Affordable Prices To Domestic Tourists Can Boost Malawi Tourism Sector

Billy Banda (Shot By EYE LEVEL ART_Francesco Jnr)

Malawi tourism sector players tipped to work out ways of attracting domestic tourism for the sector to register growth.

The Malawi tourism sector recently held Annual General Meeting where sector players noted that the sector is registering small number of local tourist’s as compared to international tourists. 

As the sector is thinking deep on ways to make the tourism sector more attractive to local tourists, one of the country's human rights activist, Billy Banda also Chairperson for Malawi Gaming Board and National Lotteries Board says introduction of ‘special affordable rates’ for the local visitors is a solution.

While sharing similar concern with the tourism sector players, however, Banda observed that the low number of visits to Hotels, resorts and tourists attraction places by locals is because charges are much higher as compared to the income levels of many Malawians who cannot afford to pay for services offered by hotels, holiday resorts and other service providers in the tourism sector.

“What the tourism is looking for and to make it more significant and more important we need to start with our selves.” He said “However one of the key challenge contributing to the lack of commitment by citizenry is because there is no policy that guarantee that a local citizen must be charged a low amount that someone can afford to bring a family to such kind of places.”

He suggested that Malawi Tourism Council need to come up with a policy that inspires local citizenry to participate and support the tourism industry and that one of the key component be that tour operators, travel agencies and other agencies should work out packages which Malawians could conveniently afford.

He emphasized that tourism sector is a key sector for Malawi economy and backbone of the international tourism. 

Billy Banda (Shot By EYE LEVEL ART_Francesco Jnr)

“We cannot say tourism is a failed industry, tourism is another big potential for the economy and if ordinary citizens were committed to support the industry and are given fair charges that can also be a better way. Once that is put in place Malawians will go out strongly and support the tourism sector.” Said Banda but stressed that efforts needs to be made to provide domestic visitors economy accommodation, meals and many other services

But Banda also asked Government to support tourism industry with incentives and reducing interest rates in commercial banks. On this, Banda noted that although access to loans is a challenge in the sector, cost of borrowing in most banks are much higher with short period of time to repay.

“Government is also a bigger player” he noted then urged it to look at the local operators needs and challenges saying “They must be given some incentives, even financing mechanisms they have to be given infrastructure banks, loans that are more manageable, loans that are not crippling the hotel sector.”

Issues Making Malawi Tourism Sector Too Expensive For Domestic Tourists 

The Malawi tourism sector is facing number of challenges that includes visa issues, lack of skilled workers even lack of tourism statistics which is affecting potential investors to advance with tourism business in the country.

However, key challenges making the prices for services beyond reach of the domestic traveler are particularly issues on lack of sector specific incentives for investors and lack of access to finance and cost of borrowing.

Florentine Kabefu

Florentine Kabefu, Chairperson for Malawi Tourism Council, says cost of operating businesses in Malawi is very expensive in tourism. 

Kabefu mentioned a lot of duties and taxes, and said “so that is a big challenge.”  

She pointed out that in order for them in the sector to make Malawi a place of excellent domestic tourism and where Malawians can go and have access to tourists products “we need to work on some of the costs that our tourism operators are facing in order for them to make them cheaper.”

During the recent Malawi Tourism Council Annual General Meeting, minister of Industry, Trade and Tourism, Joseph Mwanamvekha highlighted key steps that Government is undertaking to improve the tourism business environment to make it more competitive and attractive.

Mwanamvekha said his ministry together with the ministry of Finance and Economic Planning are working out on issues of incentives. 

“As such proposals for incentives for the tourism sector shall become part and parcel of a comprehensive tax review which government will undertake soon as part of the ongoing Public Sector Reforms,” assured Mwanamvekha adding that Government is also developing a Tourism Investment Master Plan to guide the development of the sector and it will included mapping and zoning of potential sites across the country and that the plan shall also include development of specific incentives to encourage participation in development on the identified sites

On access to finance, the Minister further promised that Government is undertaking a study on the availability of setting up a Development Bank but at the moment the only opportunities for SMEs are only MARDEF and the Export Development Fund.

“As for cost of borrowing is concerned, it is my belief that as the economic fundamentals or our economy stabilizes, interest rates shall also become more favourable.” Said Mwanamvekha who also hinted that he has asked tourism department to finalise the Tourism Policy before the end of 2nd quarter of the coming financial year

Intra-Africa Trade Can Boost Africa’s Economy-DHL

Hennie Heymans

African countries need to focus on Intra-Trade and rid some of the barriers affecting cross border trade for the continent to realize substantial economic growth, says one of the leading global brand in the logistics industry, DHL. 

