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New Malawi Investment Initiative

Announcement of New Malawi Investment Initiative – October 2016

Whilst visiting Malawi during 7-12 October 2016, Minister for International Development Alasdair Allan announced £1 million of Scottish Government funding to help Malawian businesses over a three year period, which will be match funded by private investors, providing £2 million in total to invest in Malawi.  Dr Allan said that the announcement marked an important shift in the country’s journey from being reliant on aid support, which will still play a vital role, to increasing investment in Malawi. Speaking at the Malawi Investment Forum in Lilongwe, Dr Allan said:


This funding marks a new chapter in the Scotland-Malawi relationship and is an opportunity to show how responsible investment can make a fair profit, create jobs, grow the economy and reduce aid dependence.

“Historically, trade and investment has been the central component in Scotland’s relationship with Malawi and as Malawi continues its journey from aid to trade, this £2 million Investment Fund will help develop existing businesses and make a social impact. 

“I am hopeful that this will encourage other investors that Malawi is a good place to do business.


Background: beyond aid

The Scottish Government’s International Development Fund has helped to transform thousands of lives for the better. We have done so by pioneering a new model for international development based on harnessing historic and civic links to have maximum impact on the ground.

Trade and investment has been a key component of Scotland’s engagement with Malawi since the 1880s, and it continues to be a key component in the development of the Malawian economy as it moves beyond aid. 

It is increasingly recognised that to end poverty, wealth and job creation supported by trade and investment is necessary, and that even as aid remains important whilst needed, it is only one part of the development toolkit.

While recognising the important role of traditional aid, it is expected that increasing trade and investment links will begin to address the aid-dependency culture in developing countries by strengthening existing businesses and creating sustainable livelihoods. The private sector can have a key and positive impact in this area in particular.

The Scottish Government fully supports any opportunity to increase investment in Malawi, and believes that the role of trade and investment as part of the development toolkit in addition to aid is key to sustainable economic development.

By supporting the creation of the African Lakes Company Limited as a proactive investor in Malawian companies we have helped bring together Scottish and Malawian private equity investors. The Scottish Government believes the invested funds and the exchange of investment management experience will be of mutual benefit and will play an important role in helping Malawi on its journey away from aid-dependence and towards greater self-reliance through sustainable trade and investment. 


Pathway to creation of the African Lakes Company Limited: Governments & private sector discussions

In 2013, during the visit of the President of Malawi to Scotland, an Investment Conversation facilitated by the Scottish Malawi Foundation (SMF) was held involving the President and her Ministers, Scotland’s Deputy First Minister and key members of the Scottish private sector. It was agreed that as part of its support for investment into Malawi, the Scottish Government would work to lay a pathway for a potential group of private Scottish investors interested in investing in Malawi. A visit to Malawi by a group of private Scottish investors, organised by SMF, followed later that year.

In January 2014, during his visit to Malawi, the Scottish Government’s Minister for International Development, Humza Yousaf, attended a meeting in Blantyre, convened by the SMF, with key members of Malawi’s business community, to hear from them about creating a business and investment friendly environment in Malawi and the role of investment and trade in Malawi’s development. Then in December 2014, a second Investment Conversation convened by the SMF, was held in Scotland between the Government of Malawi’s Minister of Foreign Affairs, the Scottish Government’s Minister for International Development and Scottish private investors to build on the first Investment Conversation.  The meeting included discussion on a Malawi Investment, with £1m contributed by the Scottish Government match funded by private investors.

In October 2015, during the visit of the Scottish Government Minister for International Development to Malawi, Humza Yousaf met with the President to discuss investment opportunities. HE President Mutharika reiterated that his Government remained keen that the Scottish Government provide support in the area of investment to enable Malawi achieve sustainable economic development. The Minister provided an update to the President on progress of the anticipated investment initiative.  During 2015-16, discussions continued with a range of potential private investors, including the structures for selecting and managing the investments made from the matched funds.

Whilst visiting Malawi during 7-12 October 2016, Minister for International Development Alasdair Allan announced the new Malawi Investment Initiative was in place, with £2 million total to invest in Malawi, from Scottish Government funding match funded by private investors.


Re-establishment of the African Lakes Corporation

Investments will be managed by a new Scottish company, the African Lakes Company Ltd (ALC), which has been registered as a limited company for this purpose. The African Lakes Company was originally established in Glasgow in 1878 to develop trade as an effective way of displacing slavery in Malawi. More than a century on, that mission has been revived with a contemporary view to investing in Malawi’s future.

Through their support for this venture the Scottish Government aims to prove that with responsible investment we can help Malawi reduce its dependence on aid, support the growth of existing businesses and create sustainable livelihoods


Current status: next steps

  • Investments will be managed by African Lakes Company Limited (ALC), a Scottish private limited company with share capital, with the ALC having been registered as a limited company for this purpose. ALC is now active with a small Board of Directors drawn from the investors.  The Board will oversee the whole project, managing the budget, in due course supporting investee companies, and reporting to investors.

  • ALC has established an experienced Investment Panel, which is drawn from among the private investors and reinforced with expert advisers. The Scottish Government will not sit on that panel.

  • The Investment Panel will determine investments after considering advice from their appointed Malawian investment advisors

  • Edinburgh-based JB Equity Partners are acting as advisers on sustainable investment in food production, drawing on their extensive experience of consulting and raising equity investment for African agribusiness. 

  • ALC is adopting the UN Principles for Responsible Investors. In addition, an internal Investment Policy covering good corporate governance, living wage for employees, non-discrimination, no child labour, etc. is being developed and this will be adopted by investees. It will also be made clear that ALC will not pay and does not condone the payment or receipt of bribes or any other form of corrupt or informal payment, and that ALC investees will be expected to pay their fair share of tax to the Malawi Revenue Authority.

  • Investments are being considered with the first expected to be made within 6 months. Successful investments will be expected to have a social impact by creating jobs and sustainable livelihoods as well as a financial return.

  • The Scottish Government will continue to provide via this website updates as to progress in the establishment of the investment structure at key stages.  The commercial investments themselves will however be treated as commercial in confidence, as required.



    Engaging Scotland’s world-class financial sector with Malawian businesses and asset managers brings the prospect of transformative change. It is clear that these will be commercial investments, not donations.

    A priority sector when considering investments will be companies replacing tobacco with other less harmful crops. However, all suitable commercial investments will be considered within the principles of responsible and sustainable  investment.

    At this stage ALC is actively engaged in considering the initial cluster of investments and they will provide more detail on progress in their annual report. It is expected that they will make a small number of significant investments in businesses where the capital and expertise within ALC and their network can help a business to grow.

    Robert Anderson, MD, African Lakes Company Limited:

    email robert.anderson@africanlakescompany.com