Malawi lists AfCFTA protected products
Malawi will shield over 231 products from the competition under the African Continental Free Trade Area (AfCFTA) terms.
Under the AfCFTA agreement, signatories are obliged to remove tariffs on 90 percent of goods they produce by 2022 and eliminate non-tariff barriers to trade, such as long customs delays at borders, import quotas, subsidies, regulatory bottlenecks and so on.
But countries are also permitted to single out products which require shielding for the purposes of protecting an infant industry.
The AfCFTA provides for differential treatment in order to protect Least Developed Countries (LDCs) from bigger and more competitive countries such as South Africa, Nigeria or Egypt.
According to a paper published by Cuts International dubbed ‘African Continental Free Trade Agreement: Opportunities and Challenges’, the LDCs have been granted a 10-year delay to remove tariff barriers in strategic economic sectors.
Among others, countries like Malawi and Niger have obtained a 15- year delay to remove tariff barriers.
In an interview, Ministry of Trade spokesperson Mayeso Msokera said the agreement allows seven percent of products to be categorised under the sensitive list and three percent under exclusion list, which caters for almost 231 products under protection.
“These lists have been developed in consultation with the private sector and essentially cover all essential products for Malawi.
“They will also be sent to the African Union secretariat for negotiations. Therefore, it would not be ideal at this moment to start disclosing the specifics,” Msokera said.
In a separate interview, Director of Business Environment and Policy Advocacy at the Malawi Confederation of Chambers of Commerce and Industry Madalitso Kazembe said the private sector’s emphasis is on protecting the nascent local industry and local products.
“We were also interested in protecting products with potential at large scale to encourage import substitution and reduce pressure on our Balance of Payment.
“We are therefore, encouraging government to support local industries, especially those that use local materials, in order to achieve this,” Kazembe said.
National Association of Small and Medium Enterprises National Coordinator William Mwale said the association lobbied for protection of legumes and horticulture products, cotton and cotton-related products, rice, maize, beef products, milk and allied products.
The AfCFTA went into force on January 1 2021.
Malawi is among countries which already submitted instruments of ratification for the AfCFTA.
The trade agreement aims to create a single continental market for goods and services, with free movement of business persons and investments within the African region.
Recent studies have indicated that Malawi could lose about $11 billion (around K8 billion) in revenue due to the liberalisation of tariffs under the AfCFTA.
The AfCFTA is expected to create the largest free-trade area in the world measured by the number of countries participating. The pact connects 1.3 billion people across 55 countries with a combined gross domestic product valued at $3.4 trillion.
It has the potential to lift 30 million people out of extreme poverty.