By Kingsley Jassi:
The Ministry of Trade will review the country’s trading performance with the United States under the Africa Growth Opportunity Act (Agoa) amid stagnation of level of exports.
In the first 10 months to October 2024 for instance, Malawi exported $37.6 million worth of goods under the facility, with imports seen at $24.9 million.
In 2023, Malawi exported goods worth $44.6 million and imported goods worth $18.1 million, creating a positive trade balance of $26.5 million.
- Advertisement -
That compares unfavorably to Zambia’s exports worth $153.3 million that year and Malawi’s own record exports worth $115.5 million in 2005.
- Advertisement -
Recently, Ministry of Trade officials appeared before the Parliamentary Committee on International Affairs where Principal Secretary Christina Zakeyu acknowledged the low performance amid vast potential.
She told the committee that her ministry was planning to review Malawi’s performance under the Agoa market to address bottlenecks and improve participation.
Malawi largely exports agricultural commodities such as tobacco, tea and sugar.
Agricultural policy expert Candida Nankhumwa said the country needs to address a number of areas including cost of financing, technology and infrastructure to facilitate and improve productivity.
- Advertisement -
She said with low productivity, it becomes a challenge to sustain supplies to such markets that look for consistency to avoid disruptions that affect the businesses that need such import.
“We should take the value chain approach to set up production systems in the targeted industries and facilitate private sector investments and support production by the farmers,” she said, commending the ongoing efforts like the agriculture commercialisation initiative.
“One problem is that our productivity is very low and we cannot sustain supplies for a long period so obvioulsy they will look for those that can sustain supplies,” Nankhumwa said.
To achieve that, she suggested investment in infrastructure and providing low financing solutions while consolidating land use among small scale producers to ensure scaling up production volumes.
She further said extension services also need to be enhanced to ensure quality produce to respond to demands by such high value markets.
However, Nankhumwa said there is need to ensure local satisfaction first before focusing on regional and the international markets, a gradual process that would eventually address the quality issues on the exports.
Agoa was opened in 2002 to strengthen trade ties between the US and African countries.
