{"id":2555,"date":"2021-07-19T13:13:26","date_gmt":"2021-07-19T13:13:26","guid":{"rendered":"https:\/\/www.africa-press.net\/malawi\/?p=2555"},"modified":"2021-07-19T13:09:06","modified_gmt":"2021-07-19T13:09:06","slug":"country-report-malawi","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/malawi\/all-news\/country-report-malawi","title":{"rendered":"Country report Malawi"},"content":{"rendered":"<p><span style=\"color: #ff6600\"><strong><a href=\"https:\/\/www.africa-press.net\/\">Africa-Press<\/a> &#8211; <a href=\"https:\/\/www.africa-press.net\/malawi\">Malawi<\/a>. <\/strong><\/span>General Overview<\/p>\n<p>Malawi is a landlocked countryin southeast Africa that was formerly known as Nyasaland. It is bordered by Zambia to the northwest, Tanzania to the northeast, and Mozambique on the east, south and west. Malawi is over 118,000 km2 (45,560 sq mi). Its capital is Lilongwe, which is also Malawi\u2019s largest city. The name Malawi comes from the Maravi, an old name of the Nyanja people that inhabit the area. The country is also nicknamed \u201cThe Warm Heart of Africa\u201d.<\/p>\n<p>According to the 2017 revision of the World Population Prospects the total population was 18,091,575 in 2016, compared to only 2 881 000 in 1950. The proportion of children below the age of 15 in 2010 was 45.8%, 51.1% was between 15 and 65 years of age, while 3.1% was 65 years or older.<\/p>\n<p>Economic Overview<\/p>\n<p>In 2017, Malawi\u2019s GDP growth rate is expected to rebound to about 4.5% from 2.5% in 2016. Improved weather patterns with increased rainfall in 2017 are expected to result in higher levels of agricultural output than were recorded in 2015 and 2016. Agriculture contributes 30% of GDP. The country\u2019s headline inflation rate continues to decelerate faster than anticipated, falling to 9.3% in August 2017, compared to 22.8% in August 2016.<\/p>\n<p>This downward trend has largely been due to a sustained decline in food prices resulting from the increased availability of maize, and a stable exchange rate.<\/p>\n<p>Sustainable growth is predicated on sound macroeconomic management and structural reforms to lay the foundations for a more resilient and diversified agriculture sector.<\/p>\n<p>In 2016\/17, adequate rainfall improved agricultural production, increasing the maize, groundnuts, and beans harvests. The economy is expected to double its 2016 GDP growth rate of 2.3% to 4.5% in 2017. The medium-term outlook (5%\u20135.5% in 2018\u201319) is more positive as the economy stabilizes.<\/p>\n<p>Macroeconomic evolution<\/p>\n<p>Macroeconomic stability showed signs of improvement during the past 12 months. Year-on-year inflation dropped considerably, from 218% in 2016 to 12.3% in 2017. The Reserve Bank of Malawi started to ease monetary policy by reducing the policy rate by 600 basis points to 18% in July 2017.<\/p>\n<p>Tailwinds<\/p>\n<p>Higher rainfall in 2016\/17 was a key contributor to the overall macroeconomic situation in Malawi. First, domestic production of maize increased 36%, which eliminated the fiscal pressures of maize importation. The government is implementing fiscal reforms and improving accountability and transparency systems, which are starting to bring back development partners that withdrew budget support following the Cash Gate Scandal. Earlier in 2017, the government received $80 million in general budget support to strengthen policy and institutional reforms in agriculture and to enhance public financial management systems.<\/p>\n<p>Headwinds<\/p>\n<p>Economic performance depends largely on weather conditions, which are expected to be more variable due to climate change. The country\u2019s economic outlook is greatly influenced by agricultural performance, government economic management programs, global commodity prices, and donor support. Maintaining financial sector stability is a key priority. Efforts are under way to strengthen capitalization of banks.<\/p>\n<p>Key sectors in Malawi<\/p>\n<p>Malawi\u2019s industry sectors employ only 10% of the total working population. It contributes almost 20% of the country\u2019s GDP and has a negligible share in the total export volume. The oil sector is the most developed industry sector in Malawi.<\/p>\n<p>Some of the major Malawi industry sectors are:<\/p>\n<p>\u2022 Mining sector: This sector has huge scope for future expansion. As of 2008, the mining sector was largely focused on industrial minerals that are consumed locally. However, the country also has significant reserves of bauxite, phosphate, uranium and mineral sand. If the government supports the development of the mining sector, it can contribute largely to the country\u2019s GDP growth rate.