Players in the manufacturing sector have asked government to revisit the 30 percent exports proceeds surrender requirement which authorities introduced as a way of attracting foreign exchange into the official system.
Currently, exporters are required to surrender 30 percent of their foreign exchange earnings from exports to government through the Reserve Bank of Malawi (RBM).
Speaking in an interview, Malawi Confederation of Chambers of Commerce and Industry (MCCCI) Manufacturing Committee Chairperson Godwin Ng’oma said the amount which gets committed is high.
He added that exporters also feel that doing business in Malawi at the moment is a challenge because foreign exchange is scarce.
“We are encouraging government to look into
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this because we need to find better ways in which we can source forex and still be able to encourage exports,” Ng’oma said.
One of the manufacturers who spoke in liaison with many others, Bakhresa, said the 30 percent exports proceeds surrender regime is not beneficial to manufacturers.
Bakhresa Head of Human Resources Richard Tchereko said the regime robes exporters of the chance to use resources generated and is a recipe for manufacturers to opt for the informal export channels.
“The regime should be revisited and removed to encourage exports of made-in-Malawi products; if not, then there must be exemption to companies that are generating their own foreign exchange through formal exports with a strategic aim to finance their imports for production by hedging themselves from foreign exchange volatility,” Tchereko said.
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Responding to the manufacturers, Minister of Trade and Industry Sosten Gwengwe said he understands the manufacturers’ complaints and that that is why they engaged them.
He said the regime came to make sure that exports proceeds are channeled towards the formal market and that if manufacturers can do more exports, he can engage stakeholders on the law.
“Now the foreign exchange environment is coming to normalcy but we will need the private sector to intensify exports so that the country has more foreign exchange and we reap from current efforts,” Gwengwe said.
Malawi is a predominantly consuming and importing nation, highly dependent on exporting raw agricultural commodities such as tobacco.
