Ministry of Industry Trade and Tourism says it has shifted focus to promote exports of non-traditional products to diversify the export basket to narrow the wide trade deficit.
The ministry assistance director of trade Diamond Chikhasu said on Wednesday in Lilongwe this will be achieved by working with small businesses under National Small and Medium Enterprises (Nasme) to empower them with capital and skills to add value to their products on demand abroad.
He said government is looking at value-added products such legumes, minerals, precious stones, arts and crafts and textiles.
Chikhasu acknowledged that the country has relied too much on traditional exports such as tobacco, sugar and tea, most of which are exported in their raw form and fetch low prices on the global market.
“We want to widen the export base by including non-traditional products which in most cases are produced by the small business. We are focusing our energies to empower small businesses as they face many challenges such as access to finance. We are working to promote and link them to financiers.
“At government level, we are working at initiatives that support their operations by providing matching grants where government through the Agriculture Commercialisation Project will be able to support the willing SMEs with 50 percent of working capital to enhance their operations,” he said on the sidelines of SMEs export trade capacity building training in Lilongwe.
Nasme human resources and development coordinator Endrina Maxwell said their members are already exporting products but face capacity challenges.
“Most of the times when we are exporting, we meet challenges on quality and different tariffs that we do not anticipate, so the ministry is helping us a lot on these issues.
“For starters, government through our organisation has identified 30 SMEs that are into export business to capacitate them to grow into big entities in export business,” she said .
One of the small business operators based in Kasungu, Julius Kamanga, said he is geared up for the export business.
National Working Group on Trade Policy chairperson Frederick Changaya in an earlier interview said with no multiplier effect in Malawi and a heavily subsidised manufacturing of food products in other countries, the country needs to revisit its trade policies.
He said for policies to work effectively, there is need to focus on industrialisation to grow incomes for all, observing that no country has grown while focusing on agriculture alone even when it is mechanised.
A 2018 Malawi Government Annual Economic Report shows that in 2017, Malawi’s total exports were valued at K847 billion against imports valued at K1.7 trillion, leaving a gap of K920 billion.
Trade analysts also blame the country’s poor showing on exports performance on failure to utilise various market preferences offered under different trade agreements such as the European Union Everything But Arms initiative, Cotonou Agreement and its successor Economic Partnership Agreement, the United States’ African Growth and Opportunity Act.