MALAWI GETS AfDB TOURISM BOOST

Malawi government has secured $800,000 (about K660 million) from the African Development Bank (AfDB) to help recoveries in the country's tourism sector.

The grant comes at a time when SADC countries are pulling up efforts in resuscitating the hospitality sector back to the period before the pandemic.

Malawi's Minister of Tourism and Culture Michael Usi, made the announcement in Lilongwe during the commemoration of the World Tourism day where he said the money would be used for matching grants by small-scale players in the hospitality and tourism industry.

The grant is expected to benefit 50 micro, small and medium tourism enterprises which are struggling to access finance to enhance their competitiveness.

“Disbursement of the matching grant would commerce in the coming month. We are putting in place policies to ensure that local communities directly participate in the tourism value chain rather than operate on the peripherals of the tourism industry,” Minister Usi said.

The funds would cushion beneficiaries from possible effects of the Covid pandemic and help them take a step towards recovery as the sector is one of the hardest hit where, in 2020 alone, over 300,000 people lost their jobs.

Recent figures indicate that the tourism sector directly supported 3 percent of employment in Malawi, creating about 233,000 jobs.

The sector has for a long time been beamed as the game changer for Malawi if nurtured well.

In its efforts to boost the sector, Malawi introduced a five year strategy for marketing the country to the world in order to increase tourists’ inflow, 'The Strategic Tourism Marketing Framework'.

The strategy redefines Malawi’s tourism product lines in the scope of Experience Lake, Experience Nature, Experience Wildlife, Experience Culture and Experience Mice.

It is earmarked to market Lake Malawi, which is the fifth largest fresh-water lake in the world by volume, the ninth largest lake in the world by area and the third largest and second deepest lake in Africa with high endemic fish bio-diversity.

The nature scope encompasses the country’s diversity of landscape including tea estates, forest reserves, streams, waterfalls, mountains and plateaus.

The strategy also sells Malawi’s cultural practices and cultural village setup to give tourists a feel of typical village life.

This year’s World Tourism Day was commemorated under the theme 'Tourism for Inclusive Growth'.

AFRICA ON THE MOVE FOR POVERTY ELIMINATION

                                                   

African countries have been called upon during the 13th session of the African Continental Free Trade Area (AFCTA) to explore new and progressive initiatives that will lift it's people out of poverty.

The summit which was held virtually in light of the global Covid-19 health pandemic has put into motion the free trade treaty which was launched in 2018 in Kigali Rwanda that will create a giant continental market of 1.3 billion people with about 2.3 trillion US dollars.

When addressing the summit, current African Union (AU) chairperson and president of South Africa Cyril Ramaphosa said the AFCTA is an initiative to create an integrated prosperous continent.

He said the AFCTA provides an opportunity for the growth of the private sector which he said must rise to the occassion by supporting the continental efforts through human and financial capital.

His Excellency - Cyril Ramaphosa 

He said, :"This our treaty presents immense opportunities for the private sector in Africa and will be a catalyst for the development and expansion of private enterprise on our continent. We call on the private sector to be our partners in this journey and provide support to this continental effort through the development of human and financial resources and investments in the areas such as infrastructure and technology ".

Adding in his speech, the AU chair said the treaty must facilitate greater acfews for women on trade and investment opportunities.

In his remarks, chairperson of the African Commission Moussa Faki Mahatma said the trade treaty is a game changer for the continent of Africa.

"We are now fulfilling an old dream of the founding fathers that is it's establishment and all the African markets, since 1963 to date, it has been a long way despite all the hiccups that they have faced and the natural disasters like Covid-19 this Africa has faced". Said Mahatma.

Secretary general of the AFCTA Wamkele Mene hailed a recent World Bank study which noted that if implemented effectively, the AFCTA has potential to lift 30 million Africans out of extreme poverty and 70 million out of moderate poverty by 2035.

Mene - It will take resolute determination

He said, "As much progress as we have made, integrating 55 markets will not be easy, it will be difficult, it will be a daunting task, it will take resolute determination decade after decade. However, to throw our hands in the air and say the task is too difficult is not an option "

Fifty four countries have signed up for the African Continental Free Trade Area which is expected to come in full course on 1 January 2021.

MW, MOZA STRENGTHENS RAILWAY SYSTEM

 The countries of Malawi and Mozambique have engaged each other in rehabilitating the railway lines which for long time has linked the two countries as a way of reviving the mode of transport.

