Page 24 - DMA Malawi Report 2013

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Investing In Malawi
f you were an enthusiastic
traveler planning your next exotic
holiday location and you happened
to chance upon the landlocked
Republic of Malawi in a glossy holiday
brochure, you would be forgiven for
thinking that you had stepped into the
rarified world of an ad man’s over-fer tile
imagination. In such brochures, Malawi is
invariably lauded as “the warm hear t of
Africa” and its central attraction – the
500km-long Lake Malawi – is emphatically
described as the “lake of stars”. Emotive
though the promotional language may
be, it’s not altogether misleading. Malawi
does indeed have an unrivalled reputation
for hospitality and friendliness, and a
magnificent, shimmering lake stretching
along its mountainous, eastern borders
with Tanzania and Mozambique. Malawi
also has its fair share of wildlife (even
by African standards), including an
oppor tunity to see the ‘big five’ (lions,
leopards, elephants, rhinos and Cape
buffalo) in the Majete Wildlife Reserve
plus a host of other wildlife oppor tunities,
including exploring the abundant aquatic
life in its great lake.
So perhaps Malawi is a destination that lives
up to the hype after all? Well, it is certainly
true that investors are beginning to reassess
this small African country and growing
numbers now perceive it to be a viable,
investable, eco-tourist destination. With
bags of untapped natural potential, recent
investments into its wildlife reserves by the
likes of the World Bank, a largely English
speaking population and a liberalised, free
market investment environment, it’s not
hard to see why serious tourism money
is starting to take a renewed interest in
Malawi – it is beginning to look like a safe
bet from a risk-reward perspective. There
are of course still challenges to overcome,
including those that relate to the lack of
infrastructure and the negative impacts
of climate change and rural poverty, but
the general trend is definitely towards an
increasingly vibrant tourism sector ; capable
of competing with some of the more
established African tourist destinations
such as Kenya and South Africa.
Malawi’s economy is currently based
primarily on agriculture; with over 80% of
its 15 million people living in rural areas,
and agriculture accounting for more than
one-third of GDP and almost 90% of
expor t revenues. It has historically relied
heavily on cash crops such as tobacco
and tea as sources of foreign exchange
but in recent years the government has
made concer ted effor ts to diversify the
country’s economy into other sectors –
and tourism is a priority sector.
A thriving tourism sector will not only
provide a welcome, additional supply
of foreign exchange but it will attract
much needed foreign direct investment
(FDI), which will in turn facilitate a
more sustainable form of ‘grass roots’
development; including, for example,
new employment oppor tunities for poor,
rural communities, and sustainable forms
of tourism that will facilitate and fund
the protection and preservation of the
natural resources that they rely on.
Tourism is considered a key strand in
Malawi’s pover ty reduction strategy,
especially as the country can attract high-
spending tourists as an eco-destination.
According to the government, 5% of
by Brian Naughton