AHL Commodities Exchange (AHCX) has said the structured agricultural commodities market has potential to boost the country’s economy to levels where it may not even need some of the loans it gets from international financial lending institutions.
AHCX general manager Davies Manyenje told members of Parliament (MPs) under the Parliamentary Committee on Agriculture on Wednesday that in a few years, Malawi can raise its capabilities and be able to generate up to $1 billion (about K721 billion) in a year with necessary reforms undertaken on the commodity market in the country.
He said there is need to have necessary policies and laws that can help plug openings which lead to huge losses of revenue from exportation of agricultural commodities due to use of uncharted systems and under-declaration of trade volumes in the sector.
“If we start to trade through structured markets, we will have full declaration of expert value. There is a lot of under-declaration happening around and we want all this addressed.
“When we do that, the benefits will pass through to the producer and that should be an incentive to make them produce more and, therefore, the higher volumes should translate to higher revenue,” he said, asking legislators to support ongoing reforms in the agriculture sector.
Parliamentary Committee on Agriculture chairperson Felix Jumbe said they support the structured agriculture commodities market.
“I think that as Malawi, we have been losing out in this area. When we say that lack of market is not exactly that there is no market because at the end of a season, every commodity is sold which means there is a market but we are lacking organised market system.
“If the landscape can be reformed, it will bring tremendous change on the part of revenue being realised by farmers and government from the sector,” he said.
Currently, Ministry of Industry, Trade and Tourism, Ministry of Agriculture, Irrigation and Water Development and other stakeholders are conducting consultations for the development of Warehouse Receipt Bill which is expected to help in reforming the commodities market in the country.
The MPs were conducted on a mock commodity exchange auctioning at the market for them to appreciate how transparent and competitive the system