On attracting FDIs, Malawi’s 35 potential 68 30 Financial sector; conduit for development 32 Widening development chances through policy 36 Will we ever shake hands again?
The Malawi Banker Magazine | Vol 24, 2021 3 CONTENTS
Editor’s Note
very warm welcome aboard In their massages, both the this edition of your favourite Bankers Association of Malawi A Malawi Banker Magazine. President and Chief Executive Officer discuss timeliness of the It is with gratitude that we welcome theme and the essence of mind- you to this edition of the Malawi Banker set change among Malawians. Magazine. They further examine the banking sector’s preparedness and how At the onset, join us in congratulating it is systematically positioned one of Malawi’s seasoned bankers, to play a pivotal role in ensuring Phillip Madinga, for ascending to the creation of wealth for all and helm of Standard Bank Malawi. We share sustainable national economic with you his dreams and aspirations in growth. this edition. As depicted in most write-ups, This publication comes as the country for many years, Malawi has been has just drawn a new long-term grappling to eradicating poverty. development blueprint, the Malawi What does government need to do to 2063, with a resolve of becoming an We therefore, discuss fundamental set the tone in creating a conducive inclusively wealthy and self-reliant pillars of which include but not environment and offer the much- upper-middle-income economy. limited to hard work and a multi- desired policy direction? What is the sectoral approach towards national role of the private sector? How could Therefore, there could never be any development. commercial banks and other financial better time than now, for Malawians to services institutions be best-positioned More importantly, attaining this dream change their discourse; from merely as a financing window in the process? would also take a shift in perception, aspiring to eradicate poverty to acting How about NGOs and faith-based approach to business and mindset organisations; what role would they towards creating sustainable wealth for change. all. have to play? And the masses; what is This edition, therefore, attempts to expected of the public? Yes, the best time to change the discuss necessary parameters needed These and various other questions development narrative from ‘poverty if the country is to attain its aspirations would help in coining the narrative. reduction’ to ‘wealth creation for all’ is of Creating Wealth for All. now. It would discuss the alignment of tasks Enjoy! This auger well with theme of the and responsibilities to be earmarked by Magazine; Embracing Mindset Change: the various entities and sectors of the Have a Nice and Productive Reading! a Step towards Wealth Creation for All. economy to ensure that every entity Paul Kamanga plays their rightful role: Editor-In-Chief
On the cover Malawi’s financial Malawi Banker Magazine magazine of choice engages the STAY IN Chief Executive Officer for FOCUS Catch the very latest and trending Standard Bank, With the Malawi Banker Magazine insigths into the business and Phillip Madinga for details banking sector in our publications. regarding his appointment to the new role
EDITORIAL TEAM EDITOR IN CHIEF: PAUL KAMANGA. DESIGN CONSULTANT: FUNSANI JOHN SCANDER | k: [email protected] SECRETARIAT: CHIFUNDO MMANIWA +265 (0) 999 562 451 | k [email protected]
4 The Malawi Banker Magazine | Vol 24,2021 #StaySafe
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The Malawi Banker Magazine | Vol 24, 2021 5 MALAWI BANKER BANKERS ASSOCIATION OF MALAWI 2021 COUNCIL MEMBERS
MACFUSSY KAWAWA KWANELE NGWENYA ZANDILE SHABA 1ST VICE PRESIDENT PRESIDENT 2ND VICE PRESIDENT
LYNESS NKUNGULA DR. RAYMOND FORDWUO DR. ELIAS NGALANDE JACO VILJOEN SECRETARIAT ECOBANK FDH BANK FIRST CAPITAL BANK
Movements in BAM In the recent past, some banks effected some changes in their top managerial, moves which were also reflected at the Bankers Association of Malawi. Some of the changes include: • In August 2020, Ecobank Malawi announced the appointment of Ghanaian banker, Raymond Fordwuo, as its new Managing Director. He replaces Charles Asiedu who was deployed to neighboring, Tanzania on a similar position. JEAN RENE’NGANDO PHILLIP MADINGA MIKE CHIWALO • In December 2020, the Board of Directors of Standard Bank Malawi appointed Phillip FIRST DISCOUNT HOUSE MOUKALA STANDARD BANK Madinga, a seasoned banker, as the bank’s CDHIB new Chief Executive. He takes over the mantle from William Le Roux. • First Capital Bank appointed Jaco Viljoen as its new CEO. He was previously CEO of First Capital Bank, Botswana, a position he had held since November 2013.
6 The Malawi Banker Magazine | Vol 24,2021 The President’s Message
anking, as a component of the financial services sector, is B fundamentally, one of the key anchors of the economy. Everywhere across the globe, a strong and resilient financial sector points to a stable economy, propelling industry activities and inducing growth, as it largely feeds into almost every other sector. Hence, commercial banks and other financial institution have stringent rules, regulation and requirements to follow, and are always under the radar of the regulator, in our case, the Reserve Bank of Malawi, to ensure that they remain afloat. Even in determining its monitory policy direction, the central bank is always cognisant of the fact that its dictates should lean towards propelling sustainable growth that would facilitate creation of wealth for all. Ensuring that borrowers have access to cheap capital is one of the Suggestions points to mind- performance in the agriculture sector pinnacles of a sound monitory policy, set change among Malawians to be puts in jeopardy the vibrancy of the pointing towards encompassing a espoused by a shift of the economic manufacturing sector as the former majority citizenry into financial activ- growth narrative; ‘from poverty reduc- supplies most of the raw materials for ities which collectively, should push tion’ to “wealth creation for all.’ industrial production. individuals and corporates to feed into This edition then, creates a platform Any interventions to grow the the national economy. Alas, due to structural challeng- for a discourse on some of the things agriculture sector should be touted and es, among other factors, in the past that need to be done. supported by all stakeholders, using all decade, Malawi’s economy has been Crafters of the country’s next long- necessary and available resources. growing but at a relatively and com- term national development blueprint This might be seen as an ideal step paratively, slower pace than expected have identified ‘wealth creation for all’ towards attaining the desired economic and than other neighbouring countries, as one of the critical stepping stones diversification dream. averaging 4.5 percent. towards attaining reasonable sustain- At the same time, Malawi needs to While Gross Domestic Product has able economic development. consider putting in place measures that increased by ten times in real terms As we know, the country’s economy would make the sector, along with the since 1964, the population increase is is agro-based, highly dependent on rest of the industry, resilient from any reported to have nullified half of the rain-fed agriculture and the sector is possible shocks. gain. not resilient to climatic shocks such as Building a resilient economy entails Variation in economic growth floods, drought and dry spells. putting up a solid foundation for growth. prospects for Malawi continue to raise Malawi’s challenge, therefore, is to And when all is said and done, the debate with commentators also won- consider commercialising the sector, citizenry’s altitude should reflect the dering if the country has been doing and diversify its industrial base, among path and the pace. enough towards attaining long-term others. But, precisely, what needs to be and sustainable growth target. It is needless to say that subdued done? I would urge you to read through.
The Malawi Banker Magazine | Vol 24, 2021 7 EDITORIAL Counting the gains
2020 would go in the record books as a year to forget for most businesses. Covid-19 pandemic has saddled almost every sector of the economy. And banks were not spared. However, players in the industry-one touted as the most resilient-have shown their prowess amid the exogenous shock. Despite the challenges faced, we have myriad success stories of individual banks and the industry at large, worth celebrating. In August 2020, FDH Bank got listed on the Malawi Stock Exchange (MSE), and become the sixteenth counter and fifth bank on the local bourse. We say congratulations! Apart from successfully switching its tagline from ‘Moving Forward’ to ‘It Can Be’, Standard Bank, another MSE-listed financial institution, got the best bank accolade at the 2020 African Banking Awards. The awards highlight the innovations and inspiring changes happening within the continental been innovative and brought banking looks brighter. financial community especially by services to the customers’ finger tips. Yes, in the third quarter of 2020 commercial and investment banks as Today, banking services are alone, the volume and value of Digital well as brokers and asset managers. accessed in people’s comfort places, Financial Services transactions Therefore, we say well done. with less, or no paper work required, rose by 30 percent and 30.7 percent We also celebrate with First Capital hence, making the traditional brick and respectively, to 130.2 million and K2 Bank and Ecobank Malawi, which mortar banking halls a rare place to visit trillion, respectively. commemorated their 25th and 20th to. We can attribute to convenience Systems of almost all commercial anniversaries, respectively. Their and safety experienced by our banks are being merged with mobile journeys, combined, have been worth customers when using such platforms noting as both banks have shown a phone services providers, making it compared to cash and other paper- high level of resilience, coupled with a easier for all Malawians with access based payment instruments. We continued drive for innovation. to a mobile phone, even those in the promise greater things ahead. The list of success stories seems remotest areas, to access the bank. And the recent reduction in policy just endless. This auger well with the theme of rate-the rate at which commercial Amid all kinds of challenges, this edition of The Banker Magazine, in Covid-19 primarily inclusive, players creating awareness on mindset change banks borrow from the central bank in the banking industry have been vis-a-vis championing the wealth as lender of last resort- by about 150 aggressive in pushing the national creation for all and financial inclusion basis points from 13.7 percent to 12.20 financial inclusion agenda. agenda. percent points towards stability on the Banks have not only endeavored With recent figures showing a market. to expand their footprints across surge in digital payments uptake in Indeed, we can still count the gains the country, but more importantly, the country, we can only say the future and remain afloat going forward.
8 The Malawi Banker Magazine | Vol 24,2021 BELIEF. PASSION. EMPOWERMENT Whatever your aspiration, let us help you achieve it
The Malawi Banker Magazine | Vol 24, 2021 9 COVER STORY
10 The Malawi Banker Magazine | Vol 24,2021 COVER STORY
MadingaAT THE is Standard HELM Bank Chief
In December 2020, the Board of Directors of Standard Bank Malawi appointed Phillip Madinga, a seasoned banker, as the bank’s new Chief Executive. He takes over the mantle from William Le Roux. The Banker Magazine cought up with Madinga for an insight on what the new role entails vis-a-vis his dreams, aspirations and vision for the bank. Excerpts;
Q. Firstly, congratulations on your contactless transactions and system In order to achieve this, it will be im- appointment as Standard Bank Chief stability. portant that as a bank, we offer unique, Executive. How does it feel being at the efficient and legendary experience helm of the bank? The bank will continue to work towards to our clients through our innovative making sure that our processes allow digital platforms and offerings and I am really delighted by the confidence swift transactions while eliminating experienced employees. This cannot be that the Standard Bank Group and our paperwork and fostering a journey achieved through the traditional bank- board has shown in me, by appointing that ensures consistent and excellent ing approach. As a result, we have made me as the first Malawian CE for Stan- client experience through swift query a decision to reposition our business dard Bank Plc. This is historical. I am and complaints handling via our voice to be digitally led and become a fu- looking forward to taking the Malawi branch. The bank will also work on ture-ready platform business. We want business to great heights and leading eliminating cheques while promoting to understand our clients better and its transformation towards becoming systems that do not sleep by focusing offer them far more than just financial more thank a bank - thus a digital and on payment that can be done even products and services. platform-led business. In line with our during weekends. purpose “Malawi is our Home, we drive Our aim is to provide complete solu- her growth”, I am also excited to lead a As we embrace the future, we have tions and increasingly rely on trusted team that is committed to support the taken a strategic decision to adopt a partner organisations in our ecosys- growth and development of our beloved platform mindset as our response to tems, to fulfil the needs of our clients. country, Malawi. evolving needs and requirements of our This means we will be far more than a clients. And to ensure that we create bank – we will be a provider of diversi- Q. What would be your thematic message further value for our clients, we intend fied services and will play a far greater to existing and potential customers? to embrace and address their needs role in the lives of our clients. We will My message to our clients is that IT CAN through strategic partnerships that will continue focusing on improving delivery BE a great 2021. avail solutions from other producers of service to our clients by making sure who offer complimentary services. We that any interaction which our clients The global Covid-19 pandemic we are all will do so by tapping into the world of have with us is enjoyable. I believe that living through has forced businesses to data, analytics and artificial intelligence by doing we will enable our bank to rethink how we engage with our clients to better serve you. realise its ultimate vision of becom- in a socially-distanced, safe, and largely ing the undisputed number 1 financial virtual manner. However, above all this, Q. What is your vision for the bank? institution in Malawi but also enable it the bank assures its valued customers, to generate sustainable shared value for it will be easily accessible once again My ultimate ambition is for the bank to all our shareholders. and even better through various digital realise its vision of becoming the undis- interventions. On top of our agenda in puted number 1 financial institution in At the same time, I would also like 2021 are the following: online payment, Malawi. our bank to work closely with the
The Malawi Banker Magazine | Vol 24, 2021 11 COVER STORY
government and support the national development agenda and key strategic initiatives. I strongly believe that the newly-adopted vision of the country, MW2063, which is focusing on inclu- sive wealth creation and self-reliance through the key pillars of Agriculture Productivity and Commercialisation, Industrialisation and Urbanisation, resonates very well with the aspirations of our bank. Thus, in line with our bank purpose that “Malawi is our Home, we drive her growth”, I would like us to support Malawi’s growth through the various sector expertise which we have within our bank.
