Product certification and export licensing are top Non Tariff Barriers (NTBs) that exporters and importers experience in Malawi, says a survey by International Trade Centre (ITC).
The survey which is specifically on Malawi’s Non Tariff Measures (NTMs) released recently, reveals that traders experience a lot of bottlenecks when accessing markets in Europe, North America and smaller markets in Asia.
“On product certification companies have difficulties to meet international standards. In addition, Malawi lacks an internationally accredited facility to certify products. Export licencing is a real challenge due to the many institutions involved, which contributes to inefficiency in issuing licences,” says ITC report.
Specifically, the survey among others showed that 81.5 percent of exporting companies and 69.2 percent of importing companies faced burdensome NTMs and other obstacles to trade.
In an interview on Sunday National Working Group on Trade Policy (NWGTP) chairperson Geoff Mkandawire urged for the accreditation of the Malawi Bureau of Standards (MBS).
“Specifically food products face problems of certification. This is a problem in the country especially for small companies because standards of most big companies are internationally recognised,” said Mkandawire.
But in a telephone interview on Sunday, Ministry of Industry and Trade spokesperson Wiskes Nkombezi said the government is working on the problems.
“Currently we are upgrading MBS in terms of infrastructure, equipment and technical skills under a project funded by the European Union and the Malawi government. After completion of the project we hope our
bureau will be recognised and certification will no longer be a problem.
“There are some export licences that are issued by other ministries. We have engaged them to streamline the processes of issuing these licences because delays are costly,” said Nkombezi.
The ITC survey notes that exporters of fresh food and raw agro-based products reported impediments.
This is certainly a big obstacle as Malawi is agro based and exports raw agricultural products to many developed markets.
The report says that the interviewed companies encounter burdensome NTMs in every fifth country to which they export. However, ITC notes there are clear differences regarding which markets Malawian exporters find easier or more difficult to access.
“Only 7 percent of the companies exporting to the Southern African Developed Community (Sadc) countries face impediments in these markets. The result indicates that market integration in the region has successfully advanced beyond tariffs, towards facilitation of non-tariff market access, for example through mutual recognition of certification. Regarding major the Common Market for Eastern and Southern Africa (Comesa), the share of affected companies was rather low in Kenya 17 percent, but very high in Egypt at 100 percent,” says the report.
This revelation corroborates with earlier sentiments by the Ministry of Industry and Trade. Recently Minister of Industry and Trade Sosten Gwengwe said although the European and the American markets are lucrative to the country, Malawi traders face higher costs and experience more logistical bottlenecks to access these markets.
ITC notes that the EU is Malawi’s largest export destination. But it further notes that with 28.6 percent of interviewed companies reporting one or more burdensome NTMs in this market, it is a relatively difficult region to access. Similarly Northern America shows high shares of affected companies at 33 percent.
The survey provides mixed results on NTMs faced by exporters in the region to Asia. The survey says for China and the Russian Federation, two of the largest markets, no burdensome NTMs were registered. However in India, 25 percent of exporters were affected by challenging regulation and companies exporting to smaller Asian markets reported NTMs more frequently.
On transport, the survey says along both Mozambique routes [Beira and Nacala], most companies experienced substantial delays that varied between two weeks and three months.
“A fifth of the interviewed companies had to pay charges to have their goods “escorted” from the border post to Beira or Nacala. Furthermore, two companies pointed at a low level of security of goods,
particularly at Nacala. Their cargo was damaged on several occasions, or even stolen. Despite being more than twice as far away as either port in Mozambique, Durban is an alternative transit corridor for some exporters. Exporters tend to choose Durban together with importing customers if these require timely delivery and are willing to pay the extra costs,” says the report.
On transport Nkombezi urged traders to quickly notify the ministry of any other authority of any bottlenecks experiences on these routes.
“We have been engaging our counterparts in Mozambique and there has been an improvement. Both Mozambique and Malawi are Sadc members and have also a bilateral trade agreement, so these issues are normally handled in these fora,” said Nkombezi.