Government restricts agri-commodity exports - The Times Group Malawi

Government restricts agri-commodity exports

Post was last updated: July 23, 2020

In a quest to protect subsistence farmers from exploitation and easily aggregate volumes exported and value earned from agriculture commodities, the government has restricted importation and exportation of such commodities.

In a statement seen by The Business Times, Ministry of Trade has notified the business community of the development.

It further announces the operationalisation of the Control of Goods Act (Coga) effective July 10, 2020.

“Accompanying regulations providing detailed list of restricted and prohibited goods will be published within seven days.

“Therefore, in order to import or export any goods covered under this Act, a trader is required to obtain an import or export license from the Ministry of Trade,” reads the statement in part.

In an interview Minister Trade, Sosten Gwengwe, said the aim is to enhance use of structured markets for agriculture commodities.

He said previously about K30 billion was lost annually through illicit trade from oil seed commodities only.

“We want to be able to know who is sending what to where and empower more Malawians to participate in exporting such commodities than the current situation where it is dominated by foreign nationals who do not declare the proceeds back home,” Gwengwe said.

Farmers Union of Malawi Director of Programme Development, Jacob Nyirongo, rated the move as good, saying control of goods act has finally been gazetted.

“This will bring predictability and transparency in the control of imports and exports especially for agriculture commodities as the government will have to consult all key stakeholders before a restriction is implemented,” Nyirongo said.

Chairperson of the National Association of Small and Medium Enterprises (Nasme), William Mwale, welcome the step taken.

He, however, said the government should consider suggestions presented by stakeholders during consultations on the matter.

Malawi remains an agrarian economy, with about 80 percent of the population living in rural areas.

Maize and tobacco are, respectively, Malawi’s staple and top export crops, followed by tea, sugar, cotton, rice and pulses, as major cash crops.

As part of the food component, traditionally maize heavily impacts the country’s economy, given that it constitutes 45.2 percent in the consumer price index-an aggregate basket of goods and services for computing inflation.

Input of the sector to the national economy has skewed in recent years.

In the 2004 Malawi Economic Growth Strategy, agriculture was stated to account for 39 percent of GDP, 85 percent of the labour force and 83 percent of foreign exchange earnings.

In 2010, the Malawi Confederation of Chambers of Commerce stated that the sector contributed about 33.6 percent to the economic growth.

In 2017, agriculture accounted for about one-third of GDP and about 80 percent of export revenue.

Agriculture sector’s contribution to GDP was expected to shrink by 0.2 percentage points in 2019 from 27.3 percent to 27.1 percent according to National Account figures from the Reserve Bank of Malawi.

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