The Export Development Fund (EDF), a local development financing institution, says it will facilitate the export of 50 000 tonnes of assorted agricultural commodities that will bring in about $50 million (about K37 billion) in export earnings this year.
EDF managing director William Matamba said in an interview on Wednesday the products will be exported under its commodity market making window.
He said EDF has identified markets mainly in East Africa and Southern African Development Community (Sadc) trade bloc.
Besides the regional markets, Matambo said EDF has made some inroads into the Middle East and Asian markets, but the main challenge has been the lack of capacity to meet the demand.
He said: “There are already some small and medium enterprises [SMEs] that will benefit from this since we have agreements to buy whatever they will produce and aggregate for export.
“The prospects for 2019 look better, looking at the crops in the field and assuming the rains will continue coming the way they are doing to the end of the season.”
Matambo said beyond rain-fed agriculture, EDF is working with a number of stakeholders to encourage winter cropping through irrigation.
He said some of the commodities to be exported as proposed by some SMEs include oil seeds such as groundnuts, soy beans and various types of beans, pigeon peas, rice, bird’s eye chilli and paprika.
Reacting to the available export opportunities, National Small and Medium Enterprises national coordinator William Mwale commended EDF initiative of empowering SMEs to benefit from the export market.
He, however, said there is need for EDF to do more in terms of financing the value addition aspect to create jobs
Said Mwale: “We appreciate that EDF is the government machinery tasked to stimulate private sector-led exports. While some of our members are benefitting from the EDF initiative, there are others who feel that their conditions are not favourable to SMEs growth. We hope that moving forward, loan conditions will be softened to reach more SMEs.
“We would like to also suggest that EDF should emphasise on the promotion of value addition for exports. We know that they are already into this, but more needs to be done.”
But Matambo said the EDF has been creating jobs for a number of people to work in various capacities under commodity market making initiative.
EDF, which was established in 2012 as part of the Reserve Bank of Malawi (RBM) to promote exports, collaborates with businesses that have sourced viable export contracts but lack capacity to aggregate the required quantities.
EDF, therefore, identifies local businesses to aggregate agricultural commodities in their localities and supply to EDF.
In the event that suppliers have not been able to fulfill the orders, EDF works with bigger companies to meet the demand.
EDF is a development financial institution whose major objective is to increase the productive potential of the country through provision of finance, equity participation or credit guarantees and advisory services to help set up, expansion and modernisation of viable enterprises. n