Malawi and Mozambique have signed a landmark bilateral agreement to simplify cross-border trade under the Southern African Development Community (Sadc) Trade Protocol.
Minister of Trade and Industry Sosten Gwengwe and his Mozambican counterpart Silvino Augusto Jose Moreno signed the Simplified Trade Regime (STR) agreement in Lilongwe on Friday at a function that brought together government and trade officials from the two countries.
Malawi already has similar STR agreements with neighbouring Zambia and Zimbabwe through the Common Market for Eastern and Southern Africa (Comesa), but this new agreement sets a fresh benchmark in the Sadc framework.
In his remarks, Gwengwe said the STR aims to create new employment and trade opportunities by making it easier for small-scale traders to do business across borders.
He said simplifying the trading process is crucial to unlock economic potential for both Malawi and Mozambique.
However, Gwengwe cautioned against potential challenges that may arise even after the agreement is in place.
“Usually, when these agreements are signed, there are still some people who try to abuse cross-border traders by creating barriers,” he said, emphasising the need for close monitoring of the agreement’s implementation.
To ensure its success, Gwengwe urged representatives from the two countries to closely monitor the progress of cross-border trade within three months.
On his part, Jose Moreno said improving the business environment between the two countries will be key to reinforcing competitive and strategic cooperation within the Sadc region and the wider African continent.
“We are convinced that the STR framework we have formalised represents the foundation that will support and drive small-scale cross-border traders,” he said.
The Malawi-Mozambique STR is expected to benefit thousands of traders who have long faced bureaucratic hurdles, high costs and delays in moving goods between the two countries.
The STR will allow cross-border traders to import goods worth up to $3 000 (about K5 million)duty-free, provided the goods originate or were manufactured in Sadc member States.
An analysis of trade data from the Observatory of Economic Complexity between Malawi and Mozambique shows that Malawi’s exports to its neighbour have experienced a steady decline over the past five years while Mozambique has seen a gradual increase in its shipments to Malawi.
The data further shows that Malawi’s exports to Mozambique totalled $17.8 million (about K31 billion) in 2022, down from $27.3 million (about K48 billion) in 2017.
The exports included soya bean meal, corn and animal food.
In contrast, Mozambique’s exports to Malawi rose from $41.7 million (about K73 billion) in 2017 to $44.7 million (about K78 billion) in 2022.