<\/p>\n<p>\u2022 Textile industry: Malawi\u2019s export list includes textile products as well. The industry receives inputs from the agricultural sector. The country exports finished apparels to neighboring African nations.<\/p>\n<p>Since the 2000s, the Malawian government has been carrying out various initiatives to develop the major industrial sectors. This includes encouraging private and foreign investment by creating a favorable climate.<\/p>\n<p>Tourism in Malawi<\/p>\n<p>Efforts by the Government to improve hotel services have been enhanced by the grading exercise that began about two years ago. A number of properties have been awarded three or four stars and others look set to achieve five-star status as the process of grading continues.<\/p>\n<p>More exciting still has been the progress made by our country in wildlife management. The Majete Wildlife Reserve is now home to Malawi\u2019s Big Five thanks to a private-public partnership with African Parks, while efforts to increase wildlife numbers in Liwonde National Park are bearing fruit.<\/p>\n<p>The Government now regards tourism as a priority sector and will give the industry every assistance in its efforts to contribute more to the national economy in line with the Malawi Growth and Development Strategy (MDGS).<\/p>\n<p>The Ministry will continue to work with the private sector to promote Malawi as a unique destination of choice.<\/p>\n<p>The Ministry of Industry, Trade and Tourism has said that tourism is key to Malawi\u2019s economic growth since it has been contributing to Gross Domestic Product (GDP) and creating jobs.<\/p>\n<p>On his take on the role of tourism in providing job opportunities, the sector has supported about 446, 000 jobs representing 6.2 percent of employment in the country.<\/p>\n<p>The 2016-2021 Tourism Development Strategic Plan has targeted to tourism from 804, 000 visitors in 2014 to 1.2 billion in 2021 and contribute 10 to 15 percent of the GDP.<\/p>\n<p>Taxes in Malawi<\/p>\n<p>Malawi does not have separate legislation for the determination of taxable income of different types of legal persons. Taxation of all income is included in the Taxation Act.<\/p>\n<p>Section 11 of the Taxation Act defines income as the total amount in cash or otherwise, including any capital gain, received by or accrued to a person in any year or period of assessment from a source within or deemed to be within Malawi. The taxpayer\u2019s assessable income excludes any amount exempt from tax under this Act.<\/p>\n<p>Income deemed to arise in Malawi:<\/p>\n<p>The liability for Malawi tax is based on whether the income is sourced from Malawi, irrespective of the residence of the recipient of such income. Certain transactions may be deemed to be from a source within Malawi even if carried out outside Malawi. Section 27 of the Taxation Act limits the income that may be deemed to have arisen in Malawi to the following:<\/p>\n<p>\u2022 Remuneration for services rendered or work performed in Malawi.<\/p>\n<p>\u2022 Remuneration for services rendered or work performed in or out of Malawi where the amount may be claimed as a tax-deductible expense by a permanent establishment (PE) in Malawi.<\/p>\n<p>\u2022 Amounts incurred, claimed, or claimable in connection with a PE in Malawi.<\/p>\n<p>\u2022 Realised exchange gains and losses arising in connection with a PE in Malawi or foreign exchange assets and liabilities held in Malawi.<\/p>\n<p>\u2022 Capital gains and losses realised with respect to tangible property located in Malawi and interests in companies incorporated in Malawi.<\/p>\n<p>\u2022 Interest not charged on a loan by a lender to another person is deemed to be income accruing to the lender.<\/p>\n<p>There are no local income taxes in Malawi.<\/p>\n<p>Non-resident tax<\/p>\n<p>Non-resident tax is payable on income sourced from Malawi at the rate of 15% of the gross income and 10% for income derived from a mining project by way of interest, royalty, payment for independent personal services, or dividend.<\/p>\n<p>Any income payable to a person who is not resident in Malawi (i.e. who has not been in Malawi for an aggregate period of 183 days) arising from a source within Malawi is liable to a final WHT of 15% of the gross of such income. Non-resident tax is applicable where the recipient of the income does not have a PE in Malawi from which the income emanated.<\/p>\n<p>Non-resident tax may not be withheld on income of residents of countries that have a standing double tax agreement (DTA) with Malawi, subject to the provisions of the specific DTAs. For details of applicable WHT rates, see the Withholding taxes section. Currently, the following countries have a DTA with Malawi: Denmark, France, Norway, South Africa, Sweden, Switzerland, and the United Kingdom.