In partnership with the government and other stakeholders, we will continue supporting key sectors i.e. the Agricul- ture sector, the SME sector, empower our Youth and Women but also support addressing challenges we currently face in our Energy and Infrastructure sector. We can make Malawi one of the shining stars within Africa.
Whilst we aim to deliver sustainable financial returns for our shareholders, we also want to make sure that we do this in a sustainable manner for our communities and the environment – we want to be a responsible citizen through our Social Economic Environ- ment (SEE) initiatives, be it in the field of Health, Education, Climate Change, Agriculture, etc.
Q. How do you project the bank’s performance, say, five years from now? Although we expect the operating en- vironment to continue being tough and challenging given recent developments related to Covid-19 coupled with our Standard Bank Plc is one of the oldest offering seamless innovative data and own country specific challenges, I am and largest financial institutions in technologically driven financial and still optimistic about the future. Malawi and we have maintained this banking products and services; a lead- position for quite a number of years er in terms of being the best institution The operating environment has now. Our ultimate goal and ambition to work for. A leader in supporting the changed the past year and Covid-19 is to become the number 1 undisputed growth of our country and supporting has taught us new lessons and things financial institution in the country. key strategic initiatives. A leader in that we never imagine. Despite these Whilst financial performance is import- being a responsible citizen by giving changes, I do believe that investments ant, we also want to make sure that back and supporting our communities we have made and continue to make we do this in a responsible manner, we through our Social Economic Envi- in technology, systems, digital plat- do not only seek to be number 1 from ronment initiatives. Whilst we lead in forms and in our people has positioned a financial performance perspective many of these aspects, we also want to the bank to adapt to the various but also in many other respects. We ensure that we provide the best returns changes that have happened but also want to be a market leader in terms of to our shareholders. exploit new opportunities emanating offering unique and legendary cli- therefrom. ent experience; a leader in terms of
12 The Malawi Banker Magazine | Vol 24,2021 COVER STORY
Keynote: impossible even during times of opportunities and challenges to us calamity, like Covid-19 and that and the rest of the market. through Standard Bank, IT CAN BE. ...in order for our Bank to Despite these challenges, the past remain competitive we Through this new brand positioning, year we adapted to new ways of will need to stay close to we believe together with our clients working and using our digital chan- these developments and and many of our partners and stake- nels such as the virtual banking, understand the impact holders we can achieve the impos- Business Online, 24/7. We were that Covid-19 and these sible. We believe that our new brand also able to seamlessly address our changes have both on position, positions us well, not only client’s requests and requirements our employees but also to lead in a number of key initiatives without the need for them to visit our clients and together to support Malawi’s growth but also a physical branch. This was made design solutions which the growth of our clients and other possible because of the massive stakeholders. We believe through investment we have made in our IT not only guarantee the this new brand positioning, we can infrastructure and our contingent sustainability of our enable many of clients realise their planning. business, but more dreams. Ndizotheka. importantly guarantee 2021 will remain tough and challeng- the safety of our clients Q. How do you rate the operating ing as we continue to experience and staff. environment? the impacts of Covid-19 (and now We need a stable economic and op- the resurgence of the new variant erating environment for the market of the pandemic) and this will in turn to have a vibrant banking sector. impact the performance of banks. Over the past few years this has In this kind of environment, in order not been the case. The economic Q. You are taking the mantle at a time the for our Bank to remain competitive challenges that this country faced bank has just shifted its tag-line from ‘Moving we will need to stay close to these over the past few years have created Forward’ to ‘It Can Be’. What is the rationale developments and understand the uncertainty on the market. behind the shift? impact that Covid-19 and these We are a purpose-driven organisation, so Before Covid-19 hit - post 2019 changes have both on our employ- despite the changes and challenges Covid-19 election - there were some signs ees but also our clients and together has brought, our new brand positioning, IT of economic recovery, however the design solutions which not only CAN BE, represents our belief in our pur- gains from that period have been guarantee the sustainability of our pose – that Malawi Is Our Home, We drive Her eroded by the pandemic. In addition business, but more importantly Growth! to our own domestic challenges, guarantee the safety of our clients thus, high domestic debt, high levels and staff. IT CAN BE is about building partnerships for of corruption, inability to generate Notwithstanding this, I am still cau- enterprise development in Malawi; making a adequate foreign currency, poor tiously optimistic that through the difference for our clients by supporting and implementation of economic and economic and development plans helping them to achieve their dreams and development plans, Covid-19 has as well as the Covid-19 mitigating realise their full potential; connecting our brought even new challenges and measures, which our new Govern- clients to the world and the markets and vice changed the way we live and do ment has put in place, together with versa, whether they are importing or export- business and ofcourse also brought the planned launch of the new vision ing or when they just need expert advice. It new opportunities for the market for the country, MW2063, we can is aboutpartnering for Social, Economic and including banks. Environmental Impact in Malawi to create overcome these challenges and set shared value; collaborating with our partners ```++++Covid-19 has accelerated our country on a path of recovery and different stakeholders including the Cen- technological and digital devel- and sustainable inclusive growth tral Bank to drive financial inclusion in the opments, such as Artificial Intel- and wealth creation. I do believe country. It is also about making a difference ligence, Robotics, Contactless. It that within this chaos, there are for and helping our communities; imparting has also accelerated the uptake and numerous opportunities. usage of digital channels because our knowledge and expertise in different The financial products uptake in Ma- human behaviour has changed - sectors we operate in to make the dreams of lawi by customers is low in general, reduced physical contact, home our stakeholders possible. how do you perceive the financial deliveries, etc. It has also impact- inclusion agenda as being driven by Q. What is the foreseen impact on business? ed our geopolitics – supply chain the government. Working together with our clients, we dynamics, protectionism, access to have proved over the years that nothing is capital, etc. All these present both
The Malawi Banker Magazine | Vol 24, 2021 13 COVER STORY
We have made some good, albeit, slow progress with regards to finan- cial inclusion. I feel that as a sector, together with the RBM and other players in the market we can do more. Although the banked population has increased to around 24 percent, up from 22 percent according to Finscope report, this is still quite low compared to other countries within the region and across Africa. Although banks have invested (and continue investing heavily in IT systems, infrastructure and digital channels to improve access to banking, we still have many chal- lenges to overcome. Over the years all banks have invested in a number of new products and services, like mobile banking, ATMs, POS devices, etc, but these efforts require concerted effort amongst a number of stakeholders, not just banks alone.
On our part, Standard bank has also made good progress in supporting the financial inclusion drive. As one of the oldest and top bank we have made sure that we are represented in all the key areas of the economy through our network of 27 branches and service centres. These are complimented by Mobile Vans, which we use from time to time to reach out to some areas where Banks may not be present or to support programs like social cash transfers. other functions. Our corporate clients As we move the bank towards becom- Through our massive investment in are also able to utilise our Enterprise ing a platform business, we believe that IT infrastructure, Standard Bank has Online & Business Online platforms. our new digital offering would enable us also been a pioneer in the digitisation connect many ecosystems and in turn journey, by offering innovative digital In support of improving access to fi- the unbanked population across the platforms. Over the years we have nance, Standard Bank was the first in- country and thereby deepen and sup- invested in over 93ATMs – out of which stitution to introduce digital personal port financial inclusion more. 22 are depositing taking, 11 Cash De- lending, a solution through which our posit Machines (CDM), over 1,000 Point clients are able to access personal However, our ambitions and the abil- Of Sale (POS) devices. loans on their mobile, ATM or most of ity as Standard Bank and as a sector our other digital platforms. We will be to reach out to some of the unbanked These platforms are available across population requires that the country introducing a similar digital lending the entire country. We have also should have reliable infrastructure to solution for SME sector. All this is being made banking services accessible to support some of the innovative solu- done not only to make banking easy for everyone, be it at a personal, business tions and products that can assist our clients but also to support financial & commercial and corporate level banks in reaching out to the rural areas. inclusion. We still plan to extend our through our innovative digital solutions We need reliable telecommunications network of ATMs, POS and other digital like 24/7 Online Mobile App, which also and Power, but we also we need reliable channels this year and in the coming has USSD functionality to ensure that roads and other related infrastructure even clients with feature phones are years. We also plan to acquire more Mo- if we are to win this battle. able to use it with the ability to pay bile Vans to reach out to some remote for key services like utility payments, areas, whilst we continue with the roll On our part, we will continue to explore Go-TV and DSTV payments and many out of our platform business solution. ways to partner key stakeholders to
14 The Malawi Banker Magazine | Vol 24,2021 COVER STORY
reach out to the masses e.g. partnerships with telecommuni- we intend to embrace and address the needs of our clients cations companies on Mobile Money as well as other private through strategic partnerships that will avail solutions from sector players in various sectors including the agriculture other producers who offer complimentary services and avoid sector where most of the business activity and base of our pushing our products and services to you. We want to become economy resides. Q. How would you motivate the youth to aim more that bank, so that we can continue to provide our clients high? unique and legendary experience. However, for this journey to be successful, we need the support of our clients. My advice to the youth is to always ensure that they have a clear vision and a clear plan to achieving their goals, aspira- I would therefore like to thank our valued clients for their tions and vision. Success requires commitment, hard work patronage, goodwill and support through the past year and and belief in yourself. Don’t be afraid to try something new, many years that the Bank has been in existence. Thank you for but just remember that Rome was not build in a day. Be dar- believing in us – in our brand. Thank you for your goodwill and ing and ambitious because anything is possible. Stay focused the opportunities extended to us. Please continue to support and do not accept mediocrity. With belief, anything is possi- us as we together take this great brand to greater heights. ble. Maintain the highest levels of integrity, it has proven use- ful for me over the span of my career and I strongly believe it For our Bank to remain competitive, requires that it must will do the same for you, now and in future. have the right people. I am proud to be part of this great brand which has such competent, hardworking and committee peo- Q. Any final words? ple that are always geared to deliver the desired unique and As I have indicated, as we embrace the future, we have tak- legendary service and solutions to our clients. I am indebt- en a strategic decision to adopt a platform mindset as our ed to these hard working and committed staff, our Board and response the evolving needs and requirements our clients. my colleagues from executive management team who have And to ensure that we create further value for our clients, made my settling back at the bank easier and memorable.
