Cross-border trade expensive in Malawi
Conducting cross-border transactions still remains expensive for small-scale traders in Malawi and its neighbouring Zambia, the World Bank said on Thursday.
The bank made the observation at Protea Hotel Chipata in Zambia where small traders from Malawi and Zambia held a joint workshop to discuss a concrete action plan for trade policy reform for promoting trade and creating jobs in the two countries. It was facilitated by the World Bank.
Principal Secretary in the Ministry of Industry and Trade Alex Gomani led the Malawi delegation.
According to the World Bank revelation, cross-border transactions are costing small-scale traders 62 percent more in border costs than large formal businesses.
“While there are systems in place to facilitate cross-border trade such as the current Simplified Trade Regime [STR] which eases several customs processes, there are a host of registration and other requirements that remain in place which increase traders’ costs,” said World Bank’s Country Director for Zambia, Malawi and Zimbabwe, Kundhavi Kadiresan.
She however, said informal traders are a major feature of the Malawi and Zambian economic and social landscapes.
According to Kadiresan, a significant amount of cross-border trade between Malawi and Zambia and their neighbours is taking place through informal channels.
She said such trade is playing an important role in promoting welfare , poverty reduction and trading of goods and services.
“The World Bank is pioneering efforts to engage in cross-border action between Zambia and Malawi to tackle key issues such as informal trade and non-tariff barriers that will support economic development,” she said.
In his remarks, Gomani explained that Malawi views STR as very crucial to the removal of impediments affecting cross-border traders.
Gomani said there is enough evidence that a lot of work still needs to be done to fast track trade through borders by perfecting operations of STR.
During the meeting, local traders, business leaders from both Malawi and Zambia suggested the need to reform the simplified trade regime, supported the proposed trade charter and outlined challenges and risks traders face when crossing borders.