<\/p>\n<p>Investing in Malawi<\/p>\n<p>Malawi is today\u2019s the preferred choice as a location for foreign direct investment. While small in physical size and land locked, Malawi enjoys close proximity and easier access to the nearby seaports of the world. Malawi also enjoys direct air links with major airports in southern Africa region which facilitate the movement of passengers as well as freight.<\/p>\n<p>These international airports include; Johannesburg (South Africa), Lusaka (Zambia) and Nairobi (Kenya). There are inter-linkages in telecommunications and road networks which connect with SADC, COMESA regions and beyond. Exporting products from Malawi is made easier by proximity of seaports from neighboring countries.<\/p>\n<p>Malawi is now home to over fifty FDI companies from USA, UK, Japan, China, RSA, and Germany amongst others. These companies operate mainly in the manufacturing and processing sectors, agriculture, tourism, mining and property development.<\/p>\n<p>Malawi as a preferred investment location boasts of skilled and semi-skilled English speaking workforce with the good productivity levels. In addition the country has a long established free enterprise economy, political and economic stability as well as safe and secure location for business, family and property<\/p>\n<p>Competitively priced utilities such as water, electricity, telephone and postal services are readily available. Foreign exchange and international money transfers are provided through commercial banks operating in the country. Comprehensively, Malawi offers investors the following:<\/p>\n<p>\u2022 Investment protection<\/p>\n<p>\u2022 Investor safety<\/p>\n<p>\u2022 Strategic location<\/p>\n<p>\u2022 Good market access<\/p>\n<p>\u2022 Attractive investment incentives<\/p>\n<p>\u2022 Safe, secure stable and profitable business environment<\/p>\n<p>\u2022 Educated, English speaking, skilled and readily available workforce<\/p>\n<p>\u2022 Institutional support<\/p>\n<p>10 reasons to invest in Malawi<\/p>\n<p>1. Streamlined Investment Procedures: One stop centre through www.mitc.com with an average of five day processing for all investment related procedures.<\/p>\n<p>2. Political Stability and Security: With no history of civil war, Malawi is Africa\u2019s beacon of peace, a stable political climate for doing business.<\/p>\n<p>3. Liberalised economy, Political will: Market driven rates, exchange rates. Government co-investments in strategic areas to promote private sector growth.<\/p>\n<p>4. Competitive Labour Market: Large, highly educated, skilled, hard-working, honest and trainable English speaking labour.<\/p>\n<p>5. Preferential Market Access: Process in Malawi and sale through free trade areas and trade agreements covering Comesa, SADC, EU and USA markets through AGOA.<\/p>\n<p>6. Untapped wealth: Opportunities include agriculture, energy, mining, manufacturing, infrastructure, services, ICT and Tourism. Malawi has huge economic opportunities for investors.<\/p>\n<p>7. Investor Friendly Climate: A number of Investor tax incentives, Malawi is becoming a choice destination for many investors targeting Southern Africa region.<\/p>\n<p>8. Ease of Access: Malawi is located strategically for an investor targeting regional and international markets.<\/p>\n<p>9. Growing economy: The economy has grown since 2007 despite global economic challenges.<\/p>\n<p>10. Developing infrastructure: All key sectors of transport, property and ICT are developing.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Africa-Press &#8211; Malawi. General Overview Malawi is a landlocked countryin southeast Africa that was formerly known as Nyasaland. It is bordered by Zambia to the northwest, Tanzania to the northeast, and Mozambique on the east, south and west. Malawi is over 118,000 km2 (45,560 sq mi). Its capital is Lilongwe, which is also Malawi\u2019s largest [&hellip;]<\/p>\n","protected":false},"author":84,"featured_media":2554,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,6,8],"tags":[233,371,1158,1157,234],"class_list":["post-2555","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-files","category-homepage-english","tag-africa-press","tag-africa-press-malawi","tag-economic-overview","tag-headwinds","tag-malawi"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.1 (Yoast SEO v27.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Country report Malawi - Malawi<\/title>\n<meta name=\"description\" content=\"General Overview Malawi is a landlocked countryin southeast Africa that was formerly known as Nyasaland. 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