The piece “Export Development Fund ready to finance mineral sector projects” featured below was initially published in Malawi’s Mining Review Issue Number 24 2015 that is circulating this April 2015.
The full edition is available for download here.
To learn more about this quarterly publication, edited by Marcel Chimwala, read the post about the “Voice of the mineral sector in Malawi”.
EDF ready to finance mineral sector projects
- EDF offers development financial solutions aimed at boosting the country’s forex generation
By Mining Reporter
Export Development Fund (EDF) says it is ready to finance viable projects in the country’s mineral sector in order to promote exports of mining products and enhance import substitution.
EDF’s Chief Executive Officer Mr. Efford Goneka says being a development financial institution; EDF’s primary objective is to create and develop export enterprises in Malawi and position them as critical agents of foreign exchange generation through the provision of affordable financial services.
The financing facilities offered by EDF are in both United States Dollar and Malawi Kwacha currencies.
Our services are aimed at boosting the productive capacity of export businesses either through working capital or project financing.
According to Goneka, EDF uses its investments and other resources to support the set up, expansion, diversification and modernization of projects in the economy.
Preference is given to projects that promote export earnings, exports diversification, import substitution and technological transfer,
Goneka explains that EDF, in support of the Malawi National Export Strategy (NES), aims at financing and promoting different economic sectors in Malawi in-order to encourage diversification from traditional exports.
In addition to the services being offered, EDF is encouraging and supporting value addition projects in a bid to reduce the tendency of exporting commodities in a raw form.
Although Malawi’s economy has always depended on a narrow productive export base which is largely comprised of unprocessed agricultural products, EDF believes there is potential for value addition and promoting the diversification of export clusters such as mining and mineral processing, tourism, agro-processing and manufacturing
The Fund also provides advisory services as it realizes that export development, promotion and growth require more than just finance.
There is evidence that management and advisory services assume a critical role in the success of developmental projects and helping businesses expand and create jobs. To help the export enterprises, EDF has a team of qualified and dedicated staff that will offer business advice and intermediary services relevant to exports,
Export Development Fund is a development financial institution established by the Malawi Government and the Reserve Bank of Malawi in response to the country’s export/import imbalance due to the economy’s high dependence on tobacco as the major foreign exchange earner.
In view of this, the Government through EDF has prioritised diversification of exports by focusing on oil seeds products, sugarcane products, tourism, mining and manufacturing products as set out in the National Export Strategy.
As a catalyst for export promotion, diversification and growth, EDF’s goals include ensuring that Malawi’s vast export business opportunities are exploited; and promoting projects that have potential for exports, wealth creation and job creation.
Malawi’s exports have grown at a slower pace than imports over the past 10 years creating an unsustainable structural deficit that leaves the country vulnerable to foreign exchange shocks.
It is in this regard that EDF was created as a special purpose vehicle to extend financial assistance to export businesses in Malawi with much emphasis on their creation, expansion, diversification and modernization. We urge stakeholders in the mining sector including large and registered small-scale mining cooperatives to take advantage of the existence of EDF’s services,
Goneka says in order to access the export finance facilities from EDF, companies are required to submit to the Fund their profiles supported by documents including certificate of incorporation, business registration certificate, articles and memorandum of association, evidence of suppliers of raw materials and the export market for the product, financial history and projections of the business and a detailed financial plan, and risks and safeguards of the business.