Sugar producer Illovo Malawi plc direct positive economic impact in the 2016/17 financial year has estimated at K117 billion, which is roughly five percent of gross domestic product (GDP) , a report by a United Kingdom (UK)-based multinational management and social impact assessment consultancy Corporate Citizenship found.
Illovo Malawi managing director Mark Bainbridge attributed the figure to its shared-value mandate, which supported agriculture’s role in job creation, economic transformation and governments’ social and economic development agenda.
“We endeavour at all times to deliver on our shared value mandate, while actively supporting the government’s social and economic development agenda.
“We are committed to the transformation of our business in Malawi, but recognise that to keep ourselves focused and on track, we need an independent benchmark against which to measure our real contribution.”
The value- add for the Malawi Stock Exchange (MSE)-listed firm’s has K36 billion in direct impacts and the balance resulting from the multiplier effects of its business operations within the supply chain and the wider economy.
For example, the report shows that Illovo Malawi’s direct spending on local suppliers increased to K107 billion, payments to employees in the form of salaries, benefits and wages increased by 69 percent to K 22 billion and during the period, the company continued to reinvest in the business spending K17.4 billion on capital investments.
Total direct taxes paid in 2016/17 amounted to K408 million, while indirect taxes totalling K9.087 billion were collected on behalf of the governments, the report indicated.
Illovo employs 9 427 people, but the report estimated a further 14 100 jobs created in outgrower communities and wider multiplier effects. This supports the livelihoods of 42 422people across the country.
On land rights, Illovo Malawi is training land champions and working with identified community support organisations that assist in mobilising and building the capacity of the communities surrounding the operations to be able to openly engage with Illovo about land.
Illovo has also assisted in provising health services with report indicating that Malaria incidences has dropped to an average of 9% in communities surrounding the Illovo Malawi estates, this is down from 20% only five years ago.
The clinics run by Illovo Malawi c attend to 25 000 patients each month.
Illovo Malawi spent K 1.1 billion on fortification of sugar with vitamin A to help eliminate micronutrient deficiency, particularly in children, reaching an estimated 2 million people, according to the report
“We identified critical areas such as job creation, access to healthcare and education, land rights, supply/value chain development and environmental stewardship as key to our own success – and that of the local and national economy. We were very pleased to note that we have made solid progress in meeting our commitments and feel confident that our ongoing transformation strategy and shared value agenda will continue to deliver results,” said Bainbridge
The process to come up with the report involved analysing financial and management information provided by each Illovo country team.
This was followed by site visits to South Africa, Malawi and Zambia and their surrounding communities, as well as interview senior management and key stakeholders affected by the business.Follow and Subscribe Nyasa TV :