Some industry players have urged government to tread carefully on the operationalised Control of Goods Act, saying if not properly implemented, it could stifle local producers.
The Ministry of Trade last week operationalised the new Act following its publication in the Malawi Government Gazette on July 16 to curtail free-for-all import and export of goods and ensure predictability, certainty and transparency.
But George Partridge, group chief executive officer of Malawi Stock Exchange-listed conglomerate Press Corporation plc, in an interview on Thursday observed that the new law stifles small and medium enterprises (SMEs) on access to finance.
He said: “Banks are willing to finance things they know are very clear in terms of where things are going.
“If government can wake up one day and declare a ban on importing or exporting something, then financiers become reluctant to finance some products because they do not know if one day it will be banned,” he said.
Partridge cited how the cotton industry was killed in 2011 using the same law and how the country has not achieved food security because of issues surrounding management of maize.
He said the Act may seem to be protecting producers, but it could destroy business.
But in a written response on Friday, Ministry of Trade spokesperson Mayeso Msokera said the new Act would ensure efficiency and predictability by managing expectations.
He said under the new law, the minister cannot independently institute a trade measure without meeting certain thresholds.
“The Act enhances transparency and accountability in decision- making processes where a consultative mechanism has been embedded in the Act, including communication enhancements with interested parties before certain measures are taken to institute confidence in the investing public,” said Msokera.
Last week, Minister of Trade Sosten Gwengwe told a news conference in Lilongwe that all traders intending to obtain new permits should do so before August 7, a period in which traders will have to clear their goods that are currently in the import or export process under the old Act.
The minister said: “The main departure of the new Act from the old one is the introduction of transparency and predictability mechanisms.”
Gwengwe challenged local traders and manufacturers to produce more for import substitution, saying the new law will protect local production and markets to ensure that only those products in deficit on the market are authorised to be imported.
Some of the goods requiring import licences under the new Act include second-hand clothes, wild animals and associated products, meat, live poultry and associated products, fish, eggs, fresh milk, maize, fruits, cane sugar, bottled.
Importation of second- hand underwear and bras has been completely banned.
Some products requiring export permit include implements of war, petroleum products, scrap metal, gemstones, hides and skins, rice, raw round hardwood timbers, soybeans, cotton lint and seed and oil seeds.