The Malawi Banker Magazine | Vol 24, 2021 15 ECONOMY Wobbling to attain MIDDLE-INCOME STATUS
CRUCIAL—Infrastructure development BY CONTRIBUTOR he country’s economy is These shocks are devastating, This has been a sour trajectory year in, never at peace. In fact, the undeniably. year out. T domestic economy has for Malawi’s exogenous shocks, how- Here is a vivid picture for the last years been synonymous to instability, ever, have dealt the economy a heavy decade when it comes to economic save for a few years of stability in a few blow for recurring decades as mani- growth rates: 8 percent (2009), 6.9 macroeconomic indicators. fested by multiple years of achieving percent (2010), 4.9 percent (2011), 1.9 The economy-which leans heavily meager economic growth rates and percent (2012), 5.2 percent (2013), 5.7 on agriculture-accounting for about subsequently increasing country’s per percent (2014), 3 percent (2015), 2.3 29 percent of Gross Domestic Product capita income. percent (2016), 4 percent (2017), 3.2 (GDP)-continues to be at the mercy Almost in each and every national percent (2018), and 4.5 percent (2019). of both internal and external shocks, budget, Treasury sets ambitious eco- Based on such numbers, simple latest being Covid-19 pandemic, floods nomic growth targets but resultantly, mathematics show that the country’s and Cyclone Idai. such projections are never achieved. economic growth averaged 4.5 percent
16 The Malawi Banker Magazine | Vol 24,2021 ECONOMY
income per capita on one hand, high economic growth on the other hand is necessary to manage population growth,” says Milward Tobias, Executive Director for Center for Research and Consultancy. Currently, Malawi’s population growth rate is estimated at around 3 percent, a rate the World Bank de- scribes as the single greatest challenge to improving human capital develop- ment and economic prosperity. As if that is not enough, on the other hand, Malawi’s fertility rate is now pegged at 4.4 percent but such a rate can go up to 6 percent in some cases, more especially in rural areas. MUNTHALI—We could reach the upper While Malawi has made good prog- middle-income status earlier ress in human development outcomes in the last two decades, demographic experts argue that further progress envisaged $1,000 (about K750, 000) per on reducing fertility rates, particularly person per year in the country’s long- amongst adolescent girls, is critical term national development document, to support improvements in human Vision 2020. capital development and inclusive The blue-print, which was launched economic growth. in March 1997, expires this year (2020) And with the population projected and is expected to be replaced by to double every 23 years, the country the National Transformation 2063, is undeniably trekking on a dangerous currently being ‘manufactured’ through path. a process being led by the National “Simple evidence shows that Malawi Planning Commission (NPC). would be a middle income economy with a per capita income of $1,000 per Where are we getting it wrong? person by the year 2035 if population Economic experts say the low was growing at replacement levels or per capita GDP-which is derived from basically having around two children dividing the country’s nominal GDP by per woman,” says Thomas Munthali, its population size-is a symptomatic director general for NPC. of the fact that the country’s wealth is Our internet search shows that not increasing with the same pace with average income for Malawi currently that of its population. Put it in another at $603 (following the rebasing of GDP context, too many people are produc- to $10.9 billion using the 2017 prices ing too little output in terms GDP as and not the old base year of 2010) is between 2009 and 2019, way below compared to neighboring countries. way below the $1,600 (K1.2 million) per the desired average growth rate of 6 “The low and episodic economic capita income for Tanzania, and $1,090 percent for a country to meaningfully growth rates against relatively high and (K820,000) for Zambia. impact on poverty while triggering constant population growth rates have The World Bank defines lower mid- development. resulted in episodic income per capita dle-income economies as those with A similar desolate trend is also growth. a per capita income of between $1,006 manifested in the country’s per-capita “This confirms the recursive rela- and $3,955 and upper middle-income income over the years. tionship between economic develop- economies as those with a per capita Our calculation shows that the ment and population and invites policy income between $3,956 and $12,235 as country had achieved an average makers and development practitioners of 2018. per-capita income of $441 (about K330, to realise that while slow population 750) per person per year, way below the growth is necessary to achieve high
The Malawi Banker Magazine | Vol 24, 2021 17 ECONOMY
Lilongwe Old-Town
Not all is lost the Commission, as it comes at a time and be motivated to do more. But From what is unfolding on the when the institution is making pro- as it stands now, the country keeps ground, it is clear that not all is lost as jections on when the country is likely wobbling to achieve the desired middle the recent rebasing of nominal GDP by going to hit the upper middle-income income status, something that should the National Statistical Office (NSO) has status “which is what we aspire to get be a food for thought to Capital Hill and automatically increased Malawi’s per before 2063.” all relevant stakeholders. capita GDP from around $350 per per- He says: “The GDP rebasing, hence, son per year to $603 (about K455,000) gives us the real base on which to take per person per year. off. You recall that one distinguish- The rebasing of GDP has seen the ing feature that NT2063 [National size of Malawi economy also expanding Transformation 2063] will have to be by over 70 percent in dollar terms from compared to Vision 2020 is that we $6.4 billion (or K4.6 trillion) in 2010 to will set targets which will help us as “....the rebasing of GDP $10.9 billion (or K8.1 trillion) in 2019. a Commission to realistically oversee is timely and important Simply put, rebasing of GDP implementation of the Vision. With the for the Commission, as involves replacing the old base year upward revision in the GDP, it means it comes at a time when (2010) used for compiling GDP with a we could reach the upper middle-in- the institution is making more recent base year (2017) for com- come status earlier.” projections on when the puting price estimates. However, just like many other country is likely going NSO Deputy Director for Statistics, economic experts we spoke to on to hit the upper middle- Hector Kankuwe, says Malawi’s GDP per the matter, Munthali warns that with income status “which capita has automatically jumped by 72 such an increase in per capita income, is what we aspire to get percent following the rebasing of nomi- Malawians should not sit back and before 2063.” nal GDP by the statistical body. relax feeling the country is now much Back to NPC’s Munthali, the rebas- wealthier than before, stressing that ing of GDP is timely and important for Malawians still need to work hard
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The Malawi Banker Magazine | Vol 24, 2021 19 #StaySafeforBusiness
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20 The Malawi Banker Magazine | Vol 24,2021 ECONOMY Banks geared to support farming
BY STAFF WRITER
ommercial banks have said C they are geared towards propelling the country’s ag- riculture to another level by extending credit facilities to boost the sector. The banks made the commitment during the 2nd Bankers Agribusiness Conference held in Lilongwe from 4 to 5 December 2020 under the theme Cre- ating Resilient and Sustainable Agrarian Economy in Malawi. Speaking at the conference, Minister of Agriculture, Lobin Lowe, challenged commercial banks to extend more support towards the agriculture sector which is a hub of the economy. Standard Bank Head of Relationship Banking, Graham Chipande, said the bank has a variety of facilities aimed at helping stakeholders in the agriculture value chain. “Standard Bank is ready to work in partnership with stakeholders to offer the solutions within the value chain,” UPBEAT—Nkungula Chipande Said Chipandesaid Standard Bank’s prod- On his part, National Bank of Malawi communities and others specific for ucts target small-holders, out-growers, (NBM) Business Development Manager- agriculture. input dealers, primary producers, pro- responsible for Agriculture, Samuel “We have commercial banks that cessors, traders, distributors, retailers Ngwira, said the bank recently unveiled have come up with deliberate policies and wholesalers. the Farm Infrastructure and Implement to support agriculture. We know that we CDH Investment Bank Banking Loan facility, which seeks to finance need to push more, but the important Centre Manager, Jennie Madinga, said all eligible farmers in Malawi from thing is that we have started supporting small-scale to estate owners to acquire her bank has working capital and asset agriculture. finance products to finance farmers agriculture equipment. “Banks are leveraging on the involved in production of various types Ngwira said the facility seeks to banking agents to reach out to the of commodities including sugar, maca- help Malawi move away from traditional unbanked, because an inclusive Malawi damia and seed. ways of farming to a more mechanized is better for the economic growth of the Madinga said the asset finance fa- system, which would help the country country,” Shaba said. cility enables farmers buy trucks, trac- realize increased produce some of tors, refrigeration equipment, irrigation which could be exported to bring more In addition he Institute Chief Ex- systems and build warehouses. forex to Malawi. ecutive officer, Lyness Nkungula , said “CDHIB also provides financing in Institute of Bankers Chairperson, there is need for more collaboration the whole agriculture value chain in Zandile Shaba, said banks have played a with the key stakeholders in order to areas of transportation, warehousing role in inclusive financing by coming up move ahead and grow the agribusiness and packaging,” Madinga said. with products that are suited for rural sector.
The Malawi Banker Magazine | Vol 24, 2021 21 ECONOMY Could there be an end to SMEs woes?
BY STAFF WRITER
orld Bank figures show (89 percent) being informal, some with no records (36 that in Malawi, micro, small percent), and lacking innovation and diversification (45 and medium enterprises percent). W (MSMEs) constitute 60 per- Lack of robust lending models results in the reliance cent of businesses, providing on traditional forms of collateral, which are often limiting jobs to 1.6 million people. for MSMEs.” However, only 10 percent of medium But what is more puzzling is the fact that FinScope enterprises, five percent of small enterprises MSME Malawi 2019 reports that there are 1.1 million busi- and three percent of micro enterprises have nesses classified as MSMEs in Malawi operating mostly credit from commercial banks. operate in the wholesale, retail and agriculture sectors. Despite their significance, financial insti- Although a good proportion of MSMEs are in the tutions continue to perceive MSMEs as too mature stage (23 percent), the majority are in a start-up risky, says World Bank in its July 2020 Malawi phase. Economic Monitor. Ironically, Bankers Association of Malawi (BAM) figures But that is not all. show that the distribution of banking sector loans are that World Bank found that low literacy levels heavily skewed towards wholesale and retail, and agricul- of MSME owners and entrepreneurs deter ture, forestry, fishing and hunting, controlling about 42.3 MSMEs from meeting the requirements for percent of total loans while the manufacturing sector formal financing with majority of MSMEs controls only around 13.9 percent of the total loans.
