Malawi aligns tariffs to Sadc
Malawi has progressively phased down her tariffs to align itself with the Southern Africa Development Community (Sadc), a government annual economic report has indicated.
Malawi, according to the report, has reached a 100 percent level with all Sadc members except South Africa.
Ministry of Industry and Trade has since stated that it will continue treading carefully in phasing down tariffs in order to avoid creating unnecessary shocks to the economy.
“Under Sadc, Malawi has been phasing down her tariffs with Sadc region progressively. Malawi reached 100 percent with all Sadc member States whereas with South Africa, the phase-down is at 86 percent,” reads the economic report.
The phase-down is in tandem with the Sadc Trade Protocol aimed at creating a Free Trade Area (FTA) which was achieved in 2008 and it envisages the establishment of a Customs Union in the near future.
According to the report, Malawi will continue to adopt instruments that will facilitate the implementation of deeper regional integration with a view to encourage intra-regional trade for the benefit of the regional economies.
The aligning of Malawi’s tariff structure to Sadc comes at a time when Sadc, Comesa and the Eastern Africa Community (EAC) are in the process of establishing a Tripartite FTA covering the three regional economic communities (Recs).
The trade arrangement proposes, among others, zero trade tariffs and no quotas amongst the member countries.
Ministry of Industry and Trade spokesperson Wiskes Nkombezi told Business News on Friday that the overall idea behind the phasing down of tariff structure with Sadc is to create a ‘trade enabling’ environment.
Said Nkombezi: “When we talk of liberalisation, we want our traders not to be charged when they go outside and likewise foreign traders not to be charged when they come here. We want it to be reciprocal.”
Finance Minister Ken Lipenga said when he presented the 2013/14 national budget that in the last fiscal year Malawi was able to reduce and align its tariffs in line with the commitments made under the Sadc tariff phase down.
Lipenga said the phase-down in the tariffs came about after a long period of stagnation amid the economic challenges that were being experienced.
“Although the country is operating under a tight fiscal regime, Malawi remains committed to implementing the obligations agreed under the Comesa and Sadc integration agenda respectively,” he said.
Currently, Malawi benefits from a number of bilateral and multilateral agreements. The country is a member of the African Caribbean and Pacific (ACP) group, the Common Market for Eastern and Southern Africa (Comesa), the Sadc and is party to the EAC-Comesa-Sadc tripartite FTA negotiations.
The country is also a member of the World Trade Organisation (WTO) and is eligible to trade under the US-Africa Growth and Opportunity Act (Agoa).
But trade experts contend that Malawi’s membership of Sadc and Comesa play a key role in trade, with three of Malawi’s key trade partners being South Africa, Egypt and Zambia.
