Malawi’s exports to the United States (US) under the African Growth and Opportunity Act (Agoa) increased by 12.5 percent to $54 million in 2022.
The exported value is also higher than Malawi’s imports from the US, seen at $36.5 million in 2022.
This, however, still gives a trade balance of $17.5 million.
According to recent figures published on www.agoa.info, the export earnings are 53 percent shy of the all-time record $115.5 million registered in 2005 and 46 percent shy of the $100 million realised under the pact in 2019.
In a recent interview, Minister of Trade and Industry Simplex Chithyola Banda said the government’s responsibility is to negotiate such trade deals but it is the duty of the private sector to penetrate such markets with products.
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“We have had challenges of popularising these markets but also that most associations, cooperatives and farmers were not quite sure if these markets are viable.
“Time has come now to break the barriers by making sure that we sail across borders. These are the opportunities that we need to take up seriously because that is where we can generate more foreign exchange,” Banda said.
Grain Producers and Traders Association President Grace Mijiga Mhango said, in the past two years, the private sector’s ability to export was marred by supply chain disruption stemming from the Covid pandemic, the Russia-Ukraine war and cyclones.
“There are about three issues that have affected Malawi’s exports in recent years, one of it being logistics.
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“At first, it was disruptions caused by the Covid pandemic and it became difficult to export. After the Covid pandemic came the Russia-Ukraine war. Most of the products we sell to the US are high value products such as tea, coffee, macadamia nuts, among others,” she said.
Mijiga Mhango said production costs have also been way too high in the country due to local economic challenges, which make the country’s product less competitive.
Agoa is a US Trade Act, enacted on May 18 2000 which aims to significantly enhance market access to the US for qualifying sub-Saharan African countries.
It builds on existing US trade programmes by expanding duty-free benefits for approximately 6,500 product tariff lines, including items such as apparel and footwear, wine, certain motor vehicle components, a variety of agricultural products, chemicals and steel, among others.
The Agoa pact gives Malawi and other sub- Saharan African nations duty-free access to US markets for certain goods such as leather, chemicals and agricultural products.