22 The Malawi Banker Magazine | Vol 24,2021 ECONOMY
VOLATILE—Most MSMEs fail to grow—Source, the World Bank
This is out of the total banking economy, an estimated 91 percent sector loans, which increased from of businesses accounting for 89 K397.2 billion in 2015 to K637.3 percent of employees operating billion. without formal registration and out- An official from BAM says in side of the tax-net. addition to conventional lending On the other hand, the 2018 instruments, commercial banks are Population and Housing Census collaborating with other stakehold- data indicate that out of 3 984 ers for innovative financing, which 981 households in Malawi, 651 357 While access to can support some pockets of SMEs households operated a business finance remains not able to meet existing loan cove- of some kind representing 16.3 nants in the banking industry. percent of all the households. a stumbling block However, Chamber for Small While access to finance for the growth of and Medium Businesses Associ- remains a stumbling block for the ation executive secretary James growth of the sector, finding busi- the sector, finding Chiutsi says although small ness and markets is another thorn business and businesses are still facing access on the flesh. to finance challenges due to strict Minister of Trade Sosten Gwen- markets is another collateral requirements, the coun- gwe observes that black indigenous thorn on the flesh. try has several entrepreneurs with Malawians are still losing out on sound business ideas but having no public procurement despite reg- means to acquire assets. ulation for preferential treatment “Not many people have acquired regulation. assets that can be used as collat- He says every passing national eral. Formal registration has only budget, the unequal sharing of pro- been an expense small businesses curement ‘national cake’’ has been can do without,” he says. so glaring. Recently published data from “For example, in the year just the Global Systems for Mobile As- ended, it is estimated that out sociation indicates that within the of the K600 billion government
The Malawi Banker Magazine | Vol 24, 2021 23 ECONOMY
GWENGWE—The ministry will issue colour coded licences
procurement budget, only less than 15 Regulations 2020 to operationalise and qualifying MSESs, the ministry will issue percent was taken up by black indig- offer guidance on the implementation colour coded licences,” says Gwengwe, enous Malawians [IBMs]others. The process of this provision. adding that goods, services and works trend has existed for so many budgets Under the PPDA Participation by under this order complements the Buy on end. Micro, Small and Medium Enterprise Malawi Build Malawi Campaign. “This has created glaring economic Order 2020, medium enterprise means However, Chiutsi indicates that in-equalities in our society. The 2017 an enterprise comprising at least delays to gazette regulations for the PPDA Act was passed to address this annual turnover between K50 million operationalisation of public procure- apparent economic injustice,” Gwengwe and K500 million, has between 20 and says. 99 employees or has maximum assets ment in line with domestic preference if The preferential treatment provi- (excluding land and buildings in the case frustrating the sector. sion is provided under Section 44 (10) of manufacturing enterprises) of K250 He observes that for three years, of the Public Procurement and Disposal million. small and medium enterprises have of Assets Authority (PPDA) Act requires Micro enterprise, on the other hand, been waiting keenly for the day when 60 procuring and disposing entities (PDEs) has to have an annual turnover of up percent of all contracts under National to award 60 percent of all contracts un- to K5 million with between one to four Competitive Bidding (NCB) to indige- der National Competitive Bidding (NCB) employees or a maximum of K1 million nous black Malawians and 40 percent to to IBMs and 40 percent to others. assets (excluding land and buildings in others. While domestic preference is a the case of manufacturing enterprise). He says: “Without a deliberate effort long-standing provision in Malawi’s Small enterprises means an to help the local indigenous Malawians, public procurement legal framework, enterprise with an annual turnover of it is not easy for the locals to make it in the 60/40 provision is new as imbedded between K5 million and K50 million in the PPD Act. with between five and 20 employees business. Meanwhile, the PPDA has drafted or a maximum of K20 million assets “It is frustrating to see that the the Public Procurement and Disposal (excluding land and buildings in the case guidelines are not being implemented of Assets Authority (PPDA) (on Admin- of manufacturing enterprise). when this is supposed to give financial istration of Preferential Treatment) “For the purpose of identifying freedom to small-scale businesses.”
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The Malawi Banker Magazine | Vol 24, 2021 25 ECONOMY Mindset Change; a catalyst for growth
SPOKE ON MINDSET CHANGE—Chilima
BY GODFREY MAOTCHA
himwemwe Petulo is a 19 year old The burning questions that Petulo have could be C vendor of dry fish at Chiuzira market-busy part of the mantra that is being propagated in many trading centre located in the south east of spheres of life in Malawi: mindset change. Malawi’s capital, Lilongwe. On Friday, October 2020 on a warm evening in Nearby his vending stall is a place where Lilongwe Vice President Saulos Chilima delivered a women dump tomatoes which are too damaged for public lecture on mindset change. consumption. Since then there has been an ‘awakening’ among The tomatoes are grown in nearby Nathenje and Malawians. A redefinition of how they should pursue Kang’oma areas. The demand for tomatoes despite goals for progress of their livelihood and the country. being high, most consumers in surrounding areas Malawi government assures people like Petulo on like area 23 do not satisfy it, until the crop is rotten. providing a conducive environment for the smooth It pains him to see commodities which have running of foreign trade, especially exports. taken a lot of time and resources to produce being Mayeso Msokera is spokesperson for the Ministry dumped. of Trade. He says Malawi has many trading agree- “Can the government not devise ways of preserv- ments with both regional and global counterparts. ing tomatoes and sell them abroad?” he asks.
26 The Malawi Banker Magazine | Vol 24,2021 ECONOMY
Action Plan for Women Economic Empowerment (NAPWEE), ensures that women have access to economic activities. Some areas of focus in the plan are: promotion of women and girls education and financial literacy, sup- porting business and entrepreneurial activities, enhancing women’s access and control of property and facilita- tion of labour empowerment. He says in general, it introduc- es affirmative action measures to ensure that women benefit from eco- nomic opportunities including those created through public procurement processes. Professor Ben Kalua, an econ- omist at the University of Malawi’s Chancellor College adds that entre- preneurial skills should be enhanced for women and the population in general. EXPORT MATERIAL—Fresh tomato and Irish potatoes “Business has a drive, prefer- ence for employment is passive. The former is better than the latter,” he These include the Zimbabwe-Malawi argues. trade agreement and a similar agree- Despite all the incentives to ment with South Africa. boost foreign trade, most of Malawi’s Globally, Malawi benefits from the exports are raw. Africa Growth Opportunity Act (Agoa) The major ones are tobacco, which enables duty free agriculture tea and soya meal. As of 2018, the exports to the United States. FOR EQUALITY— Yeresani country’s exports were pegged at Some trade agreements with “If we allow women to fully engage in $998 million. Its imports on the other regional and continental blocs include economic activities that are culturally hand were $1.51 billion, bringing a those with Southern Africa Develop- reserved for men, the better,” he says. trade deficit of $514 million dollars. ment Cooperation (Sadc), Common He feels although the country has This is according to the Observatory Market for the Southern and Eastern some women holding influential positions of Economic Complexity (OEC). Africa (Comesa) and European Union in the public and private sectors, a lot In young Petulo’s imagination the (EU) and the Africa Caribbean and the needs to be done. only way to boost our resource based Pacific (ACP). economy is to increase our export “To reduce delays and duplication There are still a lot of women who base. Exporting finished products of procedures during transit of export are denied an opportunity to engage in and not raw materials for that matter. goods government is introducing one economic activities. Some are stopped With over 50 years of indepen- border posts,” he adds. from working or doing business by their dence it is high time we move on to Women empowerment husbands. an exporting and producing country. Leonard Mgemezulu is a teacher In his public lecture Chilima noted Apart from that, we should move by profession and a volunteer broad- that “the country’s human resources is from a resource based to a knowl- caster at Radio Alinafe in Lilongwe. dominated by women and youth, and edge based economy. He feels one aspect which Malawi any underutilisation of this constituency Support is needed for innovators needs to address if it is to attain of the population can have a negative in our villages and institutions of economic prosperity at nation- impact on the economy”. higher learning. al and household level, is women Peter Yeresani, Chief Gender officer in We have been in this place for too empowerment. the Ministry of Gender says the National long.
The Malawi Banker Magazine | Vol 24, 2021 27 FEATURE The politics of development
WHERE LAWS ARE MADE—Parliament Building BY MALLICK MNELA, Contributor
he World Bank describes Malawi’s The sweet part is that extreme national poverty decreased poverty and inequality as “stubbornly from 24.5 percent in 2010/11 to 20.1 percent in 2016/17. T high”. In superlative terms, it would not The protracted poverty is said to be driven by low produc- have been fair to describe the country tivity in the agriculture sector, limited opportunities in non- as such some 20 years ago, when multiparty pol- farm activities, volatile economic growth, rapid population itics was still experimental. growth, and limited coverage of safety net programmes and Early in the era of multiparty democracy, targeting challenges. the Vision 2020 was espoused as a turn-around Conversely, these are the areas considered key and thus strategy for the country’s economic fortunes. In appropriating a huge proportion of the country’s resource it, the country’s development agenda was drafted envelop. for all to follow through on the path to national There are a number of assumptions that can be made. greatness. Firstly, the programmes are being executed for political point In between the execution of the Vision 2020, scoring. there are tales befitting the bitter-sweet cate- Secondly, the resources being deployed are inadequate to gory in the story bank. Over the years, there are ensure sustainable impact given the expansive and pervasive positive strides attained and detriment suffered. nature of the country’s poverty. Thirdly, the resources ear- Midway into the Vision 2020, for example, the marked for the projects are being siphoned due to corruption World Bank says that Malawi’s national poverty or spent on non-core programmatic activities. Fourth, the rate increased slightly from 50.7 percent in 2010 politicisation of development. to 51.5 percent in 2016. That is the bitter part. A quick diagnostic into the failures of Vision 2020
28 The Malawi Banker Magazine | Vol 24,2021 FEATURE
it remains susceptible to politicisation, Commission (NPC). This institution is theft and corruption and resource in charge of the country development constraints to optimise benefits to a agenda. majority among the population in need. In a manner hitherto unwitnessed, Many pundits have advocated NPC has been engaging wider stake- against this initiative for its lack of holders in soliciting views on the coun- sustainability. However, the political try’s development discourse. masters cannot disappoint the majority What this means is that the NPC poor by going back on their word. Oth- has assumed a role to democratise erwise, they risk diminished political development. clout. Furthermore, the position posited Malawi has good policy frameworks by the NPC in its recommendations to on diverse issues around develop- the powers that be must be seen as a ment. The major weakness, however, reflection of the will of the majority, is that those technocrats that have especially the younger generation. the responsibility to advise can offer There must be deliberate effort to counsel. But it is incumbent upon those hear the youths and younger genera- in leadership positions to implement tion more because the decisions on such advice. national investments being made today Given a situation where a majority have far reaching consequences in the expect the favour of “freebies” or “near years to come. freebies” from the government whose If we pursue a spending path using leadership they hired at the ballot, it borrowed funds just to quench our amounts to political suicide to pursue a political appetite, we are creating a development path in the long term. situation where our children will inherit But then, it is a vicious cycle - it debts instead of stashes of funds and starts with campaign promises! long-term assets. The poor and mediocre execution If there is one key point we must of policy frameworks is not a result learn from the failures of the Vision of ignorance. It is a matter of build- 2020, then it is a constant failure to ing expectations on short-termistic long for delayed gratification and yield premises. In so doing, a parent usurps greater national rewards during our her children’s better future for a price lifetime. of fertilizer! Our leaders are championing The main culprit of sluggish devel- short term goals to grease their stay opment is politics, politicians being the in power. The country mostly ben- somehow validate the assumptions agents of the stagnation. efits nothing. If anything, it suffers cited above. To ensure better outcomes, there is detriment whose impact will span for All governments have thrived on need for our politics and politicians to generations. ending poverty. All have crafted their change. Politicisation, corruption and The economic concept of scarcity plans on how they would end poverty. poor execution fall under their man- will always linger on. There will never be When they got into government-us- date. The technocrats design various a time when we shall have it all - proper ing the gloomy statistics of peren- development models, leaving execution systems, culture, people and resourc- nial and deep rooted poverty-they to the elected politicians to act. es. This can only be possible if we start accumulated resources to institute That way, our country will have to harness the national development programmes. duty bearers that are development goals for the long haul. A very good example of how the conscious. Reducing national development assumptions play out is the farm input There is need to raise awareness on goals to electoral cycle is suicidal. After subsidy program in its various manifes- the proper political discourse to push a bad start with the Vision 2020, those tations. The UDF called it starter pack, the country’s development forward. Our of us who would be blessed to be alive the DPP called it FISP and the Tonse politicians should be able to champi- in 2063 would surely age in shame. All are calling it Agricultural Input Pro- on meaningful development agenda this for our short-termistic and oppor- gramme (AIP). beyond politicking. tunistic political transactions between The farmers-targeted exercise The major distinctive factor is the voters and those voted into positions of invests billions of Kwacha annually. But emergence of the National Planning authority, one election after another.
