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 Feelin’ our content? You really should subscribe ;-) Do it now at www.bammalawi.org 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 Stay Safe Receive offerings and tithes digitally with EcobankPay With many church services currently switching to live streaming, remember you can still receive offerings/tithes digitally with QR payments via EcobankPay with our mobile app. It’s quick and convenient and will allow you to limit cash use. Simply display your Church’s QR code or unique Terminal ID during your live stream to enable congregants to give offerings/ tithes using their mobile devices. If you’re not yet using EcobankPay, contact your local helpline to get started. 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.