Government gears up for US opportunities
The government has said it is geared to take up opportunities that have been provided by the United States government.
President Barack Obama announced a $37 billion investment in Africa package in sectors including infrastructure, electricity, public health, and security, at the end of the premier US-Africa Leaders’ Summit held in Washington DC, United States of America from August 4-6 2014.
Obama also announced that the African Growth Opportunity Act (Agoa) which provides trade preferences and duty-free entry into the US for certain goods for some sub-Sahara Africa which was signed into law in May 2000, will be renewed with more products.
Reacting to the news in an interview yesterday, Ministry of Industry and Trade spokesperson Wiskes Nkombezi welcomed the development pointing out that this is what the government has been lobbying for.
“All along we wanted the tariff lines under Agoa to be expanded because most countries were not able to export more goods to the US due to the limited tariff lines. Due to this development we will go into overdrive in the implementation of our Agoa strategy,” said Nkombezi.
Analyst have often said Malawi can do more to fully utilise trade opportunities that are available to the country including Agoa.
Specifically, Malawi exports to the US under Agoa have generally been declining with analysts blaming supply side constraints and standards.
According to data provided by the Agoa portal, in 2011 Malawi exported goods valued at $56.2 million, $46.3 million in 2012, and $47.1 million in 2013.
According to the data between January and June Malawi exported goods valued at about $9.5 million compared to $10.7 million exported during the same period last year.
Malawi’s exports to the US under Agoa are dominated by agriculture products and textile and apparel.
Comparatively, in 2013 neigbouring Mozambique exported $1.4 million worth of goods while Zambia’s outbound goods stood at $8 000 under Agoa although our neighbours exported goods valued at $4.3 million under the Generalised System of Preferences (GSP)—another preferential access window into the US market. Tanzania exported $10.4 million last year under Agoa.
To increase exports and diversify the economy, in 2012 the government launched the National Export Strategy (NES) which provides a road map for developing Malawi’s productive base to allow for both export competitiveness and economic empowerment.
The Malawi Bureau of Standards (MBS) recently launched the Standardisation, Quality Assurance Accreditation and Metrology (Sqam) project which is intended to improve the quality of local products.
According to the statement, President Obama pledged to support continental integration initiatives, while contributing to building capacity to facilitate intra-continental trade.