The Malawi Banker Magazine | Vol 24, 2021 29 ANALYSIS On attracting FDIs, Malawi’s potential BY STAFF WRITER
CRUCIAL—Energy sector development
espite being en- can do with very marginal effort like in the tourism and hospitality dowed with abundant industry as well as manufacturing. resources, Malawi “Other countries do not have the resources that we have in Mala- is yet to utilise her wi such as mountains and the fresh water lake yet, they outperform D potential to attract for- us.” eign direct investment (FDIs). The United Nations Commission for Trade and Development As University of Malawi’s Chancellor (Unctad)’s 2020 World Investment Report shows that inflows de- College economics professor Ben Kalua creased from $102 million in 2018 to $98 million in 2019. observes, engaging an extra gear in FDI stock closed at $1.5 billion in 2019 with the agricultural sec- marketing the country and taking bold tor attracting the most FDIs - primarily from South Africa, Germany steps in the right direction to attract and the United States - while the temporary collapse of raw material FDIs would compensate for a lack of prices impacted the production of uranium. domestic investment and spur eco- This year, Unctad projects Malawi to register a 40 percent drop nomic development. in FDI inflows largely due to the economic disruptions caused by the He says “there is a lot that Malawi Covid-19 pandemic.
30 The Malawi Banker Magazine | Vol 24,2021 ANALYSIS
development,-as most new jobs will be in cities and will require reliable power and better connec- tions to markets. The report also recommends public investment as critical to promoting employment opportuni- ties inside and outside agriculture. However, an analysis of the country’s investment policies by United Nations Economic Com- mission for Africa shows that the policies are dedicated to trade liberalisation, promotion and facilitation with a few investment conditions to promote sector-spe- cific liberalisation. Recently, President Lazarus Chakwera told Invest Africa, a leading pan-African business platform that promotes trade and investment in Africa that his government is pursuing policies that would lure investors into the country as he advance efforts in getting Malawi out of poverty. FOR PRIVATE SECTOR-LED GROWTH—Chakwera Chakwera, while issuing a fresh assurance to potential investors that his government will not allow Already, figures from the Malawi In- gaining independence in 1964. bureaucracy to hinder the inflow vestment Trade Centre (MITC) shows that However, corruption, scarcity of of foreign direct investment (FDI) investment flows have slowed in view of the skilled and semi-skilled labour and into the country, reaffirmed his Covid-19 pandemic. energy woes are listed among serious government’s declaration on zero In the first the first quarter of 2020, obstacles to attracting FDIs. tolerance to corruption which he MITC only managed to issue investment Since 2015, Malawi has been on said has over the past years scared certificates to seven new companies inter- the overdrive to attract FDI largely away potential investors. ested to invest in manufacturing, tourism, through Malawi Investment Forum “We are rich with resources agro-processing and telecommunication (MIF) 2015, 2016 and 2018, the first but we have poorly managed these sectors. ever Malawi-China Investment Forum, resources and consequently, As compared to the same period last the Malawi-Japanese Investment Malawi has become poor. There is year, the centre issued investment certifi- Forum, and the UK-Africa Investment no reason we should be marred in cates to 17 new companies. Forum. poverty at this stage. “FDI inflows to Malawi will indeed not be Through MITC, Malawi has also “We are working to end such easy in the times where business has been established a one-stop service centre bureaucracy. Sometimes it takes disrupted globally in view of the Covid-19 where all crucial institutions in the say 40 days to process [paper pandemic. The political impasse in this investment registration process are work for investors] when it can country on the other hand also makes operating under one roof. take only a few hours. I am cur- things worse as no investor would com- In its policy brief titled Malawi’s rently talking to ministries, depart- fortably invest in a country with political Challenging Employment Landscape: ments and agencies to streamline uncertainties,” says Kalua. Any Signs of Structural ransforma- everything. We want Mitc to be a In its 2019 Malawi Investment Climate tion, the International Food Policy one-stop centre when it comes to Statement, the US Department of States Research Institute recommends that all this,” he said. observes that political risk in Malawi is attracting more FDIs will require As President Chakwera sug- manageable, given that the country has improvements in transport infra- gests, indeed, “the red-tape need been largely free of political violence since structure, energy supplies and urban to be thrown out of the window.”
The Malawi Banker Magazine | Vol 24, 2021 31 Thank you for your continued support
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The Malawi Banker Magazine | Vol 24, 2021 33 CONSUMER TIPS Ways to Change Your Money Mindset 3 for Success
There is a lot of talk about the need to have a situation. When you notice an unhealthy mindset you healthy money mindset, but what exactly does that have about money, it is within your ability to start mean? How do you know what type of money mind- changing it for the good. set you have? As with anything, you must start by assessing your current views surrounding money. Abundance vs. Lack Mindset What’s Your Story? You’ve probably heard the idea that you attract what you think, and to some extent this is true. It’s less The first step is to figure out your personal money of a mystical thing and more of a behavioral thing. story. What are your attitudes and mindsets about all If your mind is conditioned to think in a certain way things money--saving, spending, debt, investment? about money, your actions will follow suit, so work on What were your parents’ approaches to those same getting your mind right. things? Did your parents talk about money a lot? Was money a cause of conflict? In your home growing up, Create an abundance mindset for yourself. Abun- was money plentiful or scarce? All of these factors dance is not about having a lot as much as it is about play a role in dictating your own mindset about gratitude and being positioned for growth. Even money as an adult, whether or not you have your own though we all have gifts and skills, we inevitably family yet. find ourselves in situations where we try and fail at something. Identify the money mindsets you may have auto- matically picked up or “inherited” from your family or A growth mindset enables you to not let a failure origin. These can be positive or negative. If you no- break down your morale. It positions you to be letting tice some negative mindsets, do not fear. You can’t your mental wheels spin to figure out how you can make a change without first recognizing your current work with the talents and resources you have and
34 The Malawi Banker Magazine | Vol 24,2021 CONSUMER TIPS
cultivate them to even greater growth. This takes time, persistence, and a plan.
Beware of a mindset of lack, also known as a scarcity mindset. Inherently, this is a fear of never having enough. One way this can manifest is not purchasing things you need and can afford for the purpose of saving a few dollars. Just because you can do some- thing for less money, doesn’t always mean it is a good investment once all things are considered.
For example, if you can figure out how to make your own soap but it takes you two hours, is the time and energy spent worth the couple of dollars you saved? Hardly. Work on learning how to make decisions that foster the right balance of time, energy, and money to say: “I want to pay off an extra surrounding money may change for you. It’s easy to notice areas of lack. Prac- tice finding the areas of abundance in your amount of student loan debt this depending on the various factors life. Gratitude is always a good choice. year,” and then paying a specified at work, but stay on the path and extra amount off the principal bal- keep your long term financial goals This abundance mindset will enable you to ance each month over the course in mind. have a more positive outlook and to find of one year via online payment or new reasons and new areas in which you can automatic deduction from your It’s no surprise that money is a very grow. If you need additional support, talk bank account. emotional topic for most people. with a financial adviser or a counselor who It’s all too easy to let emotions dic- can help you stay on the right track with both Be realistic with your goals and tate your sense of worth and iden- take ownership of your weakness- your money and your mind. tity. Jealousy or comparison always es. If you arre an impulse spender, try to sneak in, especially when keep a journal of what you buy, Make a Plan for Your Financial you look at other people’s lives. when you bought it, and why you Future When you know your “why” and did. This will help you to under- are simply aware of your financial Once you identify your money mindset, it’s stand your purchase habits. It is situation and mindsets, it’s easier time to make a plan of how you are going not a guilt trip as much as it is an to manage your money moving forward. eye-opener. to silence those difficult emotions. Automate your bill payment and your saving This is especially true when you are as much as possible. When you don’t have to Take about 30 minutes per week to confident that you are making the think about these things as much from month check in with your money situation. decisions that you want to be with to month, you have more mental space to Assess where you are at with your your money. develop a vision for your financial future. finances and see if there are any small adjustments you would like to Achieving your financial goals and In order to make a plan, acknowledge both make for the upcoming week. Re- maintaining your commitment to your strengths, “I’m great at saving for a goal,” member that money is a tool. There said goals builds a solid financial and weaknesses, “I’m an impulse spender.”. is always room for improvement. foundation on both a technical Use them to craft a money management and mental level. You’re getting plan that will work for you. Try taking a more Have a Vision of Your your money right and your mind systematic approach to your money by Financial Goals right--and that’s something worth setting up automatic transfers to savings and committing to.— https://www.vast. creating SMART goals (Specific, Measurable, And finally, have a vision for Attainable, Relevant and Timely). An example your money future. Just like in a bank/resource-center/3-ways-to- of a SMART goal with your money would be human relationship, your feelings change-your-money-mindset.
The Malawi Banker Magazine | Vol 24, 2021 35 ECONOMY Banks remain resilient amid Covid-19—RBM
BY STAFF WRITER
The Reserve Bank of Malawi (RBM) says the He said: “Our recent assessment shows a to- banking sector has thus far remained sound and tal of 1 900 customers benefiting from this relief, stable, thanks to the monetary and regulatory with a consolidated balance of K103 billion. This interventions it instituted to cushion Covid-19 constitutes 15 percent of total gross credit of the impact. industry. RBM Governor Wilson Banda said in an inter- “Banks have restructured some loans and view last week that the financial sector regula- extended repayment moratoriums to some tor has continued to witness increases in credit customers affected by the pandemic.” risk in the market, reflected through loan mora- Last month, RBM said it had extended the toriums extended to borrowers affected by the moratorium on payment of interest and princi- pandemic. pal on the loans to December 2020, after which
36 The Malawi Banker Magazine | Vol 24,2021 ECONOMY
During the first half of the year, the banking sector registered non-performing loans (NPL) ratio of 6.6 percent, an increase from 6.3 percent for the 2019 second half.
the agreement will be subject for review. second half. Fees and charges on digital banking The increase in the ratio was at- were also to reduce by 40 percent, in a bid tributed to growth in level of NPLs by 6.9 to increase customer utilisation amid calls percent to K43 billion while gross loans for social distancing. and leases only grew by three percent to Recourse has also been provided for K653.5 billion in June 2020. Emergency Liquidity Assistance to banks. Notably, restaurants and hotels sector Institute of Bankers in Malawi (IOB) reported the highest growth in NPLs by chairperson Zandile Shaba said while the 254.9 percent to K1.9 billion in June 2020. banking business performance in 2020 has As regards to sectoral credit concen- been affected by the Covid-19 pendemic, tration, 53.3 percent of gross loans and banks have to get organised to serve cus- leases was distributed among the top tomers better within the new reality. three dominant sectors namely; wholesale She said: “Things have changed we, and retail sector with 21.4 percentage therefore, need to change. “Some of the changes needed to navi- share, agriculture sector with 18 percent- gate the new reality may require a change age share and manufacturing sector with in regulations, accounting practices and 13.8 percentage share. many more.” According to 2020 Annual Economic During the first half of the year, the Report accommodation and food services; banking sector registered non-perform- transport and storage services; and ag- ing loans (NPL) ratio of 6.6 percent, an riculture, forestry and fishing remain the increase from 6.3 percent for the 2019 worst hit sectors by the pandemic.
