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Malawi’s real Gross Domestic Product (GDP) grew 4.6 percent in 2004, up from 3.9 percent in 2003, the National Statistical Office (NSO) said Tuesday.
Lizzie Chikoti, Principal statistician responsible for national accounts and balance of payment, said construction, manufacturing and utilities greatly contributed to the higher national out put.
In 2004, construction was up 10.9 percent against a growth of 13.3 percent the preceding year, manufacturing expanded 6.9 percent from 3.2 percent in 2003 while utilities increased 7.5 percent from 2.4 percent.
Malawi Confederation of Chambers of Commerce and Industry president Agrina Mussa said last week the Bingu wa Mutharika administration last year showed seriousness with issues central to economic recovery.
“The pick of the business community was indeed that all the vagaries, especially those of a fiscal nature, left by the outgoing [Bakili Muluzi] administration would be tackled head on in order to create a climate in which businesses would thrive, or better still, prosper,” said Mussa.
In 2004, Malawi’s macroeconomic environment remained rough, especially in the first half which saw general elections-related expenditures and domestic debt repayments creating budgetary over-runs.
Domestic debt stock rose to K54 billion in 2004 from K45 billion in 2003, the bulk of which came from government overdrafts at Reserve Bank of Malawi and borrowing from the public through treasury bills.
But Mussa said government’s current tight fiscal stance and renewed budgetary support from donors should further slow down domestic debt expansion.
Last year also saw the bank rate falling to 25 percent from 35 percent but annual inflation rose to 11.5 percent from 9.8 percent in 2003.
The kwacha was relatively stable in 2004, thanks to donor support of US$60 million (about K6.5 billion) and increased tobacco exports which helped cushion the local currency.
BHL targets 5-star hotel for Lilongwe
Aubrey Mchulu
Blantyre Hotels Limited (BHL), owners of the four-star Protea Ryalls Hotel in Blantyre, have unveiled plans to build a 250-room luxury five-star hotel and conference centre in Lilongwe at an estimated cost of K1.5 billion.
BHL board chairman David Russell said in an interview on Thursday a market assessment has already been undertaken and an evaluation of the project will soon be concluded.
Russell said commencement of the project will depend on conclusion of an evaluation exercise.
He said about K292 million (two million euros) is already available for the Lilongwe project from the K584 million (four million euros) loan facility from the European Investment Bank, half of which was used in the new Ryalls Hotel.
BHL also reports in its annual report for the year-ended September 30, 2004 that an undisclosed “substantial” third party funding is in place to realise the Lilongwe five-star hotel dream.
Russell said the Lilongwe five-star hotel, which if it opens before the stalled Namiwawa Hotel in Blantyre will be the first in the country, will have a conference centre and other facilities.
He said the plan is to have between 150 and 250 rooms some of which, he said, can be left unoccupied awaiting major events such as summits.
Prudence Chanthunya, Protea Ryalls Hotel sales and marketing manager, said on Tuesday Ryalls Hotel has 94 new rooms in the new wing and 26 renovated ones in the old wing which has also been transformed into a conference centre.
Chanthunya said the Lilongwe hotel will have more business facilities than the Blantyre one.
BHL’s plans to expand to Lilongwe come at a time when the company has gone three years without paying a dividend to its shareholders because of servicing debts incurred to construct the new Ryalls Hotel in Blantyre.
But Russell said the listed company’s shareholders should expect good tidings in the near future after going three years without earning a dividend.
Last year BHL made a profit-after-tax of K7.3 million for the first time in three years but declared zero dividend because it is servicing loans with the European Investment Bank, Industrial Development Corporation and IndeBank.
“Once these loans are redeemed then we will start paying dividends to shareholders,” he said, adding: “We believe the future is bright for the company and its shareholders.”
BHL’s outstanding loans as of September 30, 2004 stood at K724 million.
The firm made a profit-after-tax of K7.3 million last year after registering consecutive net losses in 2002 and 2003 that amounted to K19.6 million and K124.4 million respectively.
BHL’s finance and administration manager Hastings Thembakako said in another interview that the increase in operating profits from K38 million the previous year to K81 million during the year under review is another reflection of the company’s good performance.
“It shows that we have no problems in terms of our operations. A stable currency is good news for us,” he said.
Before selling Shire Highlands Hotel in Limbe for K54 million last December, BHL used to own two hotels in the country, both in Blantyre.
BHL is owned 28.5 percent by Nico Life Insurance Company Limited, 26.4 percent by Africap LLC, 21.6 percent by Press Trust and the remaining 23.5 percent is shared between other shareholders and the public through the Malawi Stock Exchange.
Malawi improves on trade balance
Ephraim Munthali
Malawi’s trade balance fell to K18.9 billion last year from K24.4 billion in 2003 thanks to high export volumes of tobacco, authorities said this week.
National Statistical Office (NSO) figures, however, indicate that although exports rose and the trade balance improved, Malawi’s appetite for imported goods remains high.
Trade balance is the difference between a country’s imports and exports.
According to NSO, Malawi imported (free on board) K73.4 billion worth of products against exports valued at K55.5 billion in 2004.
Compared with the year 2003, the country imported products estimated at K66.7 billion against exports worth K42.3 billion.
Lizzie Chikoti, principal statistician responsible for national accounts and balance of payment, said petroleum products (paraffin, diesel, petrol), fertilizer and coal were the major imports in 2004.
Major exports last year included tobacco, tea, textiles and apparels.
“The trade deficit is still part of an overall worsening trend in trade deficit levels over the past five years,” said Malawi Confederation of Chambers of Commerce and Industry president Agrina Mussa.
But Mussa said although the current account deficit has worsened over the past three years, it has improved as a percentage of Gross Domestic Product from negative 18.4 percent in 2002 to negative 14.1 percent in 2004.
MCCCI economist Sadwick Ntonakutha said the private sector and government should work together to improve trade facilitation by strengthening competition and infrastructure development.
This, he said, can help attain the current government’s vision of turning Malawi from a predominantly importing and consuming country to a principally producing and exporting economy.
The Ministry of Trade and Private Sector Development is currently drawing policies like the private sector development strategy and national export strategy to improve the country’s trade position.
Meanwhile, Ntonakutha said the looming food shortage could worsen the trade gap in 2005 as government is expected to import maize to fill the grain’s deficit.
“The dry spell has wiped out prospects of further improving the trade balance this year,” said Ntonakutha.
Initial estimates from the first round of crop estimates in mid-February this year indicated that the country would harvest about 1.7 million metric tonnes of maize against an annual requirement of 2.4 million metric tonnes.
But the authorities have since said the estimate may have been overestimated by 40 percent—meaning that the situation is more serious than painted by earlier projections.
Secretary for Agriculture Andrew Daudi said last week results of the second round of crops estimates will be announced in Lilongwe tomorrow.
But Daudi said the dry spell across most parts of the country is likely going to reduce projected yields from the initial 1.7 million metric tonnes.
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