Cheap imports hurts Malawi economy
Malawi Government, through the Ministry of Industry and Trade, has admitted that the flooding of cheap imports from other countries, especially South East Asia is posing as a threat to the domestic economy.
But the ministry has said it is a challenge for the country to restrain the importation of cheap goods, saying exporting countries do so within the realm of normal international trade.
Ministry of Industry and Trade spokesperson Wiskes Nkombezi said in an exclusive interview on Saturday that most consumers are opting for cheap goods from other countries because similar locally produced goods are expensive on the market.
“We are aware that cheap imports are flooding the country and this is an issue to us government because it affects the country’s trade balance and it’s an issue to both government and the private sector since it [the flooding of cheap imports] affects their profitability. It is a tricky issue,” said Nkombezi.
He was reacting to a Business News inquiry on the magnitude of cheap imports from other countries at the moment and how it is impacting on the economy.
Local economic commentators have in the past complained about the influx of expired or close to expired products from global retailers saying such a situation has rendered the country a dumping ground for finished products from other countries such as China.
Trade experts have also lamented in recent separate interviews with Business News that the importation of cheap, counterfeit and sub-standard products from other countries is threatening the viability of local companies and the manufacturing sector in general.
But Nkombezi said most African countries are also being hurt by the importation of cheap goods from other countries in East Asia and from the west and said there was an urgent need for a lasting solution before the whole continent becomes a dumping ground for finished products.
“This is why Malawi and other countries in Africa have safeguarding measures in terms of procedures such that when you persistently see some products are threatening local production, you bang heads and regulate the inflow of such products,” added Nkombezi.
He also complained that the Common Market for Eastern and Southern Africa (Comesa) have had little progress in absorbing technology than other counties in Asia such that products within the region are deemed expensive than those from Asia where cost of production is relatively lower due to improved technology.
Meanwhile, the Comesa and the Comesa Business Council will convene at the 9th Comesa Business Partnerships Forum and Linkages Fair in the Democratic Republic of Congo from February 21 to 22 next year to address issues affecting the manufacturing industry in the continent.
The forum provides a platform for discussion and public private dialogue to proffer solutions on protecting African products against counterfeit and parallel imports said a statement from Comesa.
Earlier this year, The Sunday News of Zimbabwe quoted Comesa secretary general Sindiso Ngwenya as saying countries in the trading bloc were unnecessarily importing goods at the expense of the local industry.
He cited an example in the shoe industry were more than $500 million dollars worth of shoes were imported into the region in 2010.
