Malawi banks on free trade area

Malawi banks on free trade area

Minister of Trade and Industry Sosten Gwengwe says Malawi is banking on safeguards in the African Continental Free Trade Area (AfCFTA) to grow local industries and reap from the continental trade pact.

Speaking on the sidelines of the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) 2024 Business Leaders’ Summit in Mangochi on Friday, he said this will help Malawi compete favourably by sending value-added products.

Gwengwe: We are proceeding in that agreement

He said: “There is always a balance between free trade and protecting your industry. The AfCFTA regime has given time for countries such as ours whose industries are still in infancy so that it should not be a shock.

“We are proceeding in that agreement so that we may be supported to develop our industry, because up until Malawi has industries, the AFCFTA may not be as useful. We cannot position ourselves only as a source of raw materials.”

The AfCFTA Protocol on Trade in Goods says State parties may, with respect to goods traded under its provisions, apply anti-dumping, countervailing and safeguard measures.

Safeguards actions are designed to deal with unexpected circumstances arising in the course of fair trade where international obligations to liberalise trade in goods are reconciled with specific domestic needs.

MCCCI immediate-past president Lekani Katandula described the AfCFTA as a double-edged sword, saying if Malawi is not careful, it can “completely” wipe businesses in the country.

 He said: “The AfCFTA presents both an opportunity and a threat. If one is a competitive producer, it gives you a bigger market and, therefore, you can grow your market massively.

“But on the other hand, if you are not that productive and competitive, it is going to swallow and bury you.”

Katandula said if “we prepare our businesses”, it will be an opportunity for Malawi.

Meanwhile, Malawi, alongside other 36 countries has joined the AfCFTA trading under the Guided Trade Initiative.

To qualify for the initiative, Malawi signed and ratified the AfCFTA and organised the private sector.

AfCFTA principal officer in the department of trade in goods and competition Diana Akullo Ogwal earlier said since the initiative was launched in October 2022, there has been growth in processed products in addition to agricultural products.

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.

The AfCFTA is probably the world’s largest free trade area bringing together 55 countries and eight regional economic communities to create a single market for the continent.

The trade bloc has 1.3 billion people and combined gross domestic product of about $3.4 trillion.

The post Malawi banks on free trade area first appeared on Nation Online.

The post Malawi banks on free trade area appeared first on Nation Online.