The Indigenous Business Association of Malawi (Ibam) has said businesspeople, especially exporters need to be aware of requirements before they ship their goods.
Speaking in a telephone interview on Sunday, Ibam president Mike Mlombwa said Malawi traders apart from meeting other challenges such as financing, they usually operate in the dark regarding the required standards and the prevailing trade agreements.
“There are a lot of farm produce such as pulses and honey that can be exported and therefore sustain the current appreciation of the local unit, however, most traders are not aware of the market requirements in foreign markets.
“What we have noticed is that some of our businesses do not meet the requirements in these markets and thus their exports end up being returned. We have instances where exports have been sent back from Europe. We have also instances of goods being charged import duty in contravention of existing trade agreements within the Southern Africa Development Community (Sadc) and the Common Market for Eastern and Southern Africa (Comesa).
“Some of these exports were returned because the traders were not aware of the sanitary and phyto-sanitary requirements in these markets. These exporters apart from suffering loss in revenue have also borne the transportation cost.
“We would therefore like to encourage our traders to first investigate into market requirements from relevant authorities before exporting their goods. We, of course, are aware that government is implementing a number of policies and projects whose objectives are to improve the productivity and build capacity of key institutions and create a more enabling environment,” said Mlombwa.
He added that apart from knowledge about market requirements and trade agreements, businesspeople need to support each other and form partnerships if they are to exploit lucrative markets such as the European market.
He argued that for businesses to progress there was need to associate and form partnerships or joint ventures because although some are endowed financially others have technical skills while others have managerial skills.
He noted that it was important for Malawians to form partnerships when exporting their goods to cut on costs hence become more competitive.
Malawi primarily relies on tobacco for its export earnings although it is endowed with arable land and perennial water sources.
Experts have pointed out that, among others, Malawi needs to improve its productivity by, engaging in irrigation and adding value to its produce.
Other experts have however, noted that an improvement in productive capacity is not a panacea to Malawi’s lean export base. They argue that Malawi needs to improve certification and standardisation processes for its exports to meet strict requirements in the European and other lucrative markets.
To address both the productivity, and certification and standardisation bottlenecks, the Malawi Government is implementing the National Export Strategy (NES) which was launched last year which is being implemented under the Ministry of Industry and Trade in collaboration with other key stakeholders.
The NES, among other things, provides clearly prioritised and phased plans of action in key areas.
Firstly, the NES provides for the development of priority export clusters that can complement the exports of traditional products such as tobacco and tea.
Secondly, it provides for improvement in the enabling environment for private sector growth through enhancing the productive base of the economy.
The NES also provides for the development of key institutions that are key for sustainable growth.
The NES appreciates that facilitation of access to both domestic and international markets, including Malawi’s capacity to meet the standards requirements of importing countries, trade negotiation capacity and addressed non-tariff barriers is key to achieving more exports and move away from reliance on tobacco.
The NES however argues that to avoid unnecessary costs, the Malawi Bureau of Standards (MBS) should be viewed as a facilitator and not as a regulator of export standards.
“The NES, is keen to promote a market-led approach in which businesses first identify target markets and then the MBS facilitates businesses to meet the standards required by those target markets, through certification and its international accreditation.
“At the same time, MBS should reduce imposing its own mandatory export standards and inspection procedures on exporters. The latter approach is essential so that the government and stakeholders do not view the Malawi Bureau of Standards as a regulator, but rather as a facilitator of exporters, using target export markets as the benchmark, and not non-target markets.
“Otherwise Malawi runs the risk of only certifying products that meet European Union standards when the standards required by target markets in Sadc and Comesa might be significantly lower. This mistake can have a detrimental impact on Malawi’s capacity to export,” reads the NES in part.