The People's Republic of China is working on arrangements to start pouring millions of dollars to finance development projects in Malawi following the Southern African country's decision to switch allegiance from Taiwan and embrace the mainland as a diplomatic ally.
The Malawi government, which has had 42 years of diplomatic ties with Taiwan, announced on December 28 that it had switched its allegiance in favour of the People's Republic of China, forcing Taiwan to abandon several projects it had been financing.
Malawi's Minister of Transport and Public Works, Henry Mussa, says the People's Republic of China, which reportedly dangled a $6-billion financial package for Malawi to persuade the Malawi government to make the landmark decision, has indicated that it will start financing all the projects which Taiwan has stopped funding.
Taiwan has been assisting Malawi in different areas, including health, agriculture, transport, and public works, and the uncompleted major projects that it has been financing in Malawi include the $45-million construction of the Karonga–Chitipa road, in the northern region, and the construction of the new parliamentary complex in the capital city, Lilongwe.
Mussa says the People's Republic of China has assured his government that it will take over funding of all these projects, in addition to funding new development projects.
"A delegation of engineers from the People's Republic of China has already inspected the Karonga–Chitipa road. The delegation included structural engineers, who have assessed the nine bridges that are to be constructed on the road. People should not be worried because we are optimistic that construction of the road will resume soon with the support of the People's Republic of China," says Mussa.
The Malawi government last year entered into an agreement with Taiwan for the latter to finance the construction of the Karonga–Chitipa road, spurning a $45-million loan for the project that was offered by the African Development Bank (AfDB), allegedly because the AfDB tender evaluation team insisted on contracting a firm from the People's Republic of China, which had emerged the preferred bidder during a tender-evaluation process.
The Malawi government proceeded to contract Taiwanese firm Chaser Construction to carry out the project – which started in June last year – but several Cabinet ministers, chiefs, members of parliament and other concerned parties have been complaining about the slow progress on the project, saying it is affecting progress on other projects, notably the uranium-mining project at Kayelekera.
Australian miner Paladin Resources is involved in the mining venture at Kayelekera, where the Karonga-Chitipa road, which is in very poor condition, is the vital link to Malawi's urban centres.
"Part of the equipment cannot be moved to the mining site because of poor transport infrastructure and Paladin wants the assurance that the road would be completed soon. The agreement with the People's Republic of China has given us a sigh of relief," comments Mussa.
Former British secretary for international relations Baroness Lynda Chalker, whose company, Africa Matters, deals with the management of the interface between the public and private sectors in Africa, urges the Malawi government and its partners to ensure that the road is completed as soon as possible for the benefit of the Kayelekera mining project, which is vital for Malawi's economic development.
"Our primary focus is on building closer relationships between the private sector and governments with a view to creating stronger, longer-term partnerships, and that is why we are interested in the role of government as regards Paladin's investment in Malawi. Completion of the road and the mining project will turn the Karonga–Chitipa corridor into a hub of economic activity," says Chalker.
Mussa comments that the agreement with the People's Republic of China will ensure urgency in the completion of all the projects that were previously financed by the Taiwanese because it does away with long processes, such as the retabling of the projects in Malawi's parliament.
"As the government of Malawi, we have negotiated thoroughly on that issue for the benefit of the nation. You will experience a smooth takeover and can rest assured that construction of the Karonga–Chitipa road and the new parliament buidling in the capital, Lilongwe, would be completed even faster," says Mussa.
The Republic of China has also been facilitating the setting up of a fertiliser factory in Lilongwe, which is meant to supply the local market, which depends of imported fertiliser.
Malawi's Foreign Affairs Minister, Joyce Banda, says Malawians should not worry if the Taiwanese abandon such investments because the establishment of diplomatic ties with the People's Republic of China will ensure that investors from the Asian economic giant flock to the country to undertake different ventures.
Friday, 1 February 2008
Malawi businesses should be happy in China despite barriers
The Malawi business community should be optimistic about operations in China, despite the obstacles.
Blantyre Merchants Logistics conducted a survey, which focuses on China and other Asian growth markets.
It questioned a couple of businesses, including wholly owned foreign companies, China–USA joint ventures and USA firms with representative offices in China.
Topics included the characteristics of Malawi operations, investment motives, operational models, market potential and barriers.
New African-backed operations are set up in China every year. The survey found most foreign companies are optimistic about the Chinese economy.
The vast majority, or 80 percent, of respondents said they had achieved or exceeded targets. Production, trade and service firms tend to break even within an average of four years.
There are few complaints about sales momentum in China; with 86 percent of the foreign company’s surveyed saying they were satisfied or very satisfied with sales. Many said their businesses were focused locally rather than export-oriented.
Low operating costs and sourcing are still favorable to foreign-backed firms, according to the survey, despite price rises in some areas.
The manufacturing industry still dominates foreign operations based in China, but trade and service are developing very quickly.
