Malawi is Africa’s second largest producer of tea, accounting for around 4% of world exports. Currently tea exports, the second most important export earner, stand at about 43,000 metric tonnes.
Malawi’s climate is excellent for tea cultivation. Apart from the commercial farms, there are about 7,000 smallholder farmers engaged in tea production, all selling their produce at the country's only tea auction in Limbe.
Tea is exported in semi-processesed form to European, Asian and American markets.
Investment opportunities
Opportunities exist in the following areas;
• Development of new clonal varieties. These varieties are more productive and of higher quality, which will increase the average price received for tea.
• Investment in irrigation infrastructure will generate significant and almost immediate
increases in yields. Irrigation would ensure productivity is not interrupted during the dry season in June and November. The existing factory capacities would then be utilized full time.
• Opportunities exist in revamping existing tea processing facilities and the construction of new tea processing facilities. Contract management of small holder tea processing offers an additional opportunity.
• Production and processing of specialty teas such as green tea and hibiscus for export to East Asian markets is another opportunity that investors can take advantage of.
Available incentives
Incentives related to these opportunities are general and include;
• 100 % investment allowance on qualifying expenditure for new building and machinery
• Allowances of up to 40 % for used buildings and machinery
• Loss carry forward of up to seven years, enabling companies to take advantage of allowances
• Additional 15 % allowance for investment in designated areas of the country
• Duty-free direct importation of building materials for factories and warehouses
• Free repatriation of dividends, profits, and royaltie
For further information regarding investing in the tea sector, contact the Malawi Investment promotion Agency(MIPA).
Contact person:
Noel G. Lihiku
Planning and Research Manager
nlihiku@mipamw.org
