The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) says lack of awareness and a challenging business environment will affect the country’s implementation of the African Continental Free Trade Area (AfCFTA).
In a written response to a questionnaire on Wednesday, MCCCI chief executive officer Daisy Kambalame said while lack of information is slowing the uptake of the AfCFTA pilot initiative, challenges facing the businesses sector could make Malawian goods and services to be uncompetitive initiative
She said: “Businesses in Malawi are facing a number of challenges including macroeconomic instability, an unfavourable tax regime, forex challenges and lack of affordable financing, making Malawian goods and services uncompetitive, which will likely affect our implementation of the AfCFTA agenda.
Kambalame
“On a regional level, the Intra-African trade continues to face a number of impediments, including infrastructure inadequacy, costly and unreliable transportation, cumbersome custom procedures and payment gaps, making the regional markets difficult to capture.”
Kambalame, however, said the initiative is attractive to the Malawian private sector as the Intra-African trade in agriculture alone has the potential to increase by 574 percent by 2030 if tariffs are eliminated under the AfCFTA, at a time developed nations are closing up markets amid changing aid dynamics as the global sentiment is shifting towards self-sustaining economies.
The AfCFTA initiative, GTI, is a pilot initiative to accelerate trading by enabling commercially meaningful trading and test the operational, institutional, legal and trade policy environment under the AfCFTA, a market that embraces 54 countries with 1.3 billion people and a combined gross domestic product of $3.4 trillion.
According to AfCFTA, the legal basis for the implementation of the initiative is the ministerial directive on the application of provisional schedules of tariffs concession issued on October 10 2021, which provides the basis to start commercially meaningful trade under the AfCFTA preferential rules.
Ministry of Trade and Industry has since encouraged local firms to start utilising the initiative.
“The ministry and AfCFTA secretariat will be helping them with export guidance under GTI once they are ready,” said the Ministry’s spokesperson Patrick Botha.
The AfCFTA is a trade pact that creates a harmonised and integrated continental market of 1.2 billion people in 55 countries with a combined gross domestic product valued at $3.4 trillion.
The Malawi Government recognises the AfCFTA as an opportunity to achieve its goal of expanding and diversifying the export products and services at regional and global levels under the National Export Strategy II.