The project, will in other scenario help in softening transportation cost in Malawi which is currently high among all Southern Africa Development Community (SADC)  countries.

According to Malawi ministry of transport statistics, the average cost for rail and road transport is as high as 10 dollars per tonne than 7 dollars per tonne which is a recommended cost in the region.

On Malawi side, the rehabilitation of the railway line will be from Limbe to Sadama and also from Marka in Nsanje to Bangula in Chikwawa by joint efforts between Central and East Africa Railway (CEAR) and Malawi government respectively.

According to Malawi ministry of transport spokesperson Andrew Mthiko, some processes have already began in ensuring that the future of the project is intact and impressive.

He said, :"We have started the procurement process by tendering out and people have submitted bids. We are evaluating the bids and we expect that by the end of this month a consultant will be identified. "

"some processes have alreadt began"-Mthiko

On Mozambique side, the rehabilitation of the line will be via Sena Line through the Mutarara-Vila Nova de Fronteira and Vila Nova da Fronteira -Bangula branch.

Mozambican minister of transport and communications Janfar Abdulai said they are also on the move in ensuring the progress of the project.

He said, :"Funds are being raised through traditional international cooperation partners to furnish the project. The second phase of the project would see the Beira-Lilongwe section being established. "

"funds are being raised"-Abdulai

The branch line is 115 Kilometres long, of which 44 Kilometres are on the Mozambican side between Dona Ana and Vila Nova da Fronteira, and the remaining 71 Kilometres on the stretch from Vila Nova da Fronteira to Nsanje-Bangula in Malawi.

The intention behind connecting the Sena Line, between Mutarana and Bangula, is to easily export Sugare to the European market through the port of Beira.

Sugar is in the top five of Malawi exports and the European Union is it's main export partner with almost 50 percent of exports. on the other hand, Mozambique Sugar confectionery accumulated to about 91.4 million dollars in 2019.

Mozambique injects USD30m

The resumption of the rail link follows the understandings between the Mozambican President, Filipe Nyusi, and his Malawian counterpart, Lazarus Chakwera, in October, when the two leaders met in Tete.

The official signing of the Memorandum of understanding (MoU) after the two leaders met, was done in Beira by Mozambique's Minister of Transport and Communications, Janfar Abdulai and Malawi's Minister of Transport and Public Works, Sidik Mia.

MALAWI YET TO DECIDE ON CRYPTOCURRENCY

The Reserve Bank of Malawi has revealed on a side-lines of the Financial Services Lawyers Conference that it is yet to decide whether Malawi is to start using the cryptocurrency. 

The bank said it is to do some consultations with stakeholders before it legalise the system even though some circles are already in use of it.

Speaking at the conference, RBM General Council and Bank Secretary, George Chioza, said as it stands currently, the digital asset is illegal.

He said, : “At the moment, Malawi is really on the border line. We have not said yes or no but we know there are cryptocurrencies. Take caution when you are dealing in those currencies,” Chioza said.

Cryptocurrency is a digital means of exchange that uses strong cryptography for financial transactions which includes: Bitcoin, Litecoin, Ethereum, Zcash, Dach and Ripple.

Adding to the remark, RBM’s Ethics and Compliance Manager, Thabo Chakaka Nyirenda said cryptocurrency is very difficult to monitor transactions and even money laundering due to the complex mathematics which are involved.

“The dilemma is that some commentators have expressed fears that outright banning of digital currencies would force users to go underground where they will continue to operate without anti-money laundering oversight hence, the need to counterbalance the risks and the benefits.” Said Thabo.

Cryptocurrency is legal in countries like: Zimbabwe, South Africa, Namibia, Nigeria, United States and Costa Rica among others.

NEWCASTLE DISEASE BLOWS MILLIONS ANNUALLY

It has been known that Newcastle, a poultry disease which appears during the hot seasons, blows millions of Kwacha's every hear in the country.

In an interview with the National Coordinator for Smallholder Poultry Farmers Association of Malawi (SPOFAM) Ernest Wyson, said ninety percent of revenue is lost in Malawi from traditional poultry keepers through the disease.

He said, : "Up to ninety percent of village chicken stocks are lost annually in affected stocks in Malawi, traditional poultry keepers lose millions of Kwacha's annually."

