Minister concedes free trade agreements scare
Minister of Trade and Industry Sosten Gwengwe says the opening of borders due to free trade area agreements can relegate Malawi to a supplier of raw materials.
Speaking after a tour of Amani Industry Limited, a confectionary and juice-making firm in Blantyre on Friday, the minister said the threat comes from the state of the country’s industrialisation.
“We are in a free trade regime and as we cannot put duty on goods moving in and out of Malawi, we have some measures we can use to handhold our industries,” he said.
Gwengwe said government is determined to support the private sector to boost industrialisation and create jobs.
In an interview, Amani Industry Limited managing director Ali Mohamad Jawad said they are failing to compete with imported products because of price differences in the countries of origin.
He said: “Raw materials in other countries are cheaper and this brings stiffer competition.
“For instance, sugar which makes up 50 percent of our raw materials is 40 percent cheaper in other countries which puts us at a disadvantage.”
The $6 million (about K10.5 billion) investment, which produces 50 tonnes of sweets per day and employs 300 people, exports 15 percent of its products.
Malawi has trade agreements for preferential treatment with Common Market for Eastern and Southern Africa, World Trade Organisation, Southern Africa Development Community and has recently also signed the African Continental Free Trade Area agreement.
