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Malawi upbeat on Africa trade pact

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By Taonga Sabola

Trade Minister Sosten Gwengwe has said he is confident Malawi will thrive and will not be crushed in the African Continental Free Trade Area (AfCFTA).

On Saturday, African leaders under the African Union (AU) agreed to create a continental free trade area effective January 1 2021, scrapping off some tariffs among member states as well as removing some trade barriers.

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With Malawi’s list of exportable goods shrinking while the appetite for imports is surging, analysts have expressed fear that Malawi would end up a loser in the whole process.

But Gwengwe said all Malawi needed to do was to identify areas that would give it a competitive advantage and invest its energy in those areas to benefit from the AfCFTA.

“We need to be positive and start thinking big. There are a number of areas in which Malawi has a competitive advantage. You look at areas such as agriculture. We have fertile soils and plenty of fresh water. “There are other countries on the continent which are not as fortunate as we are. It is time we look at our position and see what we can effectively contribute to continental trade and make money,” Gwengwe said.

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Speaking after the 13th Extraordinary Session of AfCTA, President Lazarus Chakwera said the continental free trade area was something Africa had been waiting for and that has decided, further pointing out that the establishment of the continent’s free trade area was a tremendous achievement that comes after many years of negotiations.

“There is joy, excitement, even to our forbearers — people that have dreamed of pan-Africa— this is a fulfillment of the dream that we have all been looking for,” Chakwera said.

New AU Chairperson Cyril Ramaphosa challenged the African private sector to cease the opportunity and make the best out of it.

Recent studies have indicated that Malawi could lose about $11 billion [around K8 billion] in revenue due to the liberalization 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.

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