The Malawi Banker Magazine | Vol 24, 2021 37 ECONOMY Banks call for agriculture friendly financing policies
BY STAFF WRITER
he Institute of Bankers (IoB) the potential of modern value chains to markets, farmers continue produc- T in Malawi has challenged drive progress is de-risking investment ing; hence, it is government’s duty to authorities to develop policies in rural areas. address the challenges. that ensure that agriculture becomes “Many financial institutions see rural “As we are working with farmers on financing-friendly for commercial investment as a risky venture to begin production to improve supply of farm banks. with, and women and youth are particu- produce on the market, for instance, IoB Malawi chairperson Zandile Sha- larly disadvantaged.” through Affordable Inputs Programme, ba, who is also chief executive officer of Shaba observed that a study con- we also need to work on addressing MyBucks Banking Corporation Malawi, ducted three years ago by FinMark Trust market needs for farmers,” he said. said this yesterday at the Bankers Agri- found that more than 70 percent of business Conference organised jointly young farmers face obstacles to access Comfwb secretary general Pru- with the Confederation of Women in finance. dence Mavubi described the conference Business (Comfwb) regional conference On his part, Minister of Trade as an opportunity for women to network for Common Market for Eastern and Sosten Gwengwe said his ministry is and share business ideas that would Southern Africa (Comesa) in Lilongwe. committed to improving the business boost economies in the region. Her call comes against a backdrop environment through legal and policy Financial experts say banks regard of figures from the Reserve Bank of framework. agriculture as a risky sector, which Malawi (RBM) showing that as at June He cited the African Continental faces numerous challenges, including 2020, agriculture was second in terms Free Trade Area (AfCFTA) to be opera- weather shocks that affect intended of receiving credit while banks at 20.8 tional in January next year as a bigger outcomes. percent from wholesale and retail trade market opportunity for Malawi and the Malawi’s economy is heavily depen- at 23.6 percent. rest of Africa. dent on agriculture, employing nearly 80 Shaba said it is critical for Malawian “The AfCFTA provides a greater mar- farmers to graduate from subsistence ket opportunity for us, all we need is to percent of the population. In 2019, the to commercial, calling for collaboration do our homework rightly so that we are economy grew by 4.4 percent, a marked between banks, government and play- not left behind,” he said. increase from 3.5 percent in 2018 ers in the agribusiness sector. Minister of Agriculture Lobin Lowe supported by a rebound in agriculture She said: “A key aspect of unlocking said despite that there are no reliable sector.
38 The Malawi Banker Magazine | Vol 24,2021 ECONOMY Bankers institute for regulations review BY STAFF WRITER
Some of the changes needed to navigate the new reality may require a change in regulations, accounting practices and many more.
SHABA: Things have changed, The Institute of Bankers (IoB) in Mala- need to change. Some of the changes therefore, we need to change wi has emphasised the need to revisit needed to navigate the new reality may regulations targeting the banking sector require a change in regulations, account- in the country, if it is to thrive amid the ing practices and many more. Our request Covid-19 pandemic. to the central bank is to assist in rising Speaking at the opening of the bank- awareness on remote access of banking ers’ conference, IoB Chairperson, Zandile services,” Shaba said. Shaba, said Covid-19 has gripped the Reserve Bank of Malawi Governor, economy that many businesses woke up Wilson Banda, said the crisis has seen to the realisation that they were consid- authorities and banks steer through ered non-essential. She said the uncertainty on the pos- uncharted waters and adopted unconven- sibility of ending the pandemic jolts the tional business models. sector to the reality that technology holds He said the responses have includ- the key as a defining tool in banks’ efforts ed policy rate cuts, review of liquidity to create value for all stakeholders. requirements, loan restructuring, and “Things have changed, therefore, we review of fees on digital platforms.
The Malawi Banker Magazine | Vol 24, 2021 39 FINANCE
Financial sector; conduit for DEVELOPMENT BY STAFF WRITER
HUB OF BUSINESS—Victoria Avenue
conomic growth is, to a However, for them to save there However, the sector is perceived as E larger extent, measured by a is need for a reliable and convenient ‘too risky’. surge in total value of goods financial system. Of late, Malawi has seen a village and services at a given period. It Commercial banks consolidate savings and loans groups blossoming. points to a sustainable job market. small deposits from myriad clients and They facilitate savings and encourage And the private sector remains these amounts are borrowed by corpo- borrowing for growth, among other pivotal on the job-creation equation. rate entities for investment. things. In most cases, industry players In most cases, commercial banks However, a more organised system look up to commercial banks, as a only lend out money to borrowers with supported by formal financial institu- component of the financial services an assurance of repayment; a thing tions can serve SMEs and the economy sector-which consolidates portions of which facilitates efficient allocation of better. deposits and savings from individuals funds. Most borrowers need long-term and other corporate clients-for capital. Small and Medium Enterprises financing but there is a huge gap. These banks will only have money if (SMEs) also need access to cheap cap- Seasoned banker who is also people and institutions are saving with ital which requires a system that would Managing Consultant for Intellect Link them. accommodate them. Consultants Pharrison Chiphinga Mwale
40 The Malawi Banker Magazine | Vol 24,2021 FINANCE
NEED INCENTIVES—Famers
says more need to be done to address been caution to the negative impact the problem. of climate change on loan return and “Main driver of economic growth default, they have not done enough to is productivity. If the dynamics of the address the cause of climate change finance sector do not rely on produc- in the country. This is a big threat to One of the tivity the economy is controlled by future investment,” Zuka said. cosmetic measures, thereby raising the He added that: “One of the mis- mistakes cost of borrowing,” Mwale said. takes which both the government and which both the UK-based Malawian economist financial institutions in Malawi make is government Sane Zuka adds that the financial to regard smallholder farmers as poor, and financial sector is key in achieving sustainable un-bankable and only to be supported economic growth. to survive. This is what has guided institutions in Zuka says banks need to broaden its policy formation relating to fertiliser Malawi make is to reach to help grow the private sector as subsidies and any other social cash regard smallholder figures provided show that less than 10 transfers.” farmers as poor, percent of the country’s population has Over 90 percent of smallholder access to the said financing. farmers, most of who have limited or un-bankable “The financial sector has incorpo- no access to capital, represents a huge and only to be rated environmental analysis into their available demand for such facilities. supported to credit assessment to the agriculture The problem, however, is that the sector which commands about 20 country’s private sector is character- survive. percent of private sector credit. ised by a high degree of profitability, “While the financial sector has thus less motivation to innovate.
The Malawi Banker Magazine | Vol 24, 2021 41 FEATURE
Widening development chances THROUGH POLICY
BY STAFF WRITER
ussab Laisani and fishers who This is a common sentiment among subjects of harvest fish from natural dams Traditional Authority (T/A) Mchinguza in Machinga on the stretch between Naman- District. It highlights that neglect in policy formula- tion has been one of the factors fuelling economic ja, Mphonde, Liphonyowa and J inequalities and policy detachment in rural areas. Nayuchi in Machinga District feel For a long time, according to 32-year-old Man- so forgotten in policy-formulation processes gwengwe Matama from Chakhame Village, Sub-T/A that they literary behave as if they were strange Nayuchi, in the district, policymakers have generally fruit trees set deliberately apart to prevent them ignored people of the area in policy-formulation pro- from ‘contaminating’ the rest of the population. cesses, a situation that has left them feeling unap- “But the truth is that we mean well. We, like other preciated and isolated. citizens in Malawi, want to benefit from the nation- “We, rural dwellers, just get reports that the gov- al cake. We labour every day, catching fish in dams ernment has come up with such and such a policy. along Lake Chilwa, for sustenance simply because Sometimes, we even wonder if we need some of the we lack access to markets. This problem has re- policies our duty-bearers are implementing,” he said. duced us to subsistence fishers, if ever there is such Marriam Sande— who is one of the few women a term,” said Laisani. who catch fish in natural dams scattered between
42 The Malawi Banker Magazine | Vol 24,2021 FEATURE
NO LAZY BONES—Fishers at work
president, Ken-williams Mhango, says vendors, fishers and others outside white-collar jobs often suffer policy ne- ....vendors, fishers and glect because they lack one voice. He, however, says these groups have others outside white- the potential to turn around the eco- nomic fortunes of the country, as they collar jobs often suffer form the majority that do not benefit from tax rebates and other incentives policy neglect because that big corporations are offered. “You can take the example of those they lack one voice. who catch fish in natural dams in remote areas. No one talks about opening mar- kets for them because they are consid- ered insignificant in the great scheme of things. But, if the truth were to be told, it is these people that can give the econo- my the extra push,” he says. Namanja Station, Mphonde, Liphonyowa I cash up to 100 fish from natural dams, It could be issues like these that, way and Nayuchi Border Post— agrees. She which do not dry throughout the year back in 2011, prompted informal sector has never attended any public consulta- although water levels subside between players to hatch the idea of forming their tion on any policy issue in her 28 years of October and mid-November. own commercial bank, to run away from existence. “My problem is access to markets. I the excesses of high interest rates. And, even though she sometimes want to be able to sell my fish at com- In Blantyre, some vendors took the gets wind of policies and development mercial rates, instead of poor prices first step towards realising this dream plans that have newly been formulated, fish fetches here. As you know, this is a when women from Naperi launched a she feels that not enough civic educa- village and everyone has access to the group savings and loan initiative in 2012. tion is done to educate the masses on dams. So, people are reluctant to buy “People operating small scale busi- issues that impact their lives. the fish at good prices, maybe because nesses are contributing significantly to “Every day, instead of tending their buying power is eroded,” Sande the development of the country because our crop fields, we catch fish around said. they are the ones who are feeding and Namanja and Mphonde. On a good day, Malawi Union for Informal Sector
The Malawi Banker Magazine | Vol 24, 2021 43 FEATURE
clothing the cities with their wares, why especially the young. It is premised on be a baby in 2063, as it will clock 100 should we discriminate against them?” the idea that agri-based industrialisa- years of political independence. MUFIS General Secretary Mwanda Chi- tion has the potential to create sustain- By then, the hope is that fishers like wambala wondered at the time. able value chains. Laisoni, rural area dwellers such as Mat- Fortunately, days of policy oversight The other pillar deals with urbanisa- ama and others who were neglected in are over, as Malawi targets National tion, which is a mere pipedream for peo- policy formulation in the past, will join Transformation 2063. Three pillars form ple of this rural part of Machinga. the economic bedrock of the National All these development-focused pil- the national train of development. Transformation 2063. They are inter-re- lars are a product of National Planning After all, it is hoped that, unlike in lated and inter-dependent. Commission (NPC)’s tireless work. The the past, NPC has been accommodat- These are Agriculture Productivity government set up NPC in 2017 through ing, reaching out to people through stu- and Commercialisation, whose areas an Act of Parliament. dents/learners debates, face-to-face of focus are market access, value chain It is the national medium and long- consultations, online surveys, calls for creation with the focus on industrialisa- term national development planning written submissions, as well as radio tion, resource-based industrialisation body. phone-in programmes and text messag- that includes mining. In line with its mandate, it solicited Perhaps, for people of Namanja, ideas from Malawians in the course of es in three main radio stations of Mala- Mphonje, Liphonyowa, Nayuchi, this formulating the “National Transforma- wi Broad casting station (MBC), Zodiak would be very key as the pillar was tion 2063”, the successor to Vision 2020. Broadcasting Station and Times radio, demanded by people in rural areas, Coincidentally, Malawi will no longer all voices will matter.
