Groups proposed imports licensing
Faced with imports that outstrip exports, the Economic Empowerment Action Group (Eeag) has called for the introduction of import licences to curb imports that threaten the industry and put pressure on the kwacha.
The country suffers an unfavourable trade imbalance with imports, including bottled water, toothpicks, vegetables and maize flour, which is largely blamed for the continued depreciation of the kwacha.
Due to the huge import bill which is pegged at $188.1 million per month, according to the Reserve Bank of Malawi( RBM), this year, the kwacha depreciated against major trading currencies to bottom in April, stabilised between June and August before depreciating again by over 30 percent and is now trading at around K450 against the dollar.
Eeag president Lewis Chiwalo, speaking in an interview, suggested that Malawi needs to introduce import licences on certain products.
He also blamed Malawians for their wrong attitude towards local products regardless of their quality and price.
“We import almost each and everything putting pressure on the kwacha exchange rate and that affects how we perform on the international market. Most Malawians believe that imported goods are better than locally produced goods regardless of quality,” said Chiwalo.
Recently, Zimbabwe announced that it will from next year regulate imports by issuing licences to businesses and individuals as reported by the country’s The Sunday Mail.
The Sunday Mail noted that soaring imports continue to threaten the revival and viability of the manufacturing industry which is operating below 40 percent capacity.
But Ministry of Industry and Trade spokesperson Wiskes Nkombezi, in an interview yesterday said Malawi already has an import licencing trade regime on particular products.
“The objective of import licencing is not to reduce imports. Importers already require licences to import certain products including poultry, fire arms and maize. Some imports are important inputs in the production of goods and services,” said Nkombezi.
He said there are some achievements in the ‘Buy Malawi Campaign’ which the Malawi Government is implementing and cited the signing of a memorandum of understanding (MoU) between the government and local pharmaceutical companies.
Under the MoU, the government has committed to buy certain medical supplies locally while the companies are required to meet certain quality standards.
But both Chiwalo and Nkombezi agree that buying local products require a change of mindset, a thing that the country needs to work on.
In 2012, Malawi’s top imports from China, one of the country’s major trading partners, included furniture and textiles which ironically are also produced locally. n
