Tag: Malawi

  • Malawi Approves Tobacco Law

    Malawi Approves Tobacco Law

    Photo: Taco Tuinstra

    Lawmakers in Malawi approved the Tobacco Industry Bill, which stipulates how stakeholders are supposed to operate, reports the Nyasa Times.

    In addition to provisions on child labor and tenancy, the legislation includes clauses on traceability and the use of agrochemicals. Lawmakers hope the new rules will improve compliance and make it easier for Malawi to market its leaf around the world.

    The Tobacco Industry Bill will also regulate contract and noncontract farming, tobacco production and delivery quota, and prices, along with disposal of tobacco stalks.

  • Malawi Now a Full Party to FCTC

    Malawi Now a Full Party to FCTC

    Photo: Taco Tuinstra

    Malawi is now a full party to the World Health Organization’s Framework Convention on Tobacco Control (FCTC). The government ratified the FCTC in August 2023, and the treaty took effect Nov. 16.

    “WHO congratulates Malawi for this historic step and reaffirms its strong commitment to collaborating closely with the government to achieve the shared goals of the WHO FCTC,” said Neema Rusibamayila Kimambo, WHO representative in Malawi, in a statement. “Together, we will continue our collective efforts to protect public health and work towards a tobacco-free future.”

    The WHO said it is ready to provide extensive support to ensure Malawi’s successful implementation of the convention and welcomes the nomination of a government liaison to work closely with the FCTC Secretariat.

    The FCTC, which entered into force in February 2005, provides an internationally coordinated response to combating the health impact of tobacco, setting out specific steps for governments addressing tobacco use and production.

    The treaty also promotes crop replacement and diversification.

    Malawi is one of the world’s tobacco-dependent economies. Depending on the season, tobacco accounts for between 40 and 70 percent of the country’s export earnings.

    In a special report earlier this year, Tobacco Reporter examined industry efforts to help Malawi strengthen its economy by developing supplemental value chains, such as groundnuts, bananas and mushrooms.

  • Malawi Devalues

    Malawi Devalues

    Photo: Africa

    Malawi is devaluing the kwacha’s by one third.

    In a notice to authorized dealer banks seen by Reuters, the country’s central bank said the kwacha’s exchange rate to the U.S. dollar would be adjusted to MKW1,700 from MKW1,180.

    The southern African country has been struggling with dwindling foreign currency reserves due in part to declining revenue from tobacco exports.

    Malawi earned $282.62 million from tobacco sales during the 2023 marketing season. While this figure was up substantially from the $182.12 million generated by sales of the golden leaf in the previous season, it is not nearly enough to alleviate the nation’s trade imbalance.

    In 2020, Malawi’s import bill was $2.8 billion, versus exports of only $800 million, according to the National Statistics Office.

    Depending on the season, tobacco accounts for between 40 percent and 70 percent of Malawi’s export earnings. To reduce its heavy reliance on a single commodity, the country has been working to diversify its economy by developing supplemental value chains, such as mushrooms, bananas and groundnuts.

  • Alliance One Malawi Spends Millions on CSR

    Alliance One Malawi Spends Millions on CSR

    Photo: Taco Tuinstra

    Alliance One Malawi has spent roughly MKW442 million ($384,721) on its corporate social responsibility programs over the last two years, according to The Nyasa Times.

    The company renovated and constructed new classrooms for more than 22 primary schools over the last two years, according to Fran Malila, corporate affairs manager.

    “As a corporate responsibility entity, Alliance One thought it wise to renovate as well as construct new classroom blocks in these 22 primary schools so that pupils who are future leaders of this country should learn in [a] better environment,” said Malila. “In the process, we are also fighting child labor as our aim is to see every kid to go to school and not be used as a source of labor in tobacco fields.”

    The renovated schools have led to higher student enrollment and retention rates.

    According to Malila, the company also constructed a postnatal ward and donated various medical equipment to Mzuzu Central Hospital’s pediatric ward.

  • Malawi Extends Tobacco Farmer Registration

    Malawi Extends Tobacco Farmer Registration

    Image: Tobacco Commission

    Malawi’s Tobacco Commission has extended tobacco farmer registration and licensing to Oct. 31, 2023, according to The Nyasa Times. The end date was originally scheduled for Sept. 30, 2023.

    “We have decided to extend the exercise by one month, giving enough period to them [stakeholders and growers] without charging any fee or penalty to them,” said Tobacco Commission CEO Joseph Chidanti Malunga.

    The Tobacco Commission wants farmers to produce as much tobacco crop as possible because there is more demand for higher volumes from traditional and international buyers.

    It is illegal in Malawi for farmers to grow tobacco without being licensed.

