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Malawi passes AfCFTA tariffs

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CHIKHASU—most
businesses are interested in importing

With the passing the 2021/22 national budget, Malawi has passed tariffs which will mark the beginning of the African Continental Free Trade Area (AfCFTA) from July 1, 2021 in the country.

Different countries started trading under the pact in January this year but Malawi waited for the passing of the national budget to actualise AfCFTA tariffs in line with the laws.

The country has placed three categories, non-sensitive which will see a 50 percent drop industry rates, sensitive which will see reduced duty after some time and third category which unless otherwise, will not see reduced or removed duty.

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Speaking in an interview, Ministry of Trade Assistant Director of Trade Diamond Chikhasu said non sensitive are products which the country does not manufacture while sensitive products comprise those which the country manufactures but not in huge capacity.

The third category consist products that the country manufactures and imports are not needed.

“Our tariff book has 7,800 products and out of those products, 90 percent of those products lines are non-sensitive therefore their tariffs have dropped by 50 percent and these products are those that we need but we cannot produce so there is no need to maintain high duty on products that are needed but we cannot manufacture,” he said.

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It is, however, not surprising that 90 percent of the tariff book is non sensitive because Malawi is a country whose manufacturing sector remains in its infant stage.

With 90 percent of the tariff book being non sensitive, some stakeholders have doubted if Malawi will benefit from the pact.

Economist from Malawi University of Business and Applied Sciences Betchani Tchereni, however, believes the country stands to benefit if the industry peaks up.

“The Minister of Trade has challenged the local industry on import substitution but it seems most businesses are interested in importing finished goods, unless that mindset changes, we will not benefit much from this pact,” he said.

AfCFTA is an African market where all African member states will be trading with reduced or removed tariffs on certain products.

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