Malawi explores US market for tobacco
Malawi President Peter Mutharika has asked the US-based Universal Leaf Tobacco Company (ULTC) to lobby their government through Congress to allow Malawi tobacco access the US market.
Mutharika made the request to ULTC board chairperson George Freeman during a meeting they held with their respective officials in the US financial capital, New York.
Majority shareholder in Limbe Leaf Tobacco Company Limited—one of the tobacco buyers in Malawi—ULTC, founded in 1918 and headquartered in Richmond, Virginia, is one of world’s leaf tobacco merchants and processors.
Its business includes selecting, buying, shipping, processing, packing, storing and financing of leaf tobacco in tobacco-growing countries for sale to, or for the account of, manufacturers of tobacco products throughout the world.
Speaking to the media on behalf of Mutharika after the 30-minute meeting, Minister of Industry and Trade Joseph Mwanamvekha said government wants ULTC to engage US authorities to remove barriers against tobacco from Malawi.
“As you know, we are not allowed to export tobacco into the USA. Therefore, the President asked ULTC to lobby the US government through Congress if some conditions under Agoa [Africa Growth and Opportunity Act] could be relaxed so that tobacco from Malawi is allowed into the US market,” he said.
Freeman confirmed discussions with Mutharika included the president’s desire to access the US market for Malawi tobacco.
“It is correct that we discussed the need to hold negotiations on Agoa to make sure that Malawi tobacco comes to the US duty free. We will take this dialogue forward,” he said.
Agoa was signed into law by president Bill Clinton in May 2000 to expand US trade and investment with sub-Saharan Africa, to stimulate economic growth, encourage economic integration and to facilitate sub-Saharan Africa’s integration into the global economy.
The request by Mutharika comes two weeks after a delegation from Egyptian-based Eastern Tobacco Company (ETC) were in the country to assess and conducting talks with various government and private sector officials on their plans to establish a tobacco processing and cigarette manufacturing company in Malawi.
The officials met with their colleagues from ministries of Agriculture, Lands, Industry and Trade, Malawi Investment and Trade Centre (Mitc), Malawi Revenue Authority (MRA) and tobacco companies, among others.
The company’s leader of delegation, Hamdy El Sayed, said they are keen on establishing the manufacturing company in Malawi.
“Our company is the biggest production company in Egypt. Malawi is our second home and we have a very long history with Malawi. We are already buying tobacco from Malawi and we realise how important the tobacco sector is to Malawi,” he said, but said establishing of the plant is subject to feasibility study and other conditions.
The Agoa Act establishes the annual US-sub-Saharan Africa Economic Cooperation Forum to promote a high-level dialogue on trade and investment-related issues.
At the centre of Agoa are substantial trade preferences that, along with those under the Generalized System of Preferences (GSP), allow virtually all marketable goods produced in Agoa-eligible countries to enter the US market duty-free.
Since its inception, Agoa has helped to increase US two-way trade with sub-Saharan Africa.
The US Congress requires the President to determine annually whether sub-Saharan African countries are eligible for Agoa benefits based on progress in meeting certain criteria, including progress towards the establishment of a market-based economy, rule of law, economic policies to reduce poverty, protection of internationally recognised worker rights and efforts to combat corruption.
As of August 2014, 41 sub-Saharan African countries were eligible for Agoa benefits.
—Gedion Munthali is reporting from the UN in New York, USA
