Guide to Business Development
Malawi Business Directory
Background on Malawi - see below
Doing Business in Malawi
Malawi's Economy
Currency exchange Rate
CNN Hotels - Includes exchange rate
Currencies of the World

UNDP Project Document (PRODOC) Sustainable Development Networking Programme (SDNP) in Malawi

BACKGROUND ON MALAWI
The Republic of Malawi became an independent state on 6th July, 1964 and attained republican status on 6th July, 1966.

During the first Republic, the Government amended the constitution to embrace one party rule which was dictatorial. Consequently, there were many detentions without trial, forced exile, disappearances and suppression of freedoms of worship, assembly, association, conscience and expression. Malawi's foreign policy at that time was, thus, based on retrogressive preferences of the leadership.

Following the coming in of a democratically - elected government under a multiparty system, was the provisional entry into force of a new Constitution, with an enshrined Bill of Rights, on 18th May, 1994. The Constitution came into force definitively on 18th May, 1995.

The Constitution of the Republic of Malawi is based on a number of fundamental principles. Some of these are:

(a) that a Constitution order shall be created in Malawi based on the need for an open and democratic government;

(b) that the Constitution is the supreme law of the land and no institution or person shall be above the law;

(c) that the authority to govern derives from the people of Malawi as expressed through universal and equal suffrage;

(d) that human rights and fundamental freedom shall be promoted and upheld.

It is against this background of a renewed hope and optimism for the future that the Foreign Policy of the Republic of Malawi is presented.

Malawi Ahall thus actively promote the welfare and development of the people of Malawi, with particular emphasis on the attainment of gender equality, promotion of good health and self sufficiency, provision of adequate health care, the enhancement of the quality of life in rural communities, the provision of adequate resources for education, support for persons with disabilities, the full development of healthy and responsible children, the protection of the family as a fundamental social unit, the respect and support for the elderly, the sound and responsible management of the environment for present and future generations, respect and support for the law of nations and the further development thereof in regional and international affairs, peaceful settlement of disputes, humane application and enforcement of laws and policing standards, nurturing of a market economy and long term investment in socioeconomic programmes and the guaranteeing of accountability, transparency, personal integrity and financial probity for public institutions and officers.

Malawi has undergone a social and political transformation over the past few years. These changes have created a new Malawi - a Malawi that is poised on the threshold of the 21st century to transcend its past and develop into a stable, valuable business partner.

The inauguration of the new government in May 1994 has further assured the world that Malawi will not only stay the course of free and open markets, but will continue to reduce government control over the private sector, simplifying administrative procedures and improving the foreign investment climate.

Malawi offers an excellent package of incentives and tax concessions to encourage investment. Malawi's low wage rates and central location offer the investor a great place to set up operations from which to provide goods and services to the growing economies of Botswana, South Africa, and the rest of Central and Southern Africa; We cordially invite you explore the wonder and stability that makes Investing in Malawi a Smart Choice.

GOVERNMENT
The inauguration of a new government in May 1994 not only brought about Malawi's first democratically elected government in 30 years, but it also brought with it a new constitution. This constitution guarantees the people of Malawi freedom of speech, religion, and assembly. Malawi has a tricameral system of government which is comprised of Executive, Legislative, and Judicial branches. The president is elected to a five-year term of office, and all those 18 years of age and older are eligible to vote. The government is committed to encourage the private sector to assume the leading role in the economic development of the country. The government's role is to facilitate rather than regulate investment.

ECONOMIC CONDITIONS
Malawi has always stood as a stable free market beacon in a continent enveloped in command economy fervour. Even through some of the most difficult times of drought, famine and war in nearby countries, Malawi has stayed firm to its commitment toward capitalism. The drought of 1992, which was the worst drought to afflict Southern Africa in memory, slowed the tremendous growth Malawi had achieved the two years previous. But true to form, the resolute and determined people of Malawi have overcome this set back and are looking to the future with more hope and promise than ever before.

