African Export-Import Bank (Afreximbank) president Benedict Oramah on Wednesday said his bank has earmarked $1.4 billion (K1.1 trillion) for investment in Malawi.
Oramah is on a three-day visit to the country to meet businesspersons with bankable projects. He is also expected to sign finance agreements with President Peter Mutharika this afternoon.
Speaking to journalists on arrival at the Presidential Hotel in Lilongwe, he confirmed that his bank has set aside the money for projects in Malawi.
“We have $1.4 billion in the pipeline for development for Malawi, we will explain all the programmes once I have met all the investors,” Oramah said in his brief interview soon after arrival.
He met various businesspersons who presented their respective bankable projects to Afrexim bank for possible financing. The loans have a minimum threshold of $10 million (K7.7 billion).
The $1.4 billion is expected to change the country’s development architecture, according to a concept note prepared by Export Development Fund (EDF).
The projects include the Mangochi International Airport, a holiday resort at Cape Maclear and a logistics park in Mangochi. Other projects include industrial parks in Blantyre and Lilongwe, according to EDF, a government development finance institution that signed a mandate letter with Afreximbank to facilitate a feasibility study on the IPs and a tourism hub.
One of the local business captains MBL Holdings chief executive officer Leston Mulli said his company expects to tap $200 million (K154 billion) from the bank to finance his mobile phone company Celcom, whose project stalled in 2012.
“This is one of the biggest banks in Africa, the money they will give will benefit not only government but also the private sector, Celcom is one of them. We already signed for $30 million dollars [K23 billion]as bridging finance. So, it’s just a matter of reviving and rolling out of our project. We have already done infrastructure, we are just remaining with the equipment,” he said.
Countrywide Group of Companies director Mike Mlombwa said he hopes that the bank will grant him $20 million for expanding holiday resorts and apartments.
“There are a lot of us who have come, we have hope that this will help us. We have many business persons in Malawi, as Countrywide, we have asked $ 20 million for hotels, resorts and apartments, it’s up to them to buy our projects,” he said.
However, a project brochure prepared by EDF says Afreximbank will also bring at least 10 major international investors whose projects the bank is set to fund for implementation in Malawi.
Some of the visiting potential investors according to EDF include Orascom, El Sewedy, Apex Trading, Mota-Engil, Thessah Madagascar Group and Home Pride Investment London.
University of Malawi’s Chancellor College economics professor Ben Kaluwa said the projects, if implemented according to the plan, are bound to transform the country and bring in positive multiplier effects.
“We are looking at the jobs that the projects will create and the resultant economic development. This money is huge and will obviously change the country’s development landscape and have positive ripple effects,” he said.
The visit by Oramah and team comes at a time when players in the private sector are reeling from high cost finance, which the World Bank has repeatedly cited as one of the major obstacles to doing business in the country.
The cost of financing businesses in the country’s financial sector remains high despite the central bank, Reserve Bank of Malawi (RBM), revising downwards its benchmark rate-the rate at which commercial banks borrow money from RBM-twice this year.