Malawi calm as Free Trade Area comes into effect

Post was last updated: May 31, 2019

By Peter Kanjere:

NDALA— There were fears

As the African Continental Free Trade Agreement (AfCFTA) came into effect Thursday, Industry, Trade and Tourism Ministry has assured that it was doing groundwork so that it makes an informed decision before signing the agreement.

Some 24 out of Africa’s 54 member countries have ratified the agreement which requires them to remove tariffs on 90 percent of goods, thereby allowing free access to goods and services across the continent.

However, much as agreement has its benefits to members, Malawi needs to look as its flipside and sign the agreement after consultations, the ministry’s secretary, Ken Ndala, Thursday said.

“We wanted to have input from the private sector. We have to tread carefully as there might be disadvantages. We have to look at issues of exports and imports as we still have an export deficit and, if we are to open it, it might not favour us. We have to be able to increase production with regards to quality,” Ndala said.

Malawi has a huge trade deficit due to the landlocked nature of the country, which makes exporting and importing of goods and services costly.

Tobacco remains the country’s principal forex earner but the cash crop is on the wane on the market due to global anti-tobacco smoking lobbies and declining prices on the world market.

Malawi’s economy is agriculture-based.

The continental agreement is expected to improve intra trade on the continent by 52 percent in 2022, according to the United Nations Economic Commission for Africa.

However, Africa’s biggest economy, Nigeria, is yet to sign the agreement, with Burkina Faso signing the deal on Wednesday.

When the agreement came into effect, The African Union’s Commissioner for Trade and Industry, Albert Muchanga, celebrated the news on Twitter.

“Historic milestone! #AfCFTA Agreement has today come into force. We celebrate the triumph of bold, pragmatic & continent-wide commitment 2 economic integration. We launch market on 7 July 2019 & begin the journey of transformation 2 secure inclusive prosperity,” Muchanga tweeted.

Let us know what you think of this update and remember to add us on our facebook and follow us on our twitter. Make sure to come back daily for more Malawi business news updates.

Quick Links: Malawi Banking News | Malawi Technology News | Download Business eBooks | Ten Signs You Are An Entrepreneur | What is a Managing Director?

Today’s top business story: Top Commercial Banks In Malawi

Source link