Agoa strategy set to boost exports by 20%
The Ministry of Industry, Trade and Tourism says it targets to increase exports from Malawi to the United States (US) through the Africa Growth and Opportunity Act (Agoa) trade window by about 20 percent in the next five years.
This ambitious feat is contained in the new National Agoa Response Strategy for Malawi, which was unveiled to stakeholders in Mzuzu on Monday.
The strategy provides a comprehensive plan for increasing exports from Malawi to the US market under the Agoa non-reciprocal unilateral trade preference programme.
As a beneficiary of Agoa since its inception in May 2000, Malawi has not significantly utilised the trade preference opportunities on offer.
According to US International Trade Commission Tariff Database, Malawi exports under Agoa were $56.1 million (about K42 billion) in 2011, mainly consisting of tobacco and the exports declined to $46.3 (about K34 billion) in 2012 then peaked at $57.4 (about K42 billion) in 2014.
In 2015, the exports dropped to $41.1 million (about K31 billion).
In an interview on Monday in Mzuzu, Ministry of Industry, Trade and Tourism deputy director of trade Charity Musonzo said exports have been declining because the country’s production levels are below capacity.
“The US market is huge. They require products in huge quantities to be exported consistently. But the major setback has been the inconsistent supply of the products on the export market,” she said.
Musonzo said the strategy is a response to the opportunity offered by the Agoa market, which has extended to 2025.
She said the proposed priority products for export under Agoa are categorised into short, medium and long-term to enable the allocation of resources and implementation of the strategy.
The proposed products and categories are macadamia nuts and handicrafts (arts and crafts) for the short-term, which is one to two years; honey for the medium-term or two to five years and mangoes and tea for the long-term, which covers up to five years.
Southern Africa Trade Investment Hub director of export competitiveness George Makore said: “The idea for the strategy is to identify priority products and constraints to exporting under the programe. Findings will then be looked at to resolve the bottlenecks that are making exporting difficult.
On her part, United States Agency for International Development (USaid) policy and partnership development specialist Eluphy Nyirenda encouraged businesses to take advantage of Agoa trade window.
“Instead of exporting by paying duty, with this programme duty, is scrapped off, which makes products cheaper and easier to export to the US,” she said.
The National Agoa Response Strategy for Malawi was developed in line with the recommendations of the Agoa Trade Preferences Extension Act of 2015 and is aligned with the objectives of the Malawi National Export Strategy.