In Malawi, the disease appears two to three times a year during the hot months and do kill many chickens within a few days or a week.

According to Wyson, under extreme temperatures that are sometimes associated with climate change, some poultry can hardly cope with the conditions considering their body temperatures.

He also added that the disease is spread directly by contact between sick and healthy chickens and also that farmers should try as much as possible to keep their birds under minimum recommended temperatures.

While other farmers opt for several remedies to cure the disease, Wyson reminds that there is no treatment for Newcastle disease but can be prevented using vaccines which he also stressed the upsurge of the disease is due to lack of the vaccines and care more especially in the traditional poultry keeping.

"Vaccination against Newcastle will protect only against Newcastle disease, not other diseases. Chickens vaccinated against Newcastle disease may still die of other diseases. Vaccination of chickens against this disease is cheap and it is one of the most important ways in which to improve chicken production." Said Wyson.

COVID 19 STILL HAUNTING TOURISM SECTOR

Malawi Tourism Council (MTC) an umbrella body for tourist operators in the country, has been engaging the government to bail out the tourism sector to recover as it has been the hardest hit by the Covid 19 pandemic.

The council has expressed worries for the tourism sector being overrun of support in the 2020/21 national budget which has been estimated at K2.2 trillion which in turn it says could have boosted it's recovery.

According to a statement released recently by the MTC, the board is in awe as to why the budget was silent on the support for the tourism industry, which is one of the hardest hit by the pandemic and has lost more than 35,000 jobs since March.

"More than ever, the industry, which makes substantial contribution to the economy, needs a swift government intervention while realising that full recovery for the industry is projected for a couple of years or longer." Reads part of the statement.

It is clear that players in the tourism sector are advocating for the suspension of pay as you earn (PAYE), temporary waiver on fixed utility bills such as electricity, suspension of interest on bank loans against a revised interest rate, suspension of withholding tax payments, postponing payment of licences and permits on food and beverages.

Recently, the Principal Secretary in the Ministry of Tourism, Wildlife and Culture, Isaac Katopola admitted that the request by the MTC officials for government to bail them out was made through the Ministry of Finance and the Reserve Bank of Malawi.

He said the request mainly focused on two areas either to make a once-off payment or pay part of the salaries of compliant tourism operators for at least three months to ease possible closures of companies but stressed that the government has to look where to get the finances.

Said Katopola, : "Another request was on possible cuts on utility charges that are calculated based on maximum demand, this is still being considered but the covid 19 business challenges and possible solutions are like unchartered waters that may take time to deal with."

The economy has lost about K40.5 billion in the tourism sector between April and June and needs about K7.3 billion monthly as bail out to cutter for staff bills.

NEW TAX MEASURES TO HURT CONSUMERS

One of the audit firms in the country, EY has stressed that the newly introduced 16.5 percent Value Added Tax (VAT) on cooking oil which comes into effect on 1 October 2020 will hurt consumers.

The firm said in its tax update for the 2020 national budget that there is need for Treasury to engage oil manufacturers on the introduced VAT and consider making the price of cooking oil VAT inclusive to reflect the intention of the government.

The update reads, : "The manufacturers continue to benefit importation of raw materials duty free through the industrial rebate scheme. There will, therefore, be no expectation of increased oil prices since the oil industry is protected from adverse competition under the surcharge tarrif regime. However, VAT is a consumption tax, and the final consumer bears the final burden".

Minister of Finance, Felix Mlusu announced in the 2020/2021 National Budget Statement that the tax free bracket will be increased subject to enactment of the taxation amendment bill 2020.

The increase will be from K45,000 per month to K100,000 per month and the 15 percent middle tax bracket has already been proposed in the bill to be removed.

According to EY, the eleventh schedule to the taxation act was amended in 2019 and it applies not only to pay as you earn individuals, but to " individuals" business income as well.

The firm said, : "It is hoped that the proposed amendment will clarify on the scope of the intended disparity on allowable deductions  between the corporate entities and individual business income".

EY stresses that the proposed amendment on Capital Gains Tax, if not carefully analysed and pragmatically drafted, may cause confusion to the tax payers.

Income that accrues to a tax payer under section 11 of the taxation act, is income to which the taxpayer has a vested rather than a contingent right.

In a sense that a vested right is a right of ownership, including the right of enjoyment, which may however be postponed, and that a contingent 'right' is a  chance or a possibility of a right.