Cashgate Case: Lawyer Refuse Comment On Katengeza 5yr Sentence As State Express Excitement

Katengeza

Lawyer for Angela Katengeza, Gilbert Khonyongwa, says he needs more time to go through the ruling made on Tuesday before making his comment to press.

Katengeza who was answering to Money laundering of K105 million in 2013 was sentenced to 5 years imprisonment by Lilongwe High Court justice Fiona Mwale.

Asked to comment on the verdict, Khonyongwa said he need ample time to look at the judgment and after he will make his position.

Khonyongwa

“As of now I could not comment much until I go through it at my own time and then determine my position on that.” He said adding that his client will decide on whether to appeal the ruling or not but that will be after they go through the ruling

Several mitigation factors that defense submitted to court were refused. Reacting to this Khonyongwa conceded that the court has authority to consider or to disregard the mitigation factors.

“In terms of the law the court has the final discretion how it handles the sentence. So, from its analysis it has decided to ignore some of the mitigation factors. So that is the position of the court” he conceded

Saidi

Meanwhile, the state has welcomed the court verdict of 5 year prison sentence to Angela Katengeza 

Imran Saidi a state advocate described the verdict by Justice Fiona Mwale as an indication that justice is still taking its course in the country.

“Beyond what the Court has found we wouldn’t have any comment but I think that is a reflection of justice that it is still taking its course in our land.” He said

Judge indicated that Katengeza was supposed to serve a total of six years inprisonment but because of old age and health problems of the convict, one year has been deducted to make the sentence be at 5 years. 

Commenting on this reduction Saidi said “As I said, it is the Court discretion that when it is sentencing there are a lot of circumstances and matters that it puts into considerate on. It is our view and belief that at least what the court found by deduction one year, it is still in order.”

On the ongoing and future cashgate cases he said “This is a positive development. As a state we have always relied upon court duty and the way courts conduct its activities. It is a reflection to the effect that at least the justice is still prevailing and we believe that will still send a signal to the rest of the other offenders probably it is high time that they can make decision of coming forward to plead guilty and probably surrender whatever they acquired from our state coffers.”

Cashgate Case: Katengeza Gets 5 Year Jail Sentence, Tells Judge 'Just Kill Me'

Relatives shielding her from Journalists 

Angela Katengeza les but all that ended when Justice Fiona Mwale punished her with 5 year jail sentence.

In protest of the judges’ custodial sentence immediately after hearing the judgment, Katengeza reacted by shouting "Just kill me, just kill me” and continued “God of Joseph, God of Isaac, what have I done!" and began to cry uncontrollably.

Arrival at the court where she was allowing
Journalists to take her pictures 

On 14th March 2016, Katengeza was convicted and found guilty of Money Laundering contrary to Section 35 (1)(c) of Money Laundering, Proceeds of Serious Crime and Terrorism Financing Act. She was originally charged alongside with her son Gordon Hamdani who was acquitted after the state discontinued case against him and Leonard Kalonga who was discharged after he separately pleaded guilty to various offensesrom the case, after state had paraded four witnesses.

Katengeza was answering to money laundering of K105 million a crime that was committed in 2013 when she had lend out her Faith Construction company certificate to another cashgate convict Leonard Kalonga former Deputy Director for then, Ministry of Tourism.

According to Katengeza, that time Kalonga wanted to use her company certificate with bank accounts to bid construction tenders that were available at the Ministry but could not use his own certificates because of employment policies.   

After giving the certificate to Kalonga, her bank account began to receive payments from Government which accumulated to a total of K105 million and Katengeza admitted that she in separate occasions began to withdraw the money and hand delivered to Kalonga. 

In all these dealings, however, Katengeza disclosed that she only received K3 million covering renewal fee of her company certificate and costs of transport and airtime during the process of withdrawing and handing over the money to Kalonga. 

She was promised 10 percent commission at the end of the deal but that did not happen because the cashgate scandal investigations began much earlier before the deal was over.

Katengenza has throughout the trial maintained no guilty plea citing that Kalonga used her to defraud Government and that she was not part of the Government officers who masterminded the cashgate.

Family members crying outside court

 

Money Laundering attracts maximum sentence of 10 years imprisonment and fine of K2 million.

Announcing the verdict, Justice Fiona Mwale indicated that six years of imprisonment matches actual level of her benefit and margin of her mitigating factor in the commission of the offense.

But said; “I do however recognize her age and her heart condition and I deduct one year from that sentence.” then continued “The convict is therefore to serve 5 years imprisonment in the offense of money laundering” 

Immediately, Katengeza shouted; “Just kill me, I don’t have to bear such hard life again”, as she continued to shout the judge also continued to deliver the judgment of which is allowing the convict the right to lodge an appeal.

