Your Excellency Professor Arthur Peter Mutharika, President of the Republic of Malawi
Your Excellency Professor Gertrude Mutharika, First Lady of the Republic of Malawi
All protocol observed
Your Excellency, it is a great privilege and honor to participate today in the launch of the Malawi Agricultural and Industrial Investment Corporation. This is indeed a milestone for the nation of Malawi. At the outset, let me congratulate you, Your Excellency, for the ground-breaking decision you and your government made to sponsor a commercially oriented, private sector driven, Public Private Partnership to invest in and develop the private sector. I also wish to pay particular tribute to Honorable Goodall Gondwe, Minister of Finance, Economic Planning and Development with whom I had the pleasure to meet and discuss this concept in both Washington and Lilongwe. Mr. Minister, we sincerely thank you for your insights and your steadfast commitment to the bold principles introduced into this concept of an Investment Corporation. I also refer to early stage discussions with Governor Kabambe regarding a Malawian DFI and the message then was this would be a private sector driven project. Mr. President, we knew that your economic Team was firmly united in the project’s direction.
Your Excellency, ladies and gentlemen, please allow me to provide some background on why the creation of an Agricultural and Industrial Investment Corporation is so important for Malawi.
Malawi has enormous demand for long term capital across all sectors. These range from agriculture, manufacturing, mining, infrastructure, tourism, to SME development to name a few. The investment risk profile and long-term financial commitments to support and grow these sectors prohibit Malawi’s commercial banks from addressing these needs. Demand studies have revealed that the private sector in Malawi requires financing to the tune of K2.8 trillion (or approximately USD4 billion). Through structured project financing techniques involving both equity and debt capital, combined with risk and term mitigants, Malawi Agricultural and Industrial Investment Corporation, with its access to long term capital, will play a catalytic role in working with Malawi’s commercial banks to start addressing the large private sector financing gap. We were appreciative that National Bank understood the potential and indicated their interest to follow this project as it develops.
Mr. President, at this point, I would like to comment on the work undertaken by the Project Steering Committee to operationalize the concepts agreed for the Malawi Agricultural and Industrial Investment Corporation. While not being a member of this Committee, I have appreciated the quantity and quality of the work that has gone into the design of this investment vehicle being launched today. Your Excellency, please allow me to thank members of the Project Steering Committee led by Kofi Sekyere, Director of CDH Investment Bank (CDHIB), who sends his sincere apologies for his absence today due to a prior long-standing commitment in West Africa. Mr Sekyere was assisted by other directors of the bank namely, John McGrath, Robert Abbey, Dr Naomi Ngwira, Charles Asare, and Misheck Esau (our CEO/MD of CDH Investment Bank). I also want to thank Dr. Macdonald Mwale, Director of Economic Affairs in the Ministry of Finance for his strong participation on this Committee.
Your Excellency, while we have thanked the Project Steering Committee for their work, their work is not yet complete. During the months ahead, the Project Steering Committee (PSC) will transition their responsibility to the new Board and Management of the Malawi Agricultural and Industrial Investment Corporation. While the Business Plan is substantially complete, time is required to develop numerous Policy and Procedural documents covering investment and lending activities which incorporate due diligence procedures and enterprise risk management principles. Treasury policies, human resource manuals, (ESG) environmental, social and governance policies, strict compliance policies aligned with international best practice on Anti Money Laundering (AML), Know your Client (KYC) and Anti -Terrorist Financing (ATF) Principles, Transparent Reporting and Disclosure standards and conflicts of interest declarations are all policies and procedures which form the infrastructure for this Investment Corporation. This infrastructure will be critical to attract domestic and international capital for the Investment Corporation. Infrastructure takes time to build and we believe it is important to manage expectations and encourage patience as this process is completed. CDH Investment Bank is committed to work with the Board and Management of the Company to take it to full operational status.
Distinguished ladies and gentlemen, CDH Investment Bank, is very pleased to have worked with government on this development finance institution (DFI) project which now has been formally incorporated. As Chair of CDH Investment Bank I am very proud of the strong team we fielded for this challenge including Executive Management and Independent Directors with relevant experience in large ticket transactions involving complex projects. I believe you will recall Your Excellency, CDHIB has built a track record of working with government on priority transactions to operationalize Umodzi Park, Salima Sugar Company as well as to finance maize procurement when the country faced an acute food shortage two years ago. We hope you will agree that Your trust in CDH Investment Bank has not been misplaced.
Your Excellency, in this work CDH Investment Bank received a vote of confidence from the nation and it is our hope that the institution is able to achieve its primary objectives. The seed capital of K22 billion (USD25 million) invested by Government in this institution demonstrates an underwriting commitment which combined with a serious business plan, strong corporate governance and the infrastructure referred to earlier, will enable MAIIC to start an aggressive capital raising program to attract domestic and international funding to leverage Government’s initial funding. With regards to raising longer term higher risk capital, Malawi Agricultural and Industrial Investment Corporation requires support in the form a pre-agreed long- term period of tax exemption. The Project Steering committee made a submission to the Ministry to make the entity tax exempt for a considerable defined period. We endorse the PSC request and hope this will be considered and approved at an early stage so as to be incorporated in the Company’s Capital Raising initiative.
Your Excellency, ladies and gentlemen, as mentioned earlier, the Project Steering Committee will soon transition its responsibilities to the appointed Board of Directors of the Malawi Agricultural and Industrial Investment Corporation. Work is continuing to recruit a CEO/MD of the Company and identify additional Directors, some of whom may be international, to comply with separate Board Committee membership requirements. At this time, please allow me to introduce you to those members of the inaugural Board of Directors who have been appointed:
- Donbell Mandala, a Malawian insurance professional who is currently CEO of Nico General Insurance
- Charles Kamoto, a Malawian business executive and CEO of Airtel Malawi
- Sangwani Hara, a Malawian chartered accountant and business executive working with Makandi Tea Plantations.
- Ben Botolo, Secretary to the Treasury representing the Government
- Clement Kumbemba, CEO of the Malawi Investment and trade Center (MITC) also representing Government
We wish to thank them for agreeing to serve on the board and as Founding Directors, their leadership will have a long-term impact on the operations of MAIIC. With your permission Mr. President, please let me request them to stand so we can congratulate them. [BREAK -Applause]
Your Excellency, ladies and gentlemen, we again applaud Government on this occasion as you will now have a Development Finance Institution (DFI) which will help in the realisation of the Malawi’s Growth and Development Strategy III (MGDSIII) which focuses on a renewed commitment towards building a thriving and sustainable economy, eradicating poverty and ensuring alignment with other longer-term socio-economic development initiatives, including the U.N. Agenda 2030 on Sustainable Development Goals (SDGs), and the African Union Agenda 2063.
In closing, I thank you all for your attention and may the Malawi Agricultural and Industrial Investment Corporation be a long term valued Public Private Partner in Malawi’s economic development.
I thank you.