The Ministry of Trade has embarked on an initiative to link small scale manufacturers with the Malawi Bureau of Standards (MBS), Lilongwe University of Agriculture and Natural Resources (Luanar) and the Project Innovation Center (PIC) to bolster local production and enhance import substitution.
This follows revelations that a majority of cooperatives in the manufacturing sector have gone under due to lack of adequate capital to operate machinery on full scale, lack of utilities such as electricity and portable water, and lack of proper training on machinery use.
This is contained in a machine verification exercise report conducted by the Ministry which indicates that there are 245 machineries across the country out of which 85 are operational representing a 35 percent rate of operational machines across the country.
The report further indicates that lack of business management training on how the groups can raise capital on its on to sustain machine usage and failure to meet MBS product certification has contributed to failure of cooperatives to venture into manufacturing.
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In an interview, Director of Small and Medium Enterprises (SMEs), Cooperatives and Value Addition in the Ministry of Trade Limbikani Kachiwaya said they are looking at ensuring that production is well linked to a market to ensure sustainability.
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“We want to link groups with commercially oriented entrepreneurs on contractual basis where the entrepreneurs pay for the use of the machinery and make availability of electricity and water a condition for provision of value adding equipment.
“While considering the size of the machinery and group capacity in terms of financial requirements to operate and need of skilled labour, we also have a good working relationship with counterparts at the Lilongwe University of Agriculture and Natural Resources and Project Innovation Centre (PIC) who will help in training the cooperatives,” Kachiwaya said.
In an earlier interview, PIC Director Kondwani Kachamba Ngwira said the firm’s main role would be to train small and medium enterprises in cooking oil production, processing, and product certification.
Kachamba said the second role would be to mobilise the SMEs into groups which eventually form cooperatives.
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It is expected that over 300,000 farmers will benefit from the project.
Efforts to rejuvenate the small-scale manufacturing sector have been futile witnessed by continued balance of payment woes with a current trade deficit of $2.18 billion, a volatile exchange rate and foreign exchange shortages.