  • Malawi Tobacco Control Audit Exposes Overages

    Malawi Tobacco Control Audit Exposes Overages

    The Tobacco Commission’s headquarters in Lilonge | Photo: Taco Tuinstra

    A board of commissioners-ordered internal investigative audit of the Malawi Tobacco Commission exposed “extravagant over-expenditure and other stupendous financial irregularities” of the 2022–2023 fiscal year budget, according to the Nyasa Times.

    Internal Audit Manager Rhoda Zaniku noted in her summary that the commission overspent by MWK22 million ($20,339.04) for the enforcement, liaison, monitoring and evaluation budget, indicating a 357 percent negative variance. The commission’s majority of votes were overutilized by more than the planned activity budgets.

    Billboards worth MWK25 million were not budgeted for the 2022–2023 fiscal year. They represented 89 percent of the actual cost of enforcement, liaison, monitoring and evaluation charges. The billboard supplier, Optima Group, requested an 80 percent advanced payment—the commission granted 70 percent “contrary to the Secretary of Treasury instructions, which banned suppliers demanding payments before delivering goods or services.”

    Travel and media budgets were also overspent as well as the budget for tobacco consultative meetings and the budget for motor vehicle running maintenance. The internet and VPN budget was overused as well. The audit also showed that the commission had no policy or guidelines on how to use afforestation levy money—only using MWK4.4 million of MWK8 million to procure tree seedlings, with the rest used on materials and expenditure for the National Tree Planting Day event.

    “The audit exercise noted that there was no evaluation process when procuring some goods and service [and] that the IPDC [Internal Procurement and Disposal Committee] used the fixed team to evaluate process of procuring of goods and services,” the audit report said.

    Of the commission’s budget votes, 40 of the 72 were spent in excess in violation of treasury regulations and the Public Finance Management Act.

    Zaniku stated that the Tobacco Commission’s management “must abide to the approved budget for their planned activities or seek approval from the relevant authorities stipulated in the Public Finance Management Act and other statutory guidelines.”

  • Malawi Commits to ‘Decent Work’

    Malawi Commits to ‘Decent Work’

    Image: Tobacco Reporter archive

    Malawi’s government has committed to ensuring that there is “decent work” for tobacco sector employees, according to Malawi24.com.

    Hlalerwayo Kelvin Nyangulu, labor commissioner, made the statements during a workshop on strengthening knowledge of labor laws, issues and compliance. “In 2021, the employment act was amended, and we actually abolished tenants labor in Malawi,” Nyangulu said. “So, (the) government is really committed to ensure that we have decent work in the tobacco sector.

    “What is important now is that a decision has been made, a law has been enacted, so what is happening is that as I speak, tenants labor is abolished in Malawi. As you may know, tenants labor was providing fertile ground for child labor; it was also providing fertile ground for forced labor; now that it is abolished, that’s why we are talking about developing standard contracts that will define the relationship between employer and the worker in the tobacco sector,” said Nyangulu.

    Currently, the push is for tobacco workers to be paid monthly wages, according to Nyangulu. “You see, tobacco is produced by smallholder farmers and large estate owners. We have seen that some farmers are complaining that they cannot afford to pay the monthly wages, but since we have the law, we just need to find ways how these farmers can be empowered so that they comply with the law.”

    “What has prompted us to do this is that as ECAM [Employers Consultative Association of Malawi] under ILO, we carried out a training needs assessment, and one of the things that was highlighted there was that many companies or personnel companies are not aware of international labor standards,” said George Khaki, executive director of ECAM. “Actually, it was 62 percent of them who indicated that they were not aware of international labor standards.”

    “So we thought this was a good platform for us to bring the knowledge on international labor standards today, but we are also trying to promote the use of standard contracts; we know that tenants labor was abolished in 2021 in the employment act, which means there will be normal employment relationship for players in the tobacco (sector), and to facilitate that, we are developing a standard contract that can be adopted and be used by the majority of players that do not have capability to develop contrasts,” said Khaki.

  • USAID and Pyxus Partner in Malawi

    USAID and Pyxus Partner in Malawi

    Photo: PAM

    The U.S. Agency for International Development (USAID) will award Pyxus Agriculture Malawi (PAM) $14.6 million over the next five years, Pyxus announced on its website. The money will support the company in maximizing its operational effectiveness and minimizing its exposure to financial risk as it continues to drive sustainable agriculture developments in Malawi.

    The USAID award compliments PAM’s investment to date and offsets certain company expenditures going forward as both entities work to increase the availability of high-quality, climate-smart groundnut seed varieties, boost groundnut production and processing, support improved farmer livelihood and counteract the nation’s high rate of deforestation.

