South Sudan exports deal awaits payment, logistics
Second phase of the much-touted South Sudan exports deal awaits payment for first consignment of commodities delivered to the country by local traders last year and a resolution on logistical challenges identified, the Malawi Investment and Trade Centre (MITC) has said.
This is coming at a time Malawi is desperate for forex as reserves remain depleted.
In 2021, the government, through the Ministry of Trade and Industry, signed a Memorandum of Understanding with the government of South Sudan for trade and economic cooperation that would see Lilongwe exporting goods worth over $285 million (about K294.4 billion) until 2026.
Available figures show that Malawi realised around $1.3 million (about K1.3 billion) from the 1,500 metric tonnes of maize flour and 400 tonnes of rice it exported under the deal last season.
But in a response to an emailed questionnaire on Thursday, MITC Chief Executive Officer Paul Kwengwere said Malawi has received a new order to export white maize flour instead of cream of maize exported at the initial batch.
“It should be emphasised that the the export deal to South Sudan is for a five years period. Malawi is addressing supply side, financing, logistical, quality and standards issues that emerged during the initial trial run exports.
“Non-tariff barriers were observed in the initial trial run such as competitors on the market spreading fake news about quality of Malawi maize flour, there is delayed payment of proceeds of the trial run, Scarcity of forex in Malawi affected timely payment of fuels which is crucial for the movement of goods to South Sudan and high transportation rates to South Sudan,” Kwengwere said.
He said in the meantime, MITC has facilitated setting up of a warehouse in South Sudan by a Malawian firm worth $68.1 million (about K70.3 billion).
Kwengwere added that MITC is working with the South Sudan National Chamber of Commerce, Industry and Agriculture in identifying alternative buyers of Malawi products.
Malawi Union of Small and Medium Enterprises President Barbra Banda said local businesses are mobilising themselves to take advantage of the market in the next batch.
“We are working together with the government to make sure that we seize the opportunity in South Sudan as much as possible,” Banda said.