44 The Malawi Banker Magazine | Vol 24,2021 ECONOMY
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The Malawi Banker Magazine | Vol 24, 2021 45 COLUMN WILL WE EVER SHAKE HANDS AGAIN? Chris Chirwa Chief Information Officer, CDH Investment Bank
BY STAFF WRITER
few weeks ago, during the existence. A lot of people have written an important deal. Handshakes have Christmas season I was about the business impact which has been a symbol of greeting and respect A watching an old Christmas arisen from Covid-19. However, my in almost all cultures. To think that movie with my family. At some point argument has always been (at least Covid-19, in a space of a few months, in the movie I noticed two gentlemen during the pandemic) that most of the has erased that culture is quite shaking hands after completing a impact which informs the business unfathomable. business deal of some sort. decisions is stemming from the social This change from a handshake It dawned on me how long it has impact of Covid-19. to a fist bump or an elbow bump or been since the world stopped shaking Handshakes have been a part of the namaste, in my opinion, is one of the hands. Personally, I have not given any- global culture since time immemorial, I hardest cultural shifts globally. Of one a handshake for at least 6 months. am tempted to say since the beginning course, the fact that the handshake Early last year, if someone pre- of the world, but I would rather leave is being replaced by another option dicted that the world will not be able some room for research and debate, of physical contact shows how habits to shake hands, I would be the first to and a bit of argument! Handshakes and cultures are difficult to break laugh them off. This shift in human have been a sign of trust between two completely; they are easily varied than habits has proved to us how humanity or more people. Handshakes have replaced completely. An analogy could can do anything, with proper motiva- symbolized a contractual agreement be made that if people can desist from tion, to add an extra day to their mortal between two entrepreneurs concluding
46 The Malawi Banker Magazine | Vol 24,2021 COLUMN
This might take days or weeks or even months to get to the bottom of it. This question will lead management to review the organization’s current state, look for gaps and provide a picture of how they would like to see the future direction of the organization. Usually when I reach this stage in my engage- ments, I hear most readers saying this is intellectual property and confiden- tial information which every company should be keeping. It is not so, the prin- ciple is the same, but the journey and selection of technology differs from one organization to another. I have read of companies in similar sectors and markets which copied another’s strate- a deep-seated culture as handshaking The pandemic has disrupted the gy but ended up in a worse-off situa- which has been with us since time im- way we do business and has also tion than before the implementation memorial how come the same people exposed on how unprepared organiza- of the copied strategy. Why? There is resist change for the betterment of tions were for such a major change and always an underlying competitive edge their respective organisations. This shift in the technology environment. to every company’s strategy which could be because of several possi- The mistake most organizations have cannot be copied wholesale. A good ble reasons, which includes that the already done is to keep chasing the example which comes to mind is that people must be convinced that there ‘media’ technology. This has created of DSTV offering both satellite TV and is an urgency to change; they need to even more disorder and lack of clarity streaming ‘TV’ services while on the be made aware of the consequences of in the future technology direction for other hand competing with the likes of not changing or the benefits of chang- most organizations. I would like to Netflix which only offer streaming ser- ing, and the seriousness of the same provide some clarity and direction for vices. Both have competitive strengths regarding the organization’s existential executives and professionals in how while offering streaming services. implications. they could handle the post Covid-19 Going back to the current assess- One may ask, what could the technology shift in their organizations, ment, gaps identification and defining possibility of not being able to hand- in order to define their ‘new norm’. the future. Management should realise shake again have anything to do with The question which most exec- that this process is hard and time technology? Everything! Organizations utives should be asking themselves consuming. Some soul searching must must learn to adapt to the shifting is “where should we start from?”, and happen to realize whether there is a technology trends to be relevant, to be this question as simple as it sounds is need for an external consultant en- competitive and in some cases just still pregnant with strategic importance. gagement or to use internal resources. be in existence and for survival! The This question should not be attempted For those who have never been as far pandemic has brought in a new term, by a single person in the organization, as this stage might (will) be skeptical ‘the new norm’, which is widely used, not even the CEO or the CIO. This is a as to how can such a seemingly simple but with different meanings and with question which should be answered task be so hard to complete. I would lack of clarity. and discussed at the strategy table. urge you to start the process. The first What is the new norm? Is the new norm dependent on the pandemic period or post Covid-19 period? There are more questions than answers. I can relate to the pressure which executives are facing in adapting to the new norm and making sure that their technolo- gies are up to date and competitive. The biggest challenge is that what is referred go as the new norm for differ- ent organizations is not the same.
The Malawi Banker Magazine | Vol 24, 2021 47 COLUMN
invest in in-line with the business model, customers, and products. This exercise might also reveal gaps in the business model, and organizations have ended up changing their whole business models. An example of a shift in business models is the news- paper business. Globally, following the pandemic most newspapers have relied on online subscriptions rather than de- livery of physical prints. This is a major shift for the newspapers which have relied on the same business model for years. There are so many examples of industries (even pre-Covid-19) which have adapted new business models be- cause of technology disruptions: music sales on CDs to single online purchases or online music streaming services on platforms like Spotify and Deezer, Cable TV shifting to demand movie factor to consider before deciding in several publications that even NASA streaming services, iPhone shifting to engage an external consultant is engages external consultants to its focus from products to services whether the internal resources have achieve specific goals and tasks. subscriptions and the list of examples the right capacity, exposure, and skill One wonders why companies then is endless. There are companies which to carry out the specific task. frown upon using external consultants have failed due to their failure to adapt Secondly, is to look at time factor, for advisory services. Sometimes, to these new technology disruptions. the internal resources might have management does not want to ac- Due to the importance of this the skills but might be overwhelmed knowledge that they do not have in- exercise, hence the need for all stake- with already existing core business. ternal capacity; it looks like they are ex- holders to be involved to ensure there Successful leaders run two companies posing their shortcomings. Then there is enough clarity and direction in the (in one), the current company, and the is the issue of cost, these services cost technology journey for the organiza- company of the future, while at the a lot of money. The chances are high tion. And this will avoid the reactionary same time doing administrative tasks that if there is no clarity of deliverables, tendencies which organizations are which is a must for governance, order, the task will likely become a white el- becoming experts in. and compliance. This, usually, leaves ephant, and the board of directors will It is high time executives realize no room for internal consultation work, not appreciate the need for such a task that the world is full of many emerging hence the need to outsource externally. which they (mostly) believe is simple technologies which have to be carefully Thirdly, executive management enough to be handled internally. There analyzed for fit-for-purpose, further to must look at the independence and mo- is also the issue of job security and that most of these global ‘new norms’ tivational factors. The internal resourc- not being in control, leaving such an do not apply to all demographic and es might have the time and capacity important task to external consultants cultural regions. This is where the busi- but might lack the motivation to carry might weaken control of the internal ness analysis exercise comes in handy. out specific tasks, for example it might leadership. So, the question I leave with you my be an issue which they do not like. If it At the end of the day, this exercise fellow executives and professionals is is floated externally, the chances are should be carried out. We are still “Will we ever shake hands again?”Only high that the bidders are passionate in attempting to answer the question, at the end of the assessment will you the specific field. “where should we start from?”Why be able to answer this question. The Fourthly, there is empirical evi- should this exercise be carried out? answer to this question will determine dence that the best of companies with What are the objectives? Whether an the technology direction which you will enough top resources have resorted to organization decides to use external or be leading your organization. external consultants and they have got- internal consultants, the objective of ten better results than if they had used this exercise is to decide what specif- In the end you might find your ‘new internal resources. It has been reported ic technology an organization should norm’ to replace your handshake.
48 The Malawi Banker Magazine | Vol 24,2021 RESERVE BANK OF MALAWI
FEATURES OF THE UPGRADED K1000 BANKNOTE RESERVE BANK OF MALAWI RESERVE BANK OF MALAWI The Reserve Bank of Malawi Bank will issue an upgraded K1000 banknote into circulation on 1st February 2021. Below are the security features of the upgraded K1000 banknote. The general The Reserve Bank of Malawi Bank will issue an upgraded K1000 banknote into circulation on 1st February 2021. Below are the security features of the public is advised to check out for these features to avoid being cheated.st The Reserveupgraded Bank K1000of Malawi banknote. Bank The will general issue anpublic upgraded is advised K1000 to check banknote out for into these circulation features to onavoid 1 beingFebruary cheated. 2021 . Below are the security features of the upgraded K1000 banknote. The general public is advised to check out for these features to avoid being cheated.
FRONT SIDE OF THE UPGRADED K1000 BANKNOTE 1 SPARK LIVE (FISH SHAPED): This is a new feature in FRONT SIDE OF THE UPGRADED K1000 BANKNOTE form of an image of a fish that changes colour from gold to 1 green SPARK when LIVEthe note (FISH is tilted. SHAPED): The image This is located is a new at the feature front in formof theof banknotean image on of the a leftfish hand that side. changes colour from gold to 4 green when the note is tilted. The image is located at the front
3 of the 2 banknote on the left hand side. 4 SECURITY THREAD. This is a new security thread placed vertically near the centre at the back of the note. The line 3 2 changesSECURITY color from THREAD green .to This blue is when a new the securitynote is tilted. thread placed 5 vertically near the centre at the back of the note. The line 3 4 changes WATERMARK:color from green Thisto blue is anwhen image the embedded note is tilted. inside the 5 banknote. When the note is viewed against direct light, the 1 3watermark appears as a portrait of Dr. Hastings Kamuzu Banda 4 WATERMARK: This is an image embedded inside the 4 with the number 1000 below it. The watermark appears on both banknote.sides of theWhen banknote the .note is viewed against direct light, the 1 watermark appears as a portrait of Dr. Hastings Kamuzu Banda
with 4the number 1000 below it. The watermark appears on both 4 This is a special kind of printing on sides ofROUGHNESS: the banknote. banknotes that gives a raised and rough feeling when touched
BACK SIDE OF THE UPGRADED K1000 BANKNOTE unlike the other sections of the note which are smooth. The 4denomination value of ‘1000’, the capital letters reading ROUGHNESS: This is a special kind of printing on banknotes"RESERVE that BANKgives aOF raised MALAWI" and rough and feelingfour dots when at the touched left bottom corner of the note feel rough when touched. BACK SIDE OF THE UPGRADED K1000 BANKNOTE2 unlike the other sections of the note which are smooth. The denomination value of ‘1000’, the capital letters reading 5 "RESERVEHOLOGRAPHIC BANK OF FOILMALAWI" STRIPE: and This four is adots shiny at vertical the left bottomstripe corner near theof theright note-front feel edge rough of whenthe banknote. touched. When the 2 banknote is tilted, the stripe shows the portrait of Dr. Hastings
5Kamuzu Banda, denomination value of 1000, the Reserve Bank ofHOLOGRAPHIC Malawi logo, and FOIL the STRIPE:text "RESERVE This is a BANKshiny vertical OF stripeMALAWI" near the. right-front edge of the banknote. When the banknote is tilted, the stripe shows the portrait of Dr. Hastings Kamuzu Banda, denomination value of 1000, the Reserve Bank
of Malawi logo, and the text "RESERVE BANK OF MALAWI".
