Small and medium enterprises (SMEs) are struggling to cash in on the temporary ban on some imports due to capacity challenges and lack of cheaper financing, Business Review has established.
But Minister of Trade and Industry Vitumbiko Mumba remains optimistic that the fruits of the policy interventions will manifest in the long-term.
In an interview on Tuesday, he said while a month and a week is too short to assess progress, Shoprite and other superstores have contracted Malawian farmers to be supplying them with fruits and vegetables.
On capacity challenges, Mumba said it is mainly a consistency issue and not necessarily capabilities, standards and quality.
He said: “Many who were citing lack of market are now happy that there is light at the end of the tunnel. We need to protect and promote our farmers.
“It’s an issue that we must accept will take some time, but most have started working on that. We have to start from somewhere and soon all this will be of the past.”
But Chamber for Small and Medium Enterprises executive secretary James Chiutsi, in an interview on Tuesday, observed that while it may take time for small businesses to start benefiting, capacity challenges could delay its full implementation.
He said: “The import ban is necessary as it will help develop the SME sector. However, the opportunity came when we were not ready that it will open in March, as majority of the crops listed in the import ban takes six months to mature.
“We need a full-fledged secretariat for the Malawi Union of SMEs, speedy construction of factory shells where SMEs can operate fromas well as marketing and packaging skills and also easily accessible and cheaper sources of finance.”
In a Malawi Government Gazette supplement dated March 13 2025, Mumba announced a two-year import ban on maize flour, fresh milk, rice and fruits, except those that do not grow in Malawi, peanut butter, honey, popcorn, toothpicks, matches, tomatoes, Irish potatoes and bottled water, among others.
Under the World Trade Organisation (WTO) Agreement on Safeguards, members States may impose temporary import restrictions to protect domestic industries from serious injury caused by surging imports.
WTO General Agreement on Tariffs and Trade permits import restrictions to safeguard a member’s balance of payments position and further allows developing countries to apply import restrictions to support the establishment or maintenance of industries in line with their development needs.
Article 19 of the African Continental Free Trade Area Protocol on Trade in Goods allows State parties to apply temporary measures to protect domestic industries from injury caused by increased imports whereas Article 20 of the Southern African Development Community Protocol on Trade provides for safeguard measures in situations where increased imports cause or threaten to cause serious injury to a domestic industry.
On the other hand, Article 49(1)(a) of the Common Market for Eastern and Southern Africa Treaty permits member States to introduce trade restrictions in response to serious balance of payments difficulties while Article 61 of the treaty also allows for temporary derogations through emergency and safeguard measures in cases of unforeseen economic difficulties, including import surges that threaten domestic production or external financial stability.
However, following the announcement, Zambia, Common Market for East and Southern Africa and African Union ambassadors sought clarity from the Malawi Government on the same while Tanzania announced reciprocal ban on agricultural commodities on Malawi, including fertiliser.
Previously, Tanzania had imposed import bans on chicken, which led to shortage of broilers and layers as some firms stopped producing day-old chicks due to high import taxes, sugar with permits issued to non-sugar producing firms to bridge the gap.
In 2017, Zambia also banned the importation of vegetables and fruit, a decision that was letter reversed.
Published Reserve Bank of Malawi data shows that the economy is still struggling to cut trade gap with trade balance worsened to $261.1 million (about K457 billion) in February this year from $206.8 million (about K362 billion) in January.
