United States (US) Ambassador Virginia Palmer has said Malawian firms are not fully benefiting from the African Growth Opportunity Act (Agoa).
She said she wants to see more local companies taking advantage of the window to export more to the US.
She was speaking in Mzuzu on Monday when she visited Kwithu Kitchens which cans tomatoes and produces tomato puree for export to the US at a small scale.
“Not as many products as I would like are being exported now. We would like to see more and more Malawian products exported to United States,” said Palmer.
She said it is up to Malawian companies to utilise the trade Act.
Records indicate that the country’s exports are declining with figures showing that the country exported goods worth $66 million in 2014, $61 million in 2015 and $37 million up to September 2016.
In an interview on Tuesday, economist Henry Kachaje, who is also president of Economics Association of Malawi (Ecama), said it is not surprising that local companies are not maximising the Agoa window because the country faces production constraints ranging from severe power outages to poor technology, among others.
“We do not have the technology to produce and be able to compete in a US market. Apart from that, we also have not been doing a lot of value addition to our agricultural products for exports,” he said.
Kachaje said the absence of an internationally accredited testing body is making it hard for producers to penetrate the international market.
“The only items that have the export potential are sugar, tea and coffee, among others. Beyond that, it has been a challenge for Malawi to export,” he said.
However, Kachaje said value addition still becomes a challenge if power challenges are not addressed as processing requires power.
He said the country lacks deliberate policies that support and strengthen export base.
Agoa is a United States Trade Act enacted in 2000 by Congress. The trade Act was renewed to 2025.
It allows sub-Saharan African countries, Malawi inclusive, to export goods to the US on a duty free basis with the aim of enhancing market access to the US for qualifying countries.
Products that can be exported include items such as apparel and footwear, wine, certain motor vehicle components, a variety of agricultural products, chemicals and stee, among others.
According to the Brookings Institution, Agoa has created 300 000 jobs in Africa.