    “Our company has a 30-year history of operating in Malawi and has one of the largest networks of smallholder farmers—most operating on two hectares of land or less—in the country. We have worked diligently to help our contracted farmers successfully grow and market high-quality, sustainable crops, thus improving the livelihood of the farmer, their families, their communities and the country as a whole,” said Pyxus President and CEO Pieter Sikkel, during the partnership signing ceremony at PAM’s state-of-the-art groundnut processing facility in Lilongwe, Malawi.

    “Pyxus is honored to receive this $14.6 million award from USAID, which helps our company to further build capacity, expand impact throughout the legume and forestry value chains, and unlock value for Malawi and its farmers,” added Sikkel.

    Pyxus is honored to receive this $14.6 million award from USAID, which helps our company to further build capacity, expand impact throughout the legume and forestry value chains, and unlock value for Malawi and its farmers.

    Pieter Sikkel, president and CEO, Pyxus

    The agreement aligns with Pyxus’ global environmental, social and governance goals and identifies five focus areas to achieve success: improve Malawi’s legume seed production system through the acceleration of PAM’s current research, breeding and distribution of new high-yielding, climate-resilient, market-demanded and more nutritious legume seed varieties; increase farmer access to high-quality crop inputs and hands-on training of good agricultural practices while simultaneously working to diversify PAM’s contracted farmer base—these efforts enable farmers to increase yields, sales and incomes, driving the development of the country’s commercial agriculture sector; help address smallholder farmer financing roadblocks, which currently put a significant limitation on crop production and overall market success, through fair and affordable crop input financing—minimizing financial roadblocks can help farmers increase yields and improve their overall livelihood; enhance the quality and value of Malawi groundnuts through increased processing capacity of PAM’s groundnut facility, driving job growth, the country’s export opportunities and value addition, resulting in a more impactful private sector contribution to Malawi’s economic growth; and combat deforestation and forest and soil degradation by further developing PAM’s sustainable forestry operation and the introduction of new, innovative energy solutions and soil health amendments to the farmer.

    PAM Managing Director Ronald Ngwira (right) with employees at the company’s groundnut facility in Lilongwe (Photo: Taco Tuinstra)

    “The partnership we’ve launched today, with USAID and Pyxus, will invest in Malawians to accelerate opportunities for more sustainable, inclusive and resilient economic growth,” said USAID Deputy Administrator Isobel Coleman during the signing ceremony.

    Coleman added that the partnership contributes to soil health improvements, utilization of clean energy generated from recycled agricultural waste and increasing availability of nutritious food for the Malawian people. 

    The PAM operation was founded in 2019 under Pyxus’ Value-Added Agricultural Products division. Since its inception, PAM has opened one of the largest groundnut processing facilities in Africa, gained government approval to commercialize five new legume seed varieties, cultivated and maintained more than 7,000 hectares of forestry, and unlocked additional income potential for over 20,000 smallholder farmers.

    Tobacco Reporter visited Pyxus Groundnut factory in the first half of 2023 and reported on the operation in its June print edition (see “A Gamble on Goobers“).

  • Malawi Regulator Satisfied With Prices

    Malawi Regulator Satisfied With Prices

    Photo: Taco Tuinstra

    Malawi’s Tobacco Commission (TC) is satisfied with the prices that buyers offered in the 2023 tobacco marketing season, reports Malawi24. The regulator hopes the prices will motivate farmers to grow more tobacco next season

    “This year’s trade demand was at 170 million kilograms and we have supplied 120 million, which means there is a great market opportunity at our disposal,” TC Board Chair Godfrey Chapola was quoted as saying. “One of our strategic goals for the next five years is to raise our annual production to 200 million kilograms.”

    The TC will also be pushing to increase scale and irrigation in tobacco farming over the next five years.

    Chapola said proposed tobacco legislation currently being considered in Parliament would create a more conducive environment for all players and ensure that tobacco remains a strategic crop for Malawi.

    During the 2023 tobacco marketing season, Malawi earned $282.62 million after selling more than 120 million kg of tobacco at an average price of $2.35.

  • Malawi Earns $282.63 Million From Tobacco

    Malawi Earns $282.63 Million From Tobacco

    Photo: Taco Tuinstra

    Malawi earned $282.62 million after selling more than 120 kg of tobacco during the 2023 tobacco marketing season, which ended Aug. 4, 2023, reports Malawi24.

    According to Tobacco Commission Public Relations Officer Telephorus Chigwenembe, the average price this year was $2.35 per kg.

    “It was even more exciting towards the end of the season when buyers offered record prices,” said Chigwenembe.

    He went on to say that there were no serious market disruptions as was the case in the past.

    Registration and licensing of farmers for the 2023/2024 growing season continues at Tobacco Commission offices in Mzuzu, Kasungu, Lilongwe and Limbe.

    The Commission has encouraged farmers to grow more tobacco than they did in the 2022-2023 season.