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Ganging to choke local businesses

By Watipaso Mzungu:

Three times a week, Christopher Sakala, a motorcycle taxi operator based at Mchinji Boma, rides his motorcycle through Mchinji Hill down to Chipata in Zambia to buy products for sale back in Malawi.

Sakala is a trusted errand man for both small and large-scale traders at Mchinji Boma.

“My major customers are traders of Burundian and Rwandan origin and police and immigration officers who import goods such as beers, zitenje (wrappers), jewelry and groceries. The products that feature highly on my errands to Chipata are alcohol and non-alcoholic drinks,” he explains.

Occasionally, Sakala would use normal routes to transport goods from Zambia, especially when the businesspersons who sent him include police and immigration officers, he claims.

He says there are a number of law enforcers who are operating bars at Mchinji Boma and Kamwendo Trading Centre.

“And these are the officers who protect me. They guarantee my security and safety when they send me to buy goods from Chipata. They ensure that I do not get arrested for illegally bringing Zambian goods into the country,” he confided in me.

Malawi Revenue Authority Commissioner General, Tom Gray Malata, acknowledges the proliferation of smuggled goods such as Chibuku Super and other illicit beers on the local markets.

Malata warns that while smuggling of goods, including opaque beer into Malawi poses serious health risks, the malpractice is depriving government of tax revenues necessary for social services provision.

“The authority has observed that some unscrupulous traders are smuggling opaque beer into the country. Smuggling and sale of opaque beer distorts market prices and creates unfair competition on the market.

“This is because smuggled beer is sold at low prices and, as a result, the local beer industry will collapse, leading to many people losing their jobs,” he says.

And it would seem Malawians have started paying the price. Just last month, Castel Malawi Limited (CML) announced its intention to lay off about 300 workers due to the harsh economic climate in the country.

CML states that it could no longer avoid retrenchments because of the volatile economic climate.

“We continue posting the losses,” says the company.

It further announced that it had reduced to two bottles per person during happy hours and that visitors would no longer be allowed to patronise the Friday Happy Hour.

Chibuku Products Limited (CPL) Business Development and Corporate Affairs Manager, Gloria Zimba, says the company is also grappling with the infiltration of illegal and uncertified opaque beer and other products.

“Smuggling infringes CPL’s exclusive right to use registered Trademarks ‘Chibuku Super’ and ‘Chibuku Shakeshake’. Those trading in these products do not pay taxes and do not pay for trading licences. As a result, they are able to sell these products at far much lower prices than CPL, which are subject to licencing and tax,” she says.

She says smuggling was anti-competitive, contravenes fair trading practices and has led to significant loss of business and brand reputational damage for CPL.

Besides encouraging the general public to report illegal importation of goods into the country, it is the expectation of every well-meaning citizen that MRA would cooperate with other government security agencies such as the Malawi Police Service and the Department of Immigration in enforcing the Customs and Excise Act.

This Act, among others, describes smuggling as a serious offence under it and that goods imported without a licence should be liable to forfeiture.

It says besides depriving the government of revenue for public expenditure, smuggling distorts market prices, thereby depriving traders of fair competition, which might lead to the collapse of local industries.

In Chilinde, Chinsapo, areas 25 and 36, many traders are importing and selling illegally imported beers and other products right in front of police units.

Of course, Malata once assured that MRA would intensify patrols and inspections in all business and trading centres of the country in order to seize any smuggled opaque beer with anybody caught to be punished in accordance with the Act.

But there are those who wonder whether this could be possible in the wake of immigration and police officers taking the lead in the illegal importation and sale of beer in border districts of Mchinji, Dedza, Mzimba and Mwanza.

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