The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has said there is need to introduce new incentives if the country is to make strides in its diversification drive.
In an interview on Tuesday, MCCCI chief executive officer Chancellor Kaferapanjira said introducing incentives and consulting stakeholders before implementing government policies would help encourage diversification.
He said: “If we are failing to do well with what we are doing now, what do you expect somebody else to do? Government has the responsibility to incentivise areas that have been ‘no go’ areas before by encouraging industries to do something and one of the most important incentive is power because the best we can do is to go into manufacturing and this in not happening.
“Even in agriculture, with the way government applies policies, you don’t know what policies are going to be implemented, For example, the way the export ban was effected without justification and consultation with concerned stakeholders brings a lot of uncertainty to the economy.”
MCCCI’s views follow study findings on the country’s diversification, which indicates that crop diversification has deteriorated nationally in different Agricultural Development Divisions (ADDs), although beneficiaries of the widely-implemented Farm Input Subsidy Programme (Fisp) have become more diversified with crop diversification varying across agro-ecological zones.
According to a study by Henry Kankwamba, Mariam Kadzamira and Karl Pauw titled How Diversified is Cropping in Malawi? Patterns, Determinants and Policy Implications, data from the 2004/05 and 2010/11 cropping season show that crop diversification has deteriorated.
Reads the study in part: “This is bad news to the economy as well as livelihoods. While the country’s main export earner tobacco continues registering reduced earnings and production, crop diversification could have been engaged with an extra gear.”
Figures from the second round of tobacco estimates have shown a 12 percent drop to 149 million kilogrammes (kg) against buyers’ demand at 171 million kg due to prolonged dry spells in the Southern Region and erratic rainfall in the Central and Northern regions in February and March.
Government’s desire to increase production of pigeon peas as part of its diversification strategy to supplement foreign exchange earnings is facing glitches as there is no deal in sight, six months after the Indian Government imposed an import cap on the country’s commodity.
Secretary to the Treasury Ben Botolo is on record as having said that government is currently focusing and encouraging diversification of foreign exchange earnings.
Agricultural products continue to dominate Malawi’s export basket, accounting for about 80 percent of exports, according to the National Statistical Office (NSO).
This makes the vulnerable to external shocks.