Family members also joined in with cries followed by loud murmuring in the public gallery side showing their disapproval of such a lengthy sentence. The murmuring were so loud in the courtroom making the end part of the judgment that the Justice Mwale was still presenting to be inaudible.

Earlier, the judge said suspended sentence was not suitable in this particular case considering various reasons she highlighted in her verdict that includes the negative economic impact cashgate brought to the country.

Justice Mwale in her verdict refused to take into consideration some of mitigating factors that were presented by defense during sentencing submissions. Among the factors include; cooperation, good character, length of the trial which has taken three years, on remorse since she refused to admit her responsibility of theft by maintaining no guilty plea, failure to make restitution and on the K3 million amount that she benefited out of K105 million.

But on K3 million benefits, the judge argued that although Katengeza got K3 million from K105 million she benefited from the proceeds and that she never made restitution. Justice Mwale futher mentioned that still the convicts actions of lending out her company certificate to Leonard Kalonga helped to facilitate the laundering of Government money that “could have been utilized at material time towards realization of the national budget.”

“What is relevant at this time is that she facilitated the theft of K105 million… I find that as a serious crime.” insisted the Judge adding “K3 million is still substantial amount of money” 

“The sum laundered is however, one that is quite high, as I alluded earlier and I keep reiterating that K105 million nine hundred and eighty three thousand is quite high.” She said and further counter argued defense position by saying “In money laundering charges, it is the sum that has been laundered” matters most

The judge also noted with concern failure by state to highlight impact of cashgate during their sentencing submissions.

Outside the court, Katengeza was crying and continued to shout "I don't deserve this life anymore!" 

Katengeza arrival 

Now 55 year old Katengeza was a theological college student and Area 47 block leader when the theft was happening and was consecrated as Eleventh Hour church pastor in 2014 upon completion of her first degree in theology. 

Defense submitted that Katengeza who is a first offender and a person of good character was a very active person in church ministry and her arrest came when she was about to open a church branch in Mtsiriza.

Her Faith Construction operated for a period of 5 years and it was common among construction companies to borrow from each others company certificate.

Water Should Be A 'Right' In Malawi -CSR, Tearfund

Making water a ‘right’ will make Malawi achieve the goal of allowing citizens enjoy full access to clean and safe water says Centre for Social Research (CSR) and Tearfund.

The two institutions through the Climate Justice project funded by Scottish Government are highlighting challenges that the country continues to face in the water sector due to absence of legislation that can form basis for stakeholders in the sector to hold Government accountable on provision of water to every corner of the country.

“In the two projects that we are working on it’s very clear that the water sector is not doing very well.” observes CSR Deputy Director, Prof. Blessings Chinsinga

“One of the reasons that we found is that water is not designated as a right, as a result the stakeholders that are active in this sector do not have a firm basis to hold the Government accountable.” He said

Painting the picture of the water situation in the country, Chinsinga indicated that on paper, Malawi's water coverage is 84 percent but on the ground, water access is far much lower estimated to be between 50 to 60 percent. He said this is the case because most existing water facilities like boreholes that were drilled in the villages are not functional.

“At any given time we have only about 30 to 50 percent of these water facilities functioning.” noted Chinsinga adding that this is clear indication that there is a big problem in the water sector

He narrated that in some areas people particularly women are forced to walk more than two kilometers to fetch clean water from boreholes while some gets water from unprotected sources mostly from rivers and wells.

He then challenged that the problem of access to water will remain, unless, water is recognized as a right.

“Therefore we feel that if water was to be legislated as a right then maybe, Government would in a special way be forced to make sure that performance in the water sector is improved through adequate funding.” He emphasized

The CSR and Tearfund have embarked on policy dialogue on the basis of projects they are implementing within the framework of Climate Justice with purpose of engaging with and stimulate debate among key stakeholders on water as a ‘right.’

Recently, the two institutions had a policy dialogue with Members of Parliament (MPs) with ultimate goal of creating a critical mass of MPs so as to forge a long term partnership with CSR and Tearfund to popularize the Climate Justice perspective to dealing with issues of quality water access and climate change issues in Malawi. 

During the engagement, Prof. Chinsinga urged legislators to consider enforcing the existing pieces of policies and legislation on water including the policy commitment by Government that it will provide water within 500 meter radius.

2016-2017 Budget: This is IMF Budget - MCP

Goodall Gondwe: Finance Minister 

The K1.136 Trillion Budget presented on Friday for the 2016/17 fiscal year has been described as “IMF budget” and “unrealistic” for how Malawi has projected to raise its domestic resources.

Total revenue and grants are estimated at K965.2 billion where 80.3% of this will be domestically generated while 19.7 percent will represent donor grants.

