Capital markets key to Malawi’s transformative agenda

The Capital Markets Association of Malawi – CMAM has highlighted the critical role of capital markets in advancing the country’s transformative economic agenda.

CMAM president, John Robson Kamanga, emphasized this on Friday, December 6, 2024 during the association’s annual conference held in Blantyre.

Kamanga said capital market are integral for Malawi’s economic progress as they can drive sustainable financing in key sectors such as mining, agriculture, and tourism while supporting global trends like green finance and carbon trading.

“The issues we’re looking at in terms of the role of capital markets are how they fit into the transformative agenda the country is going through,” Kamanga said.

He pointed to the government’s initiative to list mining companies on the Malawi Stock Exchange (MSE) as a step forward in aligning the sector with sustainable financing practices.

“We have seen that at least the government has taken the initiative whereby some of the mining companies will be listed on the Malawi Stock Exchange. In so doing, this is going to create wealth as well as jobs.” 

Kamanga also outlined how the capital market can support agriculture through the issuance of green bonds, which he described as critical for financing resilient agricultural practices.

“The capital market is actually available through sustainable green financing, such as sustainable bonds. These bonds could finance agricultural infrastructure like the Greenbelt Initiative, including building canals and solar-powered drip irrigation systems in areas like the Lower Shire,” he said. 

Turning to tourism, Kamanga noted that sustainable finance could support the development of environmentally friendly hotels.

“The stock market would be in a position to finance sustainable projects using materials that are eco-friendly, such as cement-based bricks instead of burnt bricks, and energy sources like solar instead of traditional energy,” he explained. 

Kamanga emphasized that the capital market could also play a role in emerging opportunities in carbon trading.

“Currently, the government has put in place initiatives to benefit from carbon trading. The stock market will provide the secondary markets where value from carbon credits can be realized,” he said.

Weighing his views is the Stockbrokers Malawi Limited equity investment analyst, Kondwani Makwakwa, who emphasized the potential of the capital market, particularly in raising funds through bonds and listings.

“I would say that the capital market has got a huge potential. If we look back and see what the capital market has done, you would see that itself is a manifestation of what the capital market can do. For example, in the bond market, the capital market is able to raise huge sums of money in that area,” Makwakwa said.

Makwakwa added that the development of reporting guidelines for green projects is crucial to ensure transparency and credibility.

“We need to understand the implications of not investing in sustainable initiatives, which have a number of impacts, like climate change. If we don’t have guidelines, companies might be misled into claiming green investments when they are not,” he cautioned.

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