Foreign small- and medium-sized enterprises (SMEs) are increasingly seeing China as a good option, the survey said.
Of the foreign operations with more than 10 years of market presence in China, 12 percent are backed by SME parent companies. But 57 percent of foreign firms in China for four years or less are backed by SMEs. Most foreign SMEs follow their key customers to China, the survey said.
The expansion of the tertiary industry and the boom of SMEs are expected to add diversity and vitality to the market.
Foreign firms prefer to set up wholly owned operations in China rather than joint ventures because of their strategic advantages - such as direct control over Chinese subsidiaries, the survey said.
Of the wholly owned foreign companies in the survey, 86 percent said they wouldn't change their approach to the Chinese market. But only 24 percent of the joint ventures said they would repeat their business strategy, while 44 percent would maybe choose a joint venture again.
Representative offices are no longer as useful to foreign firms operating in China, with only 27 percent of respondents wanting to open them, due to their limited functions. In 2002, that figure was 50 percent.
"As China has eliminated market entry barriers and upgraded its economic structure, the foreign business community has become an integrated and indispensable part of the Chinese economy," said Tony Jones Senior Business Consultant of BMG Holdings USA
Blantyre Merchants Logistics applauds efforts to liberalize legal restrictions to allow foreign companies more freedom to choose the most suitable operating model.
Recruiting and retaining qualified employees is also a difficulty for foreign firms in China, with 27 percent of respondents saying it was a major obstacle and 47 percent considering it a problem.
Non-tariff trade barriers have improved. But 41 percent of respondents said they still have problems in this area, especially in terms of time and capital needed for licenses in China.
“Foreign operations in general are cautiously optimistic for all areas of existing barriers to doing business in China," said Jones
Most survey respondents are positive about market potential in China, and nearly all plan to expand business activities.
The survey also acknowledged the contribution of foreign companies to China's economic and technological progress since the late 1970s.
The report urged policymakers to improve the investment environment, reform the legal system and strengthen IPR protection. It also called for better education and vocational training.
Blantyre Merchants Logistics conducted a survey, which focuses on China and other Asian growth markets.
It questioned a couple of businesses, including wholly owned foreign companies, China–USA joint ventures and USA firms with representative offices in China.
Topics included the characteristics of Malawi operations, investment motives, operational models, market potential and barriers.
New African-backed operations are set up in China every year. The survey found most foreign companies are optimistic about the Chinese economy.
The vast majority, or 80 percent, of respondents said they had achieved or exceeded targets. Production, trade and service firms tend to break even within an average of four years.
There are few complaints about sales momentum in China; with 86 percent of the foreign company’s surveyed saying they were satisfied or very satisfied with sales. Many said their businesses were focused locally rather than export-oriented.
Low operating costs and sourcing are still favorable to foreign-backed firms, according to the survey, despite price rises in some areas.
The manufacturing industry still dominates foreign operations based in China, but trade and service are developing very quickly.
Foreign small- and medium-sized enterprises (SMEs) are increasingly seeing China as a good option, the survey said.
Of the foreign operations with more than 10 years of market presence in China, 12 percent are backed by SME parent companies. But 57 percent of foreign firms in China for four years or less are backed by SMEs. Most foreign SMEs follow their key customers to China, the survey said.
The expansion of the tertiary industry and the boom of SMEs are expected to add diversity and vitality to the market.
Foreign firms prefer to set up wholly owned operations in China rather than joint ventures because of their strategic advantages - such as direct control over Chinese subsidiaries, the survey said.
Of the wholly owned foreign companies in the survey, 86 percent said they wouldn't change their approach to the Chinese market. But only 24 percent of the joint ventures said they would repeat their business strategy, while 44 percent would maybe choose a joint venture again.
Representative offices are no longer as useful to foreign firms operating in China, with only 27 percent of respondents wanting to open them, due to their limited functions. In 2002, that figure was 50 percent.
"As China has eliminated market entry barriers and upgraded its economic structure, the foreign business community has become an integrated and indispensable part of the Chinese economy," said Tony Jones Senior Business Consultant of BMG Holdings USA
Blantyre Merchants Logistics applauds efforts to liberalize legal restrictions to allow foreign companies more freedom to choose the most suitable operating model.
Recruiting and retaining qualified employees is also a difficulty for foreign firms in China, with 27 percent of respondents saying it was a major obstacle and 47 percent considering it a problem.
Non-tariff trade barriers have improved. But 41 percent of respondents said they still have problems in this area, especially in terms of time and capital needed for licenses in China.
“Foreign operations in general are cautiously optimistic for all areas of existing barriers to doing business in China," said Jones
Most survey respondents are positive about market potential in China, and nearly all plan to expand business activities.
The survey also acknowledged the contribution of foreign companies to China's economic and technological progress since the late 1970s.
The report urged policymakers to improve the investment environment, reform the legal system and strengthen IPR protection. It also called for better education and vocational training.
