Economic experts have urged Capital Hill to revamp the manufacturing industry if the country is to benefit from the African Continental Free Trade Area (CFTA).
Last week, leaders of 44 African countries signed a deal to create one of the world’s largest free trade blocs.
It is hoped the deal will come into force within six months, and increase prosperity for 1.2 billion Africans.
Malawi Economic Justice Network (Mejn) Executive Director, Dalitso Kubalasa, said the country must put its house in order to benefit from the treaty once it comes into force.
Kubalasa said to accelerate the pace of integration, free trade competition leaves no room for the weak countries, hence, Malawi should start its preparation now.
“Like all other agreements, the next thing is to have it ratified. How soon this could happen would depend on how ready Malawi and the other signatories are.
“There is going to be increased Foreign Direct Investments (FDI) as companies rush to establish operations aimed at taking advantage of the large market. There would be job creation as many would get employed in the new companies or as other companies increase their production to meet the increased demand for our goods and services,” Kubalasa said.
He cited the Malawi Growth Development Strategy MGDS III (MGDS III) launched recently as an important tool to help Malawi to make the most of the free trade area.
Business columnist, Alick Nyasulu, said the signing of free trade area is good for Malawi, especially to consumers, since they will have wider choice of products to buy.
He, however, concurred with Kubalasa that the pact is tricky on exports.
“I don’t see any immediate benefit unless we fix the old issues that make production expensive such as electricity. We need to move towards huge commercial production,” Nyasulu said.
Minister of Foreign Affairs, Emanuel Fabiano, was among 44 African heads of state and ministers who signed a deal to create one of the largest free trade blocs in the world.
The CFTA would remove barriers to trade, like tariffs and import quotas, allowing the free flow of goods and services between its members.
In theory that should boost commerce, growth and employment.
But 10 countries, including Nigeria, have refused to sign the deal, and it will need to be ratified by all the signatories’ national parliaments before the bloc becomes a reality.