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M COLLINES� é Tanganyika Morogoro D L MLALA Lugunga� u v U A be 2356 m Kibaha u B a a w m 2646 m T Rung Dar Es Salaam IM jo I L N 2006 At a Glance A M . h a s M t ua M R ia f Ile Mafia MARUNGU t a ea Iringa G reat Sumbawanga r Rua M S G h e a a d Lac� t T h i a o r u t Rukwa R é e N ttl ro D Li e Population (mn) 13.17 b m Mts. MULUMBE O Lac� ilo K ubu Mweru uf M L Mbeya KIPENGERE RANGE C TANZANIE h a Population Growth (annual %) 2.2 m gu REPUBLIQUE� b w e e Lu s u h d i n a DEMOCRATIQUE� g kuru n m ra e a a w Lindi l b b M DU CONGO u Kasama p M

a u 2164 m Official Language (s) English/Chichewa L Nganda� 2606 m Mtwara Lac � Lac� 2148 m NYIKA� Songea Tshangalele PLATEAU Bangweulu a Cap Delgado A vu m Ru Ile Rongui Malawian Kwacha (MWK) Mansa i G Currency Ile Vamizi h s a be m N w a g Ile Metundo h I n PLANALTO� C ua Mzuzu LubumbashiL L DO MAVIA ua H p Rov K u u m a a l C f a u e Lac Nyasa� U

GDP (Current US$ bn) 2.19 e -Lac Malawi-g n M i

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S M T o Ndola Serra Jéci� l 1836 m sa N a s d e GDP Growth (annual %) 8.4 n M O e g u Pemba M Lichinga L

A G Chipata IN H C a w U MOZAMBIQUE GDP Per Capita (US$) ZAMBIEg io 167 1660 m r n Lú M a Lilongwe u Kabwe S L E 2207 m T D EN M Baía� PE m fw Lac� A R nse a ESC Lu Lac� Chiuta de Fernão Veloso FDI, net inflows (US$ mn) (2005) 3.0 Malombe Lac� Chilwa Nampula Zomba o bèze Lúri LusakaZ am External Debt (US$ mn) 4,000 Lac de Cahora Bassa Blantyre Mt MULANJE L i g C A R P o S E M E S Sapitwa� n E N h h T D U L Z Tete i 3002 m i a A r M B E Z c E e u ng O N A Z o M tsM V U RA D a A m bèze External Debt/GDP (%) 184.4 Lac Kariba i n a y n u

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Chinhoyi e Mazowe r ti i ia h CPI Inflation (annual %) n C 13.4 A m Harare U

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a Gweru Sovereign Ratings Gross Official Reserves (bn US$) 0.116 i MALAWI Long Local Foreign Gross Official Reserves (In months of imports) 1.4 Term GEOATLASCurrency - Copyright1998 Graphi-OgreCurrency UNDP HDI Ranking 166 Fitch 0 kmB–100 200 300 400 km B– Source: AfDB, IMF, UNCTAD, UNDP, UN Population Division

1. Overview of Financial System namely Treasury Bills and Local Registered Stocks. Bank and Non-Bank Financial Sector The Malawi Stock Exchange operates under the The financial system in Malawi is dominated by the Capital Market Development Act of 1990 and the banking sector, which consists of 10 commercial banks Companies Act of 1984. and the Reserve Bank of Malawi, the country’s Central Bank. New banking institutions have begun to enter 2. Fixed Income Markets the market, including numerous specialized banks Government Securities catering to specific industries. All banks and insurance The Reserve Bank of Malawi acts as an agent of the companies, as well as the Malawi Stock Exchange, Malawi Government in the issuance of Treasury bills are regulated and supervised by the Reserve Bank of with maturities of 91, 182 and 273 days. Reserve Malawi. Non-bank financial institutions in Malawi are Bank of Malawi bills are also auctioned to the general M represented by 10 local insurance companies, 1 foreign public. The day count basis convention for Treasury insurance company and 1 reinsurance company. 8 of securities is actual / 365. the insurers are non-life insurance companies. Malawi Treasury Bill Yield Curve (Dec. 2006)

17.68 Capital Markets 17.66 The Malawi Stock Exchange has been in existence 17.64 since 1994, but equity trading had not started until 17.62 17.6 November 1996 when it first listed the National % 17.58 Insurance Company Limited. Prior to this first listing, 17.56 the major activities being undertaken were the 17.54 91 days 182 days 273 days provision of a facility for secondary market trading Source: Central Bank of Malawi in Government of Malawi’s capital market securities, Malawi – 83

Non-Central Government Issuance 4. Investment Taxation There have been no corporate bond issues in the A withholding tax of 15% is levied on income from market. dividend and interest.

Secondary Market 5. Key Contacts Stockbrokers Malawi Limited is the institution • Malawi Stock Exchange established to operate an OTC facility for buying Old Reserve Bank Building, Private and selling of Treasury securities in the secondary Bag 270, Blantyre, Malawi market. Tel: +265-1-624233 Fax: +265-1-623636 3. Foreign Exchange E-mail: [email protected] The Malawi Kwacha (MWK) is a managed floating Web: www.mse.co.mw currency. There has been a steady depreciation of the • Reserve Bank of Malawi Kwacha in the past six years, declining from MWK Mailing Address: Box 30063, 59.40 / 1 USD in August 2001 to KWK 139.34 / 1 Capital City, Lilongwe 3, Malawi USD at the end of 2006, predominantly as a result Other Address: Convention Drive of poor performance of the tobacco exports. Foreign City Centre, Lilongwe, Malawi exchange controls still exist, consequently foreign Tel: +265-1-770.600 investors are required to declare all capital imports Fax: +265-1-772752/265, 774289 so as to support their application, to the Reserve E-mail: [email protected] bank of Malawi, for future repatriation of profits and Web: www.rbm.mw dividends.

MWK Per Unit of USD (Year End)

150

100

50 2000 2001 2002 2003 2004 2005 2006 Source: Bloomberg