Minister of Trade and Industry Vitumbiko Mumba has justified the ban on some selected imported goods, saying it is the best decision for the local manufacturing industry.
But he admitted during a press conference in Lilongwe on Monday evening that they are not sure if the targeted producers have the capacity to meet the demand on the local market.
In a government gazette dated March 13, Mumba announced an import ban on maize flour, fresh milk, rice, peanut butter, honey, toothpicks, security boots, garlic and meat products, among others.
He said the ban of imports that can be produced locally, which is a temporary measure to run for three years, is meant to protect and uplift the local industry.
He also disputed claims that the ban will contravene regional integration drive under African Continental Free Trade Area, Southern African Development Community and Common Market for Eastern and Southern Africa.
Said Mumba: “This restriction order has not contravened any international trade agreement as it is not a permanent ban, but rather a temporal arrangement based on the current trade and industry environment that has greatly affected our economy. We are not the only country to take this route.”
He said if local manufacturers will fail to utilise the opportunity, government will revoke the imports ban.
However, international trade expert and Common Market for Eastern and Southern Africa (Comesa) Business Council president James Chimwaza said in an interview yesterday that shielding local industry from international competition shows lack of competency of the producers, which should be addressed by making them competitive.
He said: “In such a scenario, the best way to solve it in the long-term is to make the local industry more competitive and efficient in line with the regional integration agenda because imposing an import ban cannot guarantee improved production capacity.”
Chimwaza advised the government to communicate its decision properly and use dialogue to convince its trading partners on why it has imposed imports ban.
“Dialogue is key and there is a need to use available channels to communicate the decision, including reasons and the timeframe for the ban to convince its trading partners that it is a temporary measure while its continued cooperation regarding integration aspirations remains intact,” he said.
In a separate interview, Cross border Traders Association of Malawi president Steven Yohane said the country’s production capacity remains low, adding that the decision was rushed before empowering the local producers to boost their capacity.
“As we do not produce to sustainable levels, we welcome the ban but based on our experience, the decision was rushed before most producers were empowered. If the government wanted to go this direction, it would first enable local producers to have access to capital to ensure sustainable production and supply,” he said.
MCCCI chief executive officer Daisy Kambalame warned in an earlier interview that despite the government being justified to impose the ban considering the current foreign exchange crisis, “a kneejerk reaction” can also be counter-productive.
National Working Group on Trade and Policy chairperson Frederick Changaya, who is also managing director of Applecore Grain and Milling Limited, said in an interview that nascent industries that can lift the industrial index of a country higher require tactical protectionism.
