By Kingsley Jassi:
The Ministry of Industry and Trade has hinted at restricting trading business licences to protect and empower indigenous Malawians.
The wholesale and retail trade in Malawi is the country’s second largest economic sector, after agriculture, contributing about 12 percent of gross domestic product (GDP), according to official figures.
After a recent inspection of sugar trading activities in various parts of Lilongwe, minister responsible Vitumbiko Mumba said he had observed that there was a big presence of foreign traders outside the city.
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With the current review of the Business Licencing Act, the minister ordered that the issue should be incorporated into the new act.
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“I am shocked that we have too many foreigners doing retail businesses, even in residential areas. We need to restrict that.
“Luckily, we are reviewing the Business Licencing Act and will make sure there is a clause that bars any foreigner from doing such trading in those areas,” Mumba said at a recent banana conference in Lilongwe.
The minister has been advocating for local ownership of the economy to ensure inclusive economic development and limited foreign interests in certain industries, including primary and strategic production.
In an interview, National Association of Small and Medium Enterprises President William Mwale said there had been laxity for a long time in making sure that economic empowerment fruits trickle down to Malawians.However, he drew hope from the recently introduced SMEs Act, which, he said, provides a legal framework that supports and protects small enterprises unlike before.
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He rued lack of protectionism on businesses, saying countries with large SMEs sectors have thrived on such restrictions.
“It is mainly because there wasn’t an MSMEs Policy all along but since the bill was passed and assented to, we believe restrictions on what businesses should be for indigenous Malawians will be easier.
“We have advocated for the creation of a fully-fledged Ministry of MSMEs, which would help to separate and structure the SME sector and have its own development strategies,” Mwale said.
The retail and wholesale sector relies heavily on imports from major trading partners, expanding and presenting an opportunity for investors.
United States trade agency International Trade Association says sectoral credit data show that the sector is the second largest destination for private sector credit.
It further says Malawi’s growing population, emerging middle class and rapid urbanisation present a readily available workforce and consumer base.