Rwanda/Malawi: Taifa Stars Face Malawi
Instead of facing Rwanda, the Taifa Stars of Tanzania will play against Malawi in the international build up game scheduled for February 6 in Dar es Salaam.
The Ferwafa Chief Executive Officer, Jules Kalisa confirmed this development saying that TFF sent a late fax on Monday evening informing Ferwafa of a change in schedule.
"TFF has postponed our friendly game until March 26 meaning that Rwanda will not play against Taifa Stars on February 6 as it had been scheduled," Kalisa said. Kalisa said that Amavubi Stars are likely to travel to Burundi for a friendly on February 6.
"Burundi seems is ready to host us (Rwanda) in Bujumbura," Kalisa added. Meanwhile, a 22-man squad started residential training yesterday at Nyamirambo stadium ahead of the Burundi friendly.
However, no professional player has been summoned to join the squad.
Rwanda who are grouped with Morocco, Mauritania and Ethiopia begin their qualification campaign on May 31 against Mauritania before playing Ethiopia on June 7 and the Atlas Lions a week later.
On June 21, Rwanda will head to Rabat for a return leg against Morocco, on September 7; Rwanda will travel to Mauritania for the second leg before winding up the campaign with a home game against Ethiopia on October 12. Meanwhile, former Atraco striker Athumani Machupa has been recalled to the Taifa Stars team.
Tanzania will test themselves against Malawi, a team they lost to in the 2008 Nations Cup qualifier.
The Ferwafa Chief Executive Officer, Jules Kalisa confirmed this development saying that TFF sent a late fax on Monday evening informing Ferwafa of a change in schedule.
"TFF has postponed our friendly game until March 26 meaning that Rwanda will not play against Taifa Stars on February 6 as it had been scheduled," Kalisa said. Kalisa said that Amavubi Stars are likely to travel to Burundi for a friendly on February 6.
"Burundi seems is ready to host us (Rwanda) in Bujumbura," Kalisa added. Meanwhile, a 22-man squad started residential training yesterday at Nyamirambo stadium ahead of the Burundi friendly.
However, no professional player has been summoned to join the squad.
Rwanda who are grouped with Morocco, Mauritania and Ethiopia begin their qualification campaign on May 31 against Mauritania before playing Ethiopia on June 7 and the Atlas Lions a week later.
On June 21, Rwanda will head to Rabat for a return leg against Morocco, on September 7; Rwanda will travel to Mauritania for the second leg before winding up the campaign with a home game against Ethiopia on October 12. Meanwhile, former Atraco striker Athumani Machupa has been recalled to the Taifa Stars team.
Tanzania will test themselves against Malawi, a team they lost to in the 2008 Nations Cup qualifier.
Mozambique: Malawi to build oil pipeline to city of Beira
Johannesburg, South Africa, 31 Jan – The Venessia Petroleum company of Qatar has been contracted to build an oil pipeline between the city of Beira in Mozambique, and Nsanje in Malawi, according to South African website BizCommunity.
On Tuesday, government officials from Malawi said that the contract had been signed on 21 January and also that the project, which is due to be concluded within 36 months, included the pipeline and storage facilities to increase the country’s reserves from 10 to 90 days.
Fuel is currently transported from Beira in tanker trucks, which travel through Tanzania, and this projects aims to reduce the cost of importing fuel to Malawi.
The Malawian secretary of state for Energy and Mines, Charles Msosa said that the project was part of the Chire-Zambezi development plan, which has been agreed with Mozambique.
Malawi’s energy minister, Henry Banda, said that Malawi was following with interest the Nacala refinery project, which is expected to serve the regional market.
The refinery investment project, to the value of US$5 billion, was approved last October.
Construction and operation of the pipeline will be the responsibility of Ayr Petro-Nacala, a US oil company from Texas, which also has three South African and one Mozambican investors.
The unit will have a production capacity of 100,000 barrels per day of several types of fuel (gasoline, lighting oil, aircraft fuel, and others).
On Tuesday, government officials from Malawi said that the contract had been signed on 21 January and also that the project, which is due to be concluded within 36 months, included the pipeline and storage facilities to increase the country’s reserves from 10 to 90 days.
Fuel is currently transported from Beira in tanker trucks, which travel through Tanzania, and this projects aims to reduce the cost of importing fuel to Malawi.
The Malawian secretary of state for Energy and Mines, Charles Msosa said that the project was part of the Chire-Zambezi development plan, which has been agreed with Mozambique.
Malawi’s energy minister, Henry Banda, said that Malawi was following with interest the Nacala refinery project, which is expected to serve the regional market.
The refinery investment project, to the value of US$5 billion, was approved last October.
Construction and operation of the pipeline will be the responsibility of Ayr Petro-Nacala, a US oil company from Texas, which also has three South African and one Mozambican investors.
The unit will have a production capacity of 100,000 barrels per day of several types of fuel (gasoline, lighting oil, aircraft fuel, and others).
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