By Kingsley Jassi:
Minister of Industry and Trade Vitumbiko Mumba admitted the import ban needs to be extended to services as there is huge potential to save forex and generate some if the sector is well nurtured.
At a briefing held on Monday to clarify the ban which targets products also already produced locally, Mumba said the service sector was overlooked during assessment.
“You are right, that is another potential area we need to look at and assess which services can be adequately provided locally. It is an area we overlooked but thanks for bringing it forward,” Mumba said when asked.
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The service sector could be draining a lot of forex as seen in trade figures by the World Bank and Ministry of Finance and Economic Planning.
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While the World Bank’s own trade assessment in the Malawi Economic Monitor finds that the combined 2024 imports of goods and services totalled just over $3.5 billion, the government Annual Economic Report for the year puts goods import only at $3.1 billion, which may suggest services imports were in excess of $400 million.
Some of the service industries, notably construction and ICT, indicate considerable local capacity that needs to be utilised more to save some forex as both industries are dominated by imports.
According to Mumba, with some policies and laws already available, there is need for enforcement to ensure both the public and private sectors embrace the local industries by utilising available products and services to grow the industrial base.
National Construction Industry Council Chief Executive Officer Gerald Khonje, said efforts are already underway to further build capacity in both the construction services and equipment production, which have high potential.
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“Indeed, there are areas of high potential. We just need to step up efforts and have a clear position on the use of locally available capacity,” Khonje said.
He said there are some measures already put in place that include the Joint Venture and Sub Construction regulations that require foreign contractors to partner with local firms.
He further said the NCIC will soon launch a scheme that will provide understudy provisions during major construction projects, to ensure locals acquire skills from foreign contractors to be able to implement complex projects on their own.
In an earlier statement, Sparcs Systems Chief Executive Officer Wisely Phiri said there is low acceptability of local ICT services and skills despite the local companies being appreciated in other countries.
Phiri said it was worse in the public sector which needed to improve on the use of locally available ICT solutions.
“On the government front I can say we have not done that well. The percentage of business from government entities is below 10 percent. The experience is very different in other countries where we operate,” he said. In 2023, for instance, National Bank of Malawi indicated to have imported $10 million worth of ICT services, prompting the bank to start registering a subsidiary to provide ICT services as a way of substituting imports.