TRADE
Malawi is central and easily accessible to Central and Southern Africa. This makes Malawi a choice location from which to trade with these nations, some of which are among the fastest growing economics in the world. Malawi imposes virtually no restrictions on exporting, and being a signatory to many major trade agreements makes Malawi an ideal location from which to export to nations throughout the world. Countries and trading blocks to which Malawi has preferential access include:

The European Union - through the Lome' Convention, agricultural products and virtually all manufactured goods have preferential access to all member states of the EU.

Eastern and Southern Africa - Malawi has a bilateral agreement with South Africa whereby Malaawi's exports receive reduced tariffs upon entry to that country. Malawi is also a participant in the Preferential Trade Area for Eastern and Southern Africa (PTA), and the Southern Africa Development Community (SADC).

Malawi is also a member of the General Agreement on Tariffs and Trade (GATT) and the General System of Preferences .

INDUSTRY
Several Industrial estates have been established to attract foreign investment to Malawi. These estates have nearly eliminated any obstacles lnvestors experience in acquiring land for factory sites. Furthermore, the creation of export processing zones is actively encouraged by the government's establishment of special incentives strictly for this purpose.

Setting up a manufacturing operation does not require a license exept for a small number of industries which raise the specter of health and safety concerns. Although the Reserve Bank is required to approve international loans, licensing and royalty arrangements, and certain technology transfer schemes, investment approvals are automatically granted within international prevailing standards.

MONEY, BANKING, AND FINANCE
The currency of Malawi is the Kwacha. One Kwacha = 100 Tambala. In February 1994, the government established a market determined exchange rate for the Kwacha. Exporters are now permitted to operate foreign currency accounts in authorized banks in Malawi, and anyone can apply to open up bureau de change locations throughout the country.

Travellers cheques and foreign currency notes of all major currencies are accepted by authorized hotels and other institutions. Malawi does not put any restriction on the amount of foreign currency notes visitors may bring into the country, nor are there any restrictions on the repatriation of profits.

In the bid to increase the availability of and access to financial resources and services, the Government has embarked on an ambitious reform programme to liberalise and modernise the financial system. Some of the features are market-based interest rates, no direct government control on credit, and unrestricted access to financing facilities for both local and foreign investors.

TOURISM
Malawi is known as the Warm Heart of Africa for good reason. The people are friendly and hospitable, the climate temperate, and the views breath-taking. Being steeped in the free market all of their lives, the young and the enterprising are willing and able to offer investors an invaluable resource in which to develop tourist destinations.

Tourism spending in Malawi has increased four-fold since 1985, with average expenditures per tourist during this time period increasing by over 40 percent.

MINING
Malawi is endowed with mineral resources which are currently not being exploited. Unfortunately, the minerals sector has suffered from a chronic lack of investment in basic infrastructure. The government encourages private investors to delineate, evaluate, and where viable, capitalise on the resources using appropriate technologies. Great opportunities exist for the investors wishing to exploit coal, uranium, bauxite, vermiculite, gemstones, and hydrocarbons.

AGRICULTURE
Agriculture accounts for over 40 percent of all employment and over 80 percent of all exports, including tobacco (the leading export), tea, sugar, and coffee. Most of these exports are raw agricultural products, which are then processed elsewhere. This sector offers some of the greatest opportunities for investors, especially in developing related industries such as fertilizer and pesticide plants, and expanding cash crop production.

TELECOMMUNICATIONS
The telecommunications network in Malawi is rapidly improving, becoming one of the most reliable - and inexpensive - in the region. International direct dialing is now available on 98 percent of the country's phones. In an effort to bring Malawi's communications system more in line with the rest of the world, thousands of digital lines are being installed in the major cities each year.

CONCLUSION
The present brief is not exhaustive but only covers some areas that could be of interest to the symposium. Other areas of interest could be discussed on cuff. Such areas could be more in-depth discussion on activities of statutory bodies like ADMARC or Air Malawi; the legal system; and relation with other SADC countries.