Two companies have expressed interest to start manufacturing cigarettes in Malawi, a move which could help the country create more jobs and achieve import substitution in the long-run.
The companiesâ€”Jubilee Tobacco Company and Japan Tobacco International (JTI)â€”are currently discussing with the Malawi Government, through the Ministry of Industry and Trade, to ensure that their investment plans materialise.
This is a according to an annual economic report by the Ministry of Economic Planning and Development which has reviewed major economic highlights for 2011.
Minister of Industry and Trade John Bande has since welcomed the development, saying it will also help the country grow its export apart from boosting employment levels in the process.
Currently, Malawi has one company â€”Nyasa Tobacco Manufacturing Company â€”which produces locally-made brand of cigarette in line with the governmentâ€™s vision of adding value to â€˜Malawiâ€™s Green Goldâ€™.
But the sole cigarette manufacturer is producing minimal cigarette quantities and is said to be on an expansion drive with a $15 million reinvestment in its machinery.
“The ministry has since facilitated the identification of land for the JTI factory in Kanengo,” reads the annual report.
Despite tobacco being Malawiâ€™s main export commodity, the country continues to export semi-processed tobacco to the international market which has over the past years led to worsening trade balance as total imports value have been surmounting exports value.
The report says the Malawi Government in partnership with Nyasa Tobacco Manufacturing Company also plans to increase the production of cigarettes to lessen dependency on external buyers.
“In view of this, the Nyasa Tobacco has requested government assistance to secure finances to enable them to procure a filter-manufacturing machine, cut-rag and land for their factory in Kanengo, Lilongwe,” adds the reports.
In an interview on Wednesday, Bande commended the two companies for considering investing in the country, saying such industrial projects will help Malawi boost its export growth, among others.
“It is a response from the political will shown by President Joyce Banda by carrying out major reforms in the private sector issuesâ€¦This is just the beginning of good things. Employment and export drive will go up,” said the minister.
He said government would like to see Malawi improve on its doing business rankings by the World Bank which currently ranks the country at 143 out of 185 countries assessed.