Old Mutual Malawi plc has partnered with the Public Private Partnership Commission (PPPC) in an estimated K40 billion project to build hostels to accommodate 4 700 students at two public universities to ease lodging challenges.
Speaking during the opening of a three-day Infrastructure and Public Private Partnerships Capacity Building Workshop organised by Old Mutual and Guarantco in Blantyre yesterday, Minister of Finance Felix Mlusu said the project will complement government’s efforts to improve the quality of tertiary education.
He commended Old Mutual Malawi for utilising the PPP arrangement to invest in infrastructure that will help in uplifting the quality of tertiary education in the country.
Mlusu said: “This is no small project. We are impatiently waiting for the project and there could not have been a better time than now when the economy is returning to normal after disruptions induced by the Covid-19 pandemic.”
He said although education is one of the key sectors to the success of the Malawi 2063, the country continues to lag behind in terms of key education indicators.
Mlusu said: “Enrolment rate for Malawi at 79 students per 100 000 individuals is significantly low compared to other countries in the region. For instance, Ghana is at 1 370, Mozambique at 496, Kenya at 422 and Nigeria at 977.
“Worse still, access to education deteriorates as we move up the education ladder. As at 2018, access to higher education for Malawi stood at 0.8 percent against an African average of 13.0 percent and a global average of 33.0 percent.”
The education sector features among the top five priority expenditure sectors by government.
In the 2021/22 National Budget, the sector received the highest allocation at K327.30 billion, representing 16.4 percent t. Agriculture at 14.3 percent, transport and public works at 10.5 percent, health at 9.4 percent and energy at 3.1 percent follow it.
Currently, Kamuzu University of Health Sciences (KuHes), constituting College of Medicine and Kamuzu College of Nursing, can only accommodate half of its student population while Lilongwe University of Agriculture and Natural Resources accommodates less than 25 percent.
Old Mutual Malawi has been working with GuarantCo to provide bond holders with a partial credit guarantee for the construction of the student hostels at the two universities’ campuses in Blantyre and Lilongwe.
In the meantime, Old Mutual Malawi is seeking approvals to issue a bond with development finance institution GuarantCo providing bondholders with a partial credit guarantee.
The bond will be rated and listed on the Malawi Stock Exchange where K40 billion is projected to be raised.
In her remarks, Old Mutual Malawi group chief executive officer Edith Jiya said her company embarked on the project after noting the dire situation students were experiencing in accessing accommodation, especially in public universities.
“In some cases, university students find accommodation in structures that are not good for their development. The project we have embarked on with PPPC will cater for both under-graduate and post-graduate students and create a safe environment for students,” she said.
Jiya said that the company has so far constructed 154 beds at KuHes Lilongwe campus to be ready for occupation in early 2022.
“This is a very big undertaking, and we cannot do it alone. We have engaged and continue to engage many experts and stakeholders to ensure we effectively execute this project” she said.
PPPC chief executive officer Patrick Kadambo said Malawi is on the right path in attracting private financing.
He said the recently advertised hotel projects in some of the country’s tourism parks have received a lot of response from the domestic market.
The workshop has targeted asset, pension fund and investment managers from the local market to build their capacity on the various models of private participation in infrastructure and investment options to effectively contribute to national development goals.
Facilitators from Euromoney and Guarantco are at the centre of it all.
Under PPP, the public sector enters into long-term contracts with the private sector players to provide a public asset or service to improve efficiency.