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Country Commercial Guides for FY 2000: Malawi Report prepared by U.S. Embassy Lilongwe, released July 1999    Note*

CHAPTER I. Executive Summary

1. This Country Commercial Guide (CCG) presents a comprehensive look at Malawi's commercial environment, using economic, political and market analysis. The CCG's were established by recommendation of the Trade Promotion Coordinating Committee (TPCC), a multi-agency task force, to consolidate various reporting documents prepared for the U.S. business community. Country Commercial Guides are prepared annually at U.S. Embassies through the combined efforts of several U.S. Government agencies.

2. Geographically small (48,000 square miles) and landlocked in central Africa, Malawi is one of the poorest nations on earth. With 9.8 million inhabitants and a population growth rate estimated at approximately 2%, Malawi is one of the most densely populated countries on the African continent. Annual per capita GDP is about USD 200.

3. Agriculture forms the mainstay of Malawi's economy, accounting for nearly half of its GNP. Tobacco, tea, and sugar together generate over 80% of export earnings, with tobacco providing the lion's share (over 60%). The agricultural sector employs nearly half of those in formal employment, and directly or indirectly supports an estimated 85% of the population. Malawi has a narrow economic base with little industry and mining, and no known economically viable deposits of gemstones, precious metals, or oil. High transport costs, which comprise over 30% of its total import bill, are a serious impediment to economic development and trade.

4. Malawi has a relatively free investment environment. However, poor infrastructure (roads, telecommunications, electricity, and water) and bureaucratic hurdles deter investors. A high degree of Government ownership/control also discourages private investment. The Government, however, continues to move forward with its multi-sectoral privatization program. Recent Government initiatives targeting improvements in the road infrastructure, together with introduction of private sector participation in the railroad and telecommunication sectors, have begun to render Malawi's investment climate more attractive. In November 1998 the Malawi Government issued a revised "Policy Statement And New Guidelines For The Issuance And Renewal Of [Expatriate] Employment Permits" (one document) that underscored its desire to make such permits readily available to expatriates. The 1998 Guidelines mandated that processing times for temporary employment permit (TEP) applications shall not exceed 40 working days. Malawi has a fairly independent, albeit overburdened, judiciary which derives its procedures from English Common Law. 5. South Africa is Malawi's primary supplier of imported goods. This longstanding commercial relationship, comparatively higher product and transport costs, and a lack of historical business ties between the United States and Malawi disadvantage U.S. suppliers. There are a handful of U.S. companies doing business in Malawi, including the three principal processors and exporters of tobacco. U.S. products in significant demand include computers, used clothing, telecommunications equipment, and used vehicles.

6. Malawi is an active member of The Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA). It belongs to the International Center for the Settlement of Investment Disputes (ICSID). Malawi has had an OPIC investment guarantee agreement since 1967. In April 1999 the U.S. Export-Import Bank (Ex-Im Bank) announced its decision to make available short-term export-finance insurance to Malawi under a new Africa Pilot Program. Malawi remains off-cover for most other Ex-Im Bank Programs.

7. Country Commercial Guides are available for U.S. exporters from the National Trade Data Bank's CD-ROM or via the Internet. Please contact stat-usa at 1-800-stat-usa for more information. Country Commercial Guides can be accessed via the World Wide Web at http://www.stat-usa.gov; http://1997-2001.state.gov/; and http://www.mac.doc.gov. They can also be ordered in hard copy or on diskette from the National Technical Information Service (NTIS) at 1-800-553-NTIS. U.S., exporters seeking general export information/assistance and country-specific commercial information should contact The U.S. Department Of Commerce, Trade Information Center by phone at 1-800-USA-trade (1-800-872-8723) or by fax at (202) 482 4473.