Malawi could do away with perennial shortages of foreign exchange during the lean period if it intensifies production and export of legumes to the Asian markets, AHL Commodities Exchange (AHCX) officials have said.
Malawi’s export base rests on a few commodities, with tobacco—currently under worldwide anti-smoking campaign—bringing in a lion’s share of foreign exchange.
Officials at AHCX—a modern marketplace for agricultural commodities—say there is untapped potential for legumes market in India, the second most populous country in the world with 1.3 billion people.
Figures show that India is projected to be the world’s most populous country by 2022, surpassing China. This means there is a huge market for legumes which Malawi can take advantage of.
AHCX general manager Davis Manyenje said on Saturday in Lilongwe that Malawi can kiss foreign exchange shortages goodbye with exports of legumes.
He said: “Currently, there seems to be no emphasis to support legumes production. Despite the National Export Strategy [NES] talking about production of legumes, there are no support structures in place.
“If we intensify production of legumes, Malawi can as well forget about donors and rely on its own foreign exchange generated from legumes exports.”
Manyenje, who was speaking at the training of business journalists in Lilongwe, said quantities of legumes exported are not accounted and do not show in the country’s financial system because they do not go through the structured market such as AHCX.
He said AHCX is transparent, efficient and brings in integrity in the country’s commodities market which has a consolidated value of $9 billion (K6.5 trillion), about five times the 2016/17 National Budget.
During the training workshop, officials from AHCX, among others, outlined the role of the structured market in diversification against stiff opposition of tobacco on the international market.
A number of countries in Africa are setting up commodity exchanges to develop agricultural market and improve food security.
For instance, in east African economies such as Kenya and Ethiopia, they have similar markets.
According to Forbes, when Ethiopia set up its own commodity exchange in 2008, few foresaw the ripple effects it would generate, but in five years, the exchange is a boon for the country’s economy. n