Three months after Malawi and Tanzania pledged to finalise a Simplified Trade Regime (STR) agreement to enhance cross-border trade, the pact remains unsigned, raising concerns over long-term trade policy stability, it has emerged.
The STR was meant to cement a fragile diplomatic truce following a brief but disruptive trade spat in early this year.
In a brief interview yesterday, Ministry of Trade and Industry spokesperson Patrick Botha said: “Negotiations are still underway. We are awaiting conclusion and signing just like we did with Mozambique.”
Despite not signing the agreement, trade activity between the two countries in ongoing, according to Cross-border Traders Association of Malawi chairperson Yohane Simon.
“Trade has been going smoothly in the past two months. We have a solid trade relationship,” he said.
In March, Minister of Industry and Trade Vitumbiko Mumba announced a ban on imports of agricultural goods such as maize, rice, flour, bananas and ginger to protect local producers and preserve foreign reserves.
Tanzania responded with a retaliatory ban on Malawian imports and halted fertiliser exports while suspending the transit of goods through its ports, a critical artery for Malawi’s foreign trade.
The two countries reached a ministerial understanding in late April and lifted their respective bans and agreed to finalise and implement the STR by May 30 to streamline customs procedures and safeguard small-scale traders from future shocks.
However, the agreement has not been signed, raising concerns about Malawi’s preparedness to institutionalise trade cooperation.
This return to normalcy offers some reassurance, but observers warn the current calm masks deeper vulnerabilities.
According to the World Bank’s July 2025 Malawi Economic Monitor, the episode exposed systemic weaknesses in Malawi’s trade governance.
“Informal cross-border traders, most of them women, suffered income losses of up to 60 percent, while trucks carrying perishables were stranded at key border points,” reads the World Bank report in part.
The unfinished STR leaves Malawi exposed to future diplomatic and logistical shocks, according to experts.
This means that with no binding framework to manage customs disputes or fast-track small-scale trader support, trade facilitation efforts remain ad hoc, thereby undermining long-term investor confidence and complicates Malawi’s ambition to deepen its role in regional markets.
The World Bank cautions that erratic trade policies, particularly bans imposed without notice, reinforce a pattern of unpredictability that fuels informal trade and discourages formal sector growth.
Lessons from Nigeria’s own import restriction saga show that while protectionist measures may seem pragmatic, they often backfire by stoking inflation and undermining regional goodwill.
