Strategy set to boost US trade with Malawi, others

The United States (US) has reviewed its strategy towards sub-Saharan Africa under the African Growth and Opportunity Act (Agoa) to respond to the economic fallout brought by the Covid-19 pandemic.

In a statement issued last week titled ‘US Strategy Towards Sub-Saharan Africa’, the US Government said the new strategy represents a reframing of Africa’s importance to the US.

Under the strategy, the US seeks to, among others, foster transparency and create an advanced economic recovery and economic opportunity through the Agoa trade window.

The window gives Malawi and other sub-Sahara African countries duty-free access to US markets for certain goods as well as strengthening its engagement and partnership with Africa.

Reads the statement: “The strategy articulates our new vision for a 21st Century US-African Partnership.

“It recognises the tremendous, positive opportunities that exist to advance shared interests alongside our African partners.”

Under the strategy, the US said it has interest in ensuring the region remains open and accessible to all.

The revised strategy comes at a time Malawi’s exports to the US through Agoa trade window continue to decline, falling by 9.23 percent in 2021 alone.

Available data from Trade Law Centre show that Malawi’s exports to the Agoa trade window declined to $31.31 million (about K32 billion) from $34.5 million (about K36 billion) in 2020.

Such a performance has put Malawi as one of the least beneficiaries under the Agoa market in the 2021/22 financial year after Zambia, Namibia, Gabon and Uganda.

National Working Group on Trade Policy chairperson Fredrick Changaya said in an interview yesterday that the declining trend dampens the aspirations not only under Agoa, but also in terms of trade for the country.

He said: “We continue to rely on commodity exports primarily tobacco, macadamia nuts, lentils, pigeon peas, among others. Traditionally, commodities suffer from price oscillations.

“If people were being sensitised regularly to the existence of Agoa, many would have jumped at the opportunity. Similarly, the National Export Strategy should have put incentives for local investors to invest specifically for Agoa.”

Through the National Agoa Response Strategy and Action Plan for Malawi, Ministry of Trade and Industry sought to increase exports to the Agoa market from $51.3 million (K53 billion) in 2016 by at least 20 percent during the next five years.

This means that by 2021, the country would have exported at least $62 million (K64 billion), which is half of what is being exported at the moment.

The strategy gives government and the private sector tools and actionable recommendations for generating revenue and jobs as the country develops its productive base to drive its export competitiveness and economic empowerment agenda.