Blantyre, Malawi: Potential Opportunities for Investors - Millennium ...

Foreign exchange
Supply of foreign exchange has been
scarce although it has always been
limited in Malawi. However, the period
of November 2008 to March 2009 has
been especially difficult due to the
foreign exchange outflow on account
of high oil prices and fertiliser subsidy
provided by the government.
The government tried to protect the
consumer, by maintaining low prices
after the oil price had almost tripled
leading to a piling up of oil defi cit”
Malawi Confederation of Chambers
of Commerce and Industry
The bank rate, as of April 2009, is
145 kwacha for US$1 but exchange
bureaus sell US$1 at about 180
kwacha clearly indicating that the
kwacha is overvalued. A correction of
the kwacha is expected in the near
future which may ease the supply of
foreign exchange.
Companies are wary of borrowing
abroad in US dollar due to the high risk
of fluctuation in the value of the kwacha.
Public utilities
Only seven percent of residents
have access to electricity in Malawi.
Average electricity disruptions have
been close to 30 hours a month,
leading to productivity losses of
up to one to two percent 1 . The lack
of generation capacity, theft and
delinquent customers have been
quoted as reasons for an ineffi cient
electricity supply. The businesses
in Blantyre typically use diesel
generators, solar panels and wood as
alternatives to electricity.
An average business faced water
interruptions of at least seven days
a month, each lasting an average of
six hours 2 . Water bores and water
tanks are alternatives used by local
businesses. There is a need for
investment in water supply projects
to replace old pipes. A US$8 million
gap 3 is hampering the water facility
upgrading project.
Blantyre, Malawi: Potential Opportunities for Investment 22
Expatriates
Employing expatriates can be diffi cult
and has been found to be a time
consuming process. Investors of
US$50,000 or more, are eligible
for Business Resident Permits and
Temporary Employment Permits within
40 days of approval of their investment.
The processing time for these,
however, can reach four months 4 .
1,2,3, Columbia University — Assessing Infrastructure
Constraints on Business, Malawi, December 2008
4 Report on the Regulatory Framework for Foreign
Direct Investment,DLA PIPER US LLP
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