Malawi Congress Party spokesperson on finance in National Assembly, Alexander Kusamba Dzonzi reacted that Malawians will suffer much through tax revenues as the budget intends to raise 80.3% using domestic resources while as Peoples Party (PP) spokesperson on finance, Ralph Jooma described this years budget as Unrealistic and feared that the budget will be marred with excessive borrowing.

Dzonzi said this will result into real hardships among Malawians and predicted possible high interest rates in commercial banks that will scare entrepreneurs from borrowing there by reducing their production and affect the economy. 

2016-2017 Budget: Estimates At K1.136 Trillion

Minister of Finance and Economic Planning has told National Assembly that this 2016-2017 Financial Year Government will spent a total amount of K1, 136.4 billion (One Trillion, One Hundred and Thirty Six Billion point Four)

This total expenditure and net lending during this year represents 26.1 percent of nominal GDP.

It also represents an increase of 23.9 percent over the 2015-2016 revised expenditure of K902.3 billion.

Among others this budget will allocate K198.5 Billion to the Ministry of Agriculture, which is the highest allocation of resources for this year, and K147.6 Billion for Ministry of Education and K9.8 Billion for the Ministry of Health.

This large allocation to Agriculture comes at a time when the Government has resolved to intensify irrigation farming in order to transform the economy from the excessive dependence on rain-fed agriculture, as a lasting solution to the challenge of climate change.

"The move will also increase the number of harvests per year to more than the current single harvest. This could substantially increase the country’s rate of economic growth." indicated Gondwe

He mentioned that the large scale farming will be intensified through Green Belt Initiative and that Government has decided to formally establish the Greenbelt Authority (GBA) as a stand-alone public agency.

"The authority will be the official agent for the construction of these largescale irrigation infrastructural projects throughout the country in line with the Government’s Irrigation Masterplan, while small-scale irrigation projects will continue to be implemented by the Ministry of Agriculture, Irrigation and Water Development." He said

"Accordingly, the Treasury has established Vote 078 to allocate resources for the administrative and operational expenses of the authority with immediate effect. This will be part of the 2016/17 budget. The large-scale irrigation infrastructure projects will be part of the Government’s development programme." He assured

Of the projected K1.136 trillion, recurrent expenditure will be MK815.5 billion or 18.7 percent of GDP, which is higher than the 2015/16 allocation by 16.8 percent.

According to Gondwe, the Development expenditure will increase by 57.0 percent from MK217.5 billion to MK317.4 billion, or 7.3 percent of GDP.

"Up to K279.8 billion or 82.2 percent of the development budget will be provided by development partners through loans and grants, while local resources will account for the balance of K37.6 billion or 11.8 percent. Therefore, the donor contribution to the development programme is anticipated to increase by 62.0 percent relative to 2015/16." He said

The total revenue and grants during the 2016/17 fiscal year are estimated at K965.2 billion or 22.2 percent of nominal GDP.

Of this amount, some K708.8billion will be tax revenue, K66.0 billion will be non-tax revenue, while K190.4billion will be grants from Malawi's cooperating partners.

"Thus, MK774.8 billion or 80.3 percent of these resources will be domestically generated, while the remaining 19.7 percent will represent donor grants. " he said the Finance Minister

He went on "Compared with the 2015/16 revised budget, tax revenues are projected to increase by 21.8 percent, reflecting the fact that nominal GDP, which is the base for most of the taxes, will grow by 24.0 percent. Tax on income and profits will account for 55.4 percent of total tax revenue, while tax on goods and services will generate 37.2 percent." He said but noted that non-tax revenue is shown to be lower relative to the 2015/16 revised budget estimate of K71.9 billion.

Gondwe mentioned that three key factors and priorities were taken into account when preparing the 2016-2017 budget.

He named the key considerations as putting reflection of agreement between Government and IMF within the context of seventh and eighth reviews of Extended Credit Facility arrangement; assumptions that macroeconomic outlook for the next financial year, where the real GDP growth is projected at 5.1 percent while nominal GDP will grow by 24.0 percent and that the average inflation rate in 2016/17 is projected reach 17.4

The other key consideration was that based on the Government’s short and medium-term policy priorities which are motivated by the objective of ensuring that the country maintains a program with the IMF, while addressing some pressing socio-economic challenges.

On maintaining IMF programme and addressing socio-economic problems, Gondwe therefore indicated that the budget seeks to increase domestic resource mobilization; make available adequate resources for maize procurement, and to support irrigation farming; to ensure that the wage bill is maintained below 7 percent of nominal GDP; and to ensure that resource allocations to the health, education and other critical social sectors remain adequate and a significant proportion of the budget.