Key Business Points
- Aid for trade is uncertain: The International Trade Centre notes that aid for trade cannot be effective due to unclear official development assistance (ODA) decisions, affecting Malawi’s business community.
- Trade restrictions on the rise: Over 150 restrictive trade measures have been implemented globally, making it challenging for local businesses to compete, with AfCFTA offering a potential solution.
- AfCFTA offers economic gains: The African Continental Free Trade Area agreement could increase intra-African trade by $22 billion by 2029, providing investment opportunities for Malawian businesses.
The International Trade Centre has raised concerns over the effectiveness of aid for trade due to uncertain official development assistance (ODA) decisions. According to the centre’s executive director, Pamela Coke-Hamilton, ODA cuts announced in 2025 could result in a 9-17% drop from last year’s levels. This uncertainty affects Malawi’s business community, which relies on trade to drive economic growth. As Coke-Hamilton noted, "The field of international development has been turned upside down," making it essential for businesses to explore alternative trade agreements like the African Continental Free Trade Area (AfCFTA).
The AfCFTA has the potential to boost intra-African trade by $22 billion by 2029, offering immense economic gains for Malawian businesses. The agreement includes protocols on critical issues like women and youth, intellectual property, and the digital economy, making it an attractive option for local entrepreneurs. As Daisy Kambalame, CEO of the Malawi Confederation of Chambers of Commerce and Industry (MCCCI), pointed out, however, the lack of information is slowing the uptake of the AfCFTA pilot initiative, and challenges facing the business sector could make Malawian goods and services uncompetitive.
The Ministry of Trade and Industry is encouraging local firms to utilize the AfCFTA Guided Trade Initiative (GTI), which aims to accelerate trading and test the operational environment under the AfCFTA. The ministry, along with the AfCFTA secretariat, will provide export guidance to businesses once they are ready. This initiative is crucial for Malawian businesses to take advantage of the AfCFTA’s potential and increase their competitiveness in the regional market. As Patrick Botha, spokesperson for the Ministry of Industry and Trade, noted, the GTI will help businesses navigate the AfCFTA’s requirements and opportunities.
The AfCFTA is a trade pact that creates a harmonized and integrated continental market of 1.2 billion people in 55 countries, with a combined gross domestic product valued at $3.4 trillion. The Malawi Government recognizes the AfCFTA as an opportunity to achieve its goal of expanding and diversifying export products and services at regional and global levels under the National Export Strategy II. As Malawian businesses explore the AfCFTA’s opportunities, they can leverage the agreement to increase their exports and competitiveness, ultimately driving economic growth and development in the country. With the MCCCI and the Ministry of Trade and Industry providing support and guidance, local entrepreneurs can navigate the AfCFTA’s requirements and tap into the vast market opportunities available.
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