Malawi and South Sudan on Thursday signed a trade agreement that will see Lilongwe exporting its surplus food to Juba to help ease a widening deficit of cereals in Africa’s youngest nation.
The two countries officially signed a memorandum of understanding (MoU) in Juba that allows Malawi to export to South Sudan products such as maize, maize flour, sugar, rice, groundnuts and beans.
The deal also allows South Sudan to export refined petroleum products to Malawi, a move which is expected to cut costs of importing from the Arab world, according to Minister of Trade Sosten Gwengwe.
The minister signed the pact on behalf of Malawi Government while
South Sudan Minister of Trade Kuol Athian Mawien signed on behalf of South Sudan.
In an interview with The Nation from Juba on Thursday, the minister said: “This market is untraditional for us. It is outside Southern Africa Development Community and Common Market for Eastern and Central Africa and we want to make the Africa Continental Free Trade Area [AfCFTA] agreement a reality.
“We want more exports and more foreign exchange in Malawi. We want more young people to be motivated to do farming because access to market is now guaranteed.”
Gwengwe said that Malawi is looking forward to exporting food from this year’s cereals surplus estimated at 1.2 million metric tonnes (MT).
The minister said Malawi’s exports to South Sudan in 2020 were estimated at $3million (about K2.4 billion) while imports were estimated at only $15 585 (about K12.5 million).
This means that the trade gap between the two nations weighed in favour of Malawi during that trade year.
On his part, Mawien revealed that South Sudan is currently facing a record deficit of creals in years estimated at 465 600 MT.
He said: “There is shortage of food in the country, and we have been importing from neighbouring countries but our friends from Malawi government have seen our suffering and want to rescue us.”
He said the South Sudan Government will soon issue Letters of Credit to South Sudanese traders to facilitate them to import food from Malawi.
Meanwhile, the African Export-Import Bank (Afreximbank) has committed to support the Malawi-South Sudan trade deal by financing and promoting trade between the two distant countries.
While in Juba, Gwengwe held talks with Afreximbank president Benedict Orama where the Cairo-based bank plegded to bankroll trade arrangements between the two least developed countries. n