The Malawi Banker Magazine | Vol 24, 2021 49 RESERVE BANK OF MALAWI
NDALAMA YA K1000 YA ZIZINDIKIRORESERVERESERVE BANK BANK OF ZA M OFALAWI MAKONO MALAWI
Ndalama yaNdalama K1000 yaya K1000 zizindikiro ya zizindikiro za makono za makono A Reserve Bank ya Malawi atulutsa Ndalama ina ya K1000 ya zizindikiro zamakono kuyambira A Reserve Bank ya Malawi atulutsa Ndalama ina ya K1000 ya zizindikiro zamakono kuyambira pa 1 February 2021. A Reserve Bank yapa Malawi 1 February atulutsa 2021. Ndalama Anthu inaonse ya akulimbikitsidwa K1000 ya zizindikiro kuti zamakonoadziwe zizindikiro kuyambira zotsatirazi pa 1 February pa Ndalama 2021. ya Anthu onsemakonoyi akulimbik pofunaitsidwa kupewa kuti adziwe kuberedwa: zizindikiro zotsatirazi pa Ndalama ya makonoyi pofuna kupewa kuberedwa: Anthu onse akulimbikitsidwa kuti adziwe zizindikiro zotsatirazi pa Ndalama ya makonoyi pofuna kupewa kuberedwa:
1 KU NKHOPE KWA NDALAMA YA K1000 YA ZIZINDIKIRO ZA MAKONO 1 Chizindikiro Chowoneka Ngati Nsomba ( chizindikiro KU NKHOPE KWA NDALAMA YA K1000 YA ZIZINDIKIRO ZA MAKONO Chizindikirochatsopano) Chowoneka: Ichi ndi Ngati chizindikiro Nsomb achowoneka ( chizindikiro ngati chatsopano)nsomba: Ichi chomwe ndi chizindikiro chimasinthasintha chowoneka mtundu ngati nsomba ndikunyezimirachomwe chimasinthasintha mochititsa kaso mtundu mukamayipendeketsa 4 3 ndikunyezimirandalamayi. mochititsa Chithunzichi kaso chilimukamayipendeketsa ku nkhope kwa ndalamayi 4 3 ndalamayi.cha Chithunzichikumanzere chili ku nkhope kwa ndalamayi cha kumanzere 2
2 Mzere onyezimira odukanadukana ( chizindikiro 5 chatsopano): Uwu ndi mzere onyezimira komanso Mzere onyezimira odukanadukana ( chizindikiro 5 odukanadukana wa mtundu obiriwira chapakati kumbuyo chatsopano)kwa ndalamayi.: Uwu ndi mzere Mzerewu onyezimira umasinthasintha komanso mtundu 1 4 odukanadukanakuchokera wa kobiriwira mtundu obiriwira kuboita ku chapakati buluwu kumbuyo 4 kwa ndalamayi. Mzerewu umasinthasintha mtundu 1 4 mukayipendaketsa ndalamayi. kuchokera kobiriwira kuboita ku buluwu 4 mukayipendaketsa ndalamayi. 3 Chithunzi Chowoneka Mkati Mwa Pepala: Ichi ndi chithunzi cha Dr Hastings Kamuzu Banda chomwe 3 Chithunzichimaoneka Chowoneka mkati mwa Mk ndalamaati Mwa pamodzi Pepala: ndi Ichi nambala ndi ya chithunzi1 000.cha DrChithunzichi Hastings chimaonekaKamuzu Banda mbali chomwe zonse za ndalamayi KUMBUYO KWA NDALAMA YA K1000 YA ZIZINDIKIRO ZA MAKONO chimaonekamukayiyang’anitsa mkati mwa ndalama ndalamayi pamodzi ku dzuwa ndi nambalakapena ku ya nyali . 1000. Chithunzichi chimaoneka mbali zonse za ndalamayi KUMBUYO KWA NDALAMA YA K1000 YA ZIZINDIKIRO ZA MAKONO mukayiyang’anitsa 4 ndalamayi ku dzuwa kapena ku nyali. Kukhakhala : Awa ndi malo ena pa ndalamayi omwe
2 ali okhakhala akakhudzidwa. Mwachitsanzo, malemba 4 Kukhakhalaoti “RESERVE : Awa BANK ndi malo OF enaMALAWI”, pa ndalamayi nambala omwe ya
2 ali okhakhala‘1000’ akakhudzidwa., komanso tizizindikiro Mwachitsanzo, tinayi tozungulira malemba tomwe oti “RESERVEtikupezeka BANK pamunsi OF paMALAWI”, ndalamayi nambalachakumanzere, ya ‘1000’, komansozimamveka tizizindikiro kukhakhala tinayi mukayendetsap tozungulirao chala tomwe kusiyana tikupezekandi pamunsimalo ena papa ndalamayindalamayi. chakumanzere, zimamveka kukhakhala mukayendetsapo chala kusiyana 5 ndi malo ena Mzere pa ndalamayi. Wonyezimira : Ichi ndi chimzere chachikulu chonyezimira chomwe chili ku nkhope mbali ya kumamzere kwa ndalamayi. Chimzerechi chimachoka 5 Mzerepamwamba Wonyezimira kufika :pansi. Ichi ndiMukayipendeketsa chimzere chachiku ndalamayi,lu chonyezimirapachinzerepa chomwe pa chilimawoneka ku nkhope nkhope mbali ya Dr ya Hastings kumamzereKamuzu kwa Banda,ndalamayi. nambala Chimzerechi ya 1000, chizindikiro chimachoka cha Banki pamwambayayikulu kufika ya pansi. Malawi, Mukayipendeketsa komanso malemba ndalamayi, oti “RESERVE pachinzerepa BANK pa OFmawoneka MALAWI” nkhope ya Dr Hastings
Kamuzu Banda, nambala ya 1000, chizindikiro cha Banki Mukafuna kudziwa zambiri, funsani kwa : The Director, Currency Management yayikulu ya Malawi, komanso malemba oti “RESERVE Reserve Bank of Malawi , P.O Box 30063, Lilongwe BANK 3 OF MALAWI” Tel: +265 (0) 1 770 600; Mukafuna kudziwa zambiri, funsani kwa : The Director, Email: Currency [email protected] Management 50 The Malawi Banker Magazine Reserve | Vol Bank 24,2021 of Malawi, P.O Box 30063, Lilongwe 3 Tel: +265 (0) 1 770 600; Email: [email protected]
MYBUCKS
Mybucks Bank impresses SMEs
yBucks Banking Cooperation towards attaining one of our strategic “However, due to stiff competition M has reiterated its commit- intent encapsulated in our vision of and other pressing personal needs, at ment to working with Small becoming the best bank in Malawi in around 2016 I decided to diversify into and Medium Entrepreneurs (SMEs) in terms of social impact,” she said. selling of motor vehicle spare parts af- the country to help them sustainably One of the customers, Paliani Ka- ter conducting a thorough research in grow their businesses. moto, who trades under the “Kamoto this new business area,” he says. MyBucks Managing Director, Zan- Investments”, hailed the bank for what He says he values the social capi- dile Shaba said working with SMEs is he said helping him grow his business. tal that he has built over the years with critical as they contribute towards na- He started his auto parts business garage owners within Ndirande. tional economic development. about 20 years ago. He sold off 5 minibuses and out of She said using a diverse services “It was in 2000, when I ventured the proceeds, took K3 million and in- and products from the bank, most into business. After a number of failed vested it as a start-up Capital for the SMEs have seen their businesses business venture attempts, I start- spare parts business. grow. ed off a minibus business and over “It is pleasing to realise that as a a number of years my fleet grew to 8 bank, we are making positive strides minibuses.
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GetBanked GetInsured GetCash Where it all started: Posing at his first shop in Ndirande. www.mybucksbanking.mw [email protected]
The Malawi Banker Magazine | Vol 24, 2021 51 MyBucks Banking Corporation is a financial institution in Malawi, registered and licensed to provide banking and financial advisory services and regulated by the Reserve Bank of Malawi. The bank’s head office is in Ekistics House, City Centre, Lilongwe. MYBUCKS
Posing at his Down town Bt Shop
Posing at his third outlet & one of his cars
“When I started Kamoto Auto- referrals from friends, I settled for Through my research and parts, the business was doing MyBucks, a decision that I will never referrals from friends, considerably well and to meet my regret to date,” he says. growth aspirations I started looking At that time (between 2017 I settled for MyBucks, a for a bank that I can partner with. and 2018), he wanted a boost the decision that I will never Through my research and working capital to enable him open regret to date.”
52 The Malawi Banker Magazine | Vol 24,2021 MYBUCKS
Where it all started: Posing at his first shop in Ndirande
more outlets and also increase my management and ease cross-border stockholding. transactions. This aspiration, he says, partly “Every time I am in need of forex came into fruition when Mybucks of- or want to buy things online or via fered him a loan. LC’s, MyBucks delivers. In addition, “Every time I am “When I took the loan I was able their Flex Online internet banking to buy my stock from Dubai at a rela- in need of forex or enables me to manage my accounts tively lower price compared to Da res want to buy things salaam thereby increasing my profit 24/7, hence simplifies the way I do online or via LC’s, margin and was able to grow my busi- business,” Kamoto said. MyBucks delivers. ness further. He then urged fellow SMEs to be “This in turn made it possible for prudent in financial management, if In addition, their me to pay off the loan in good time they are to see their businesses grow. Flex Online internet and took another big loan that has MyBucks Malawi has branches also helped to boost my business banking enables in Blantyre, Lilongwe, Mzuzu, Zom- further. As we speak now, I now have ba, Mangochi, Dzaleka, Kasungu and 2 shops in Ndirande and one shop in me to manage my Madisi. down town Blantyre along Haile Se- It has a delivery channel of 17 accounts 24/7, hence lassie road,” says Kamoto. branches, 78 agents, and 30 ATMS simplifies the way I His fleet of minibuses and trucks is also growing and the business has across the country, offering a full do business.” 10 staff members. range of banking products and ser- Kamoto said Mybucks has been vices that include Bancassurance offering solutions that help in risk and microfinance products.
The Malawi Banker Magazine | Vol 24, 2021 53 REUNION
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The Malawi Banker Magazine | Vol 24, 2021 55 FDH Bank Our Bank Our Future Grow With Us First
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56 The Malawi Banker Magazine | Vol 24,2021
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