Malawi once again misses reselection for another compact program under the United State’s Millennium Challenge Corporation (MCC) program.
This has been confirmed through a published online statement from the MCC office in Washington following a board meeting which its directors held towards the end of last month.
The MCC had a pool of about 74 countries which are lower to middle income which it enlisted for candidacy in the 2018 financial year.
Malawi which is completing its energy pact from 2012, this year was among the candidates for reselection.
However according to a results report from the MCC Board they reselected Burkina Faso, Mongolia, Senegal, Sri Lanka, and Tunisia, enabling the development of compacts in those countries to continue.
Two new countries have been selected for the first time namely The Gambia and Timor Leste.
This means that Malawi will now have to work on campaigning to get a new compact to develop another sector other than energy.
Meanwhile, the Malawi Government and the MCC office in the country are yet to comment on the matter.
The Millennium Challenge Corporation is a bilateral United States foreign aid agency established by the U.S. Congress in 2004, applying a new philosophy toward foreign aid.
It is an independent agency separate from the State Department and USAID
The Malawi Revenue Authority (MRA) has missed its half year target by MK41 Billion in the 2017/2018 Financial Year.
According to the board chairman of the MRA Eric Chapola, MRA was mandated to collect MK451.87 billion towards the national budget in the first six months of the financial year.
Chapola has described the first half as challenging, disclosing that they have only managed to collect MK410.87 billion, which represents 91 percent.
With a national budget currently running mainly on local resources without direct international support, the tax authority has been tasked with making a significant contribution to funding the financial blue print.
With the 2017/2018 National budget expected to go under scrutiny next month, various stakeholders already have their eyes set on the its performance and contributing factors.
The financial blue print has been growing big year after year, putting pressure on the government to pull its socks on domestic resource mobilisation.
The 2017/2018 National Budget currently stands at MK1.3 trillion.
Collections of the tax authority have been very crucial in the budget review process as they also indicate the country’s ability to fund its own expenditure.
Other than the taxes, the government has done of lot of its financing through heavy borrowing using instruments such as treasury bills and other forms of foreign loans.
As much as the MRA may have been MK41 billion shy of meeting the first half target, they are not entirely poor.
Compared to what they collected during the same period in the previous financial year, this is considered much better.
During the first half of the 2016/2017 financial year the authority collected MK377.44 billion which is MK33.42 billion less than the current collection.
Responding to a questionnaire on the authority’s performance, Chapola points out that the lack of direct budgetary support has pushed the MRA to ensure that no stone is left unturned in tax collection.
Despite revealing that the tax collecting body has had a tough year, Chapola is not specifying the challenges that have led to the under collection.
Speaking to Capital FM late last year, Secretary to the Treasury Ben Botolo hinted that this may happen.
The board of the MRA is however optimistic that come the end of the financial year, they will be able to meet the annual target.
Meanwhile, the MRA is working on sealing all the holes where other taxable income has been slipping through their fingers.
Trade on the local Stock Market is expected to become easier and less time consuming as the Malawi Stock Exchange (MSE) is automating its system next year.
Traditionally, trade at the market is done physically, with MSE managers and Stock Brokers’ engagement.
In most cases, stock brokers have to travel to the MSE offices where the daily trade is done to see if shareholders of listed companies are offering any of their stock for trade.
Speaking to Capital FM, Chief Operations Manager of the MSE, Esnat Chilije disclosed that they want to make the process of trading on the bourse more effective and efficient.
Chilije adds that the automation is likely to improve liquidity on the exchange.
The Operations Manager added that the MSE is currently devising ways to entice more people to buy shares form companies listed on the local stock market as it can help them attain financial stability.
“Every person has the capacity to buy shares from MSE despite living id different financial levels,” Chilije said.
There are over ten companies listed on the local bourse, these include First Merchant Bank, Telekom Networks Malawi, Standard Bank and Illovo Sugar Company.
The Malawi Stock Exchange has been in existence since 1994 but started equity trading in November 1996 when it first listed National Insurance Company Limited (NICO).
Prior to the listing of the first company, the major activities that were being undertaken were the provision of a facility for secondary market trading in Government of Malawi securities namely; Treasury Notes and Local Registered Stock.
Mobile phone network and ICT service provider-TNM is looking forward to closing the year on a high note with an anticipated high margin profit growth.
In their trading statement notice for the last half of the year 2017, the telecommunications Company Secretary Christina Mwansa discloses that they expect a 60 percent profit increase.
The statement, which is in fulfilment of Malawi Stock Exchange listing requirements, comes after the company also post an impressive profit in the first half of the year.
As at the end of June 2017, TNM registered a half year profit of 4.7 Billion Kwacha, which was over twice their annual returns for 2016 where they made 8.2 Billion Kwacha, putting them amongst the companies that performed well this year.
Mwansa however stresses that the expected 60 percent profit after tax growth financial statement, have not yet been audited.
A consolidated financial statement for the firm is expected to be made public by March next year following the board’s approval.
Imports into the country are said to have gone down evidenced by low import tax recorded by the Malawi Revenue Authority (MRA).
Imports have for a long time been the country’s major trade problem affecting the economy.
Malawi continues to have a wide trade deficit with exports remaining lower than what enters the country’s borders.
Speaking to Capital FM Tax Authorities say during this time of the year imports tend to shift towards agriculture hence minimising the overall import goods.
This has seen import tax, especially VAT going down.
The same has been seen in Import Duty which has also missed its MK7.6 Billion target, as only MK6.9 Billion has been realised due to a drop in dutiable goods.
But Director of Corporate Affairs for the MRA Steve Kapoloma tells Capital FM that they are optimistic of meeting the expected targets as the financial year progresses.
Meanwhile, the Malawi Confederation of Chambers of Commerce and Industry has requested for a revision of some important Acts governing export of goods.
These include control of goods Act and Special crop Act.
The decision has been arrived at following complaints that the ban on Maize export was lifted too late when farmers had already fetched low prices for the grain.
According to Karl Chokhotho, President for the MCCCI, revision of the Acts will go a long way in ensuring that farmers are selling their commodities at a fair price.
The top exports of Malawi are Raw Tobacco ($702M), Dried Legumes ($111M), Raw Sugar ($85.4M),Tea ($73M) and Raw Cotton ($25.6M).
The top export destinations of Malawi are Belgium-Luxembourg ($159M), Germany ($147M), India ($101M), South Africa ($75.2M) and the United States ($72.3M).
The top import origins are South Africa ($449M), China ($309M), India($238M), the United Arab Emirates ($236M) and Zambia ($119M).