Liberalisation of trade in services which is the exchange of intangible goods is key to better consumer choice and the development of the economy, Malawi’s Ministry of Industry and Trade has reiterated.
Minister of Industry and Trade Sosten Gwengwe, commenting on the importance of liberalising the sector in an interview last week, ahead of a meeting on trade in services which was held in Addis Ababa, Minister of Industry and Trade, Sosten Gwengwe noted that other member States in the region have developed services sector. He, however, argued that the country would still open up to face competition.
“We have to tread carefully on liberalisation of trade in services.
It is a balancing act between consumer benefits through access to more and quality services and protecting local industry. Some member States in the region have well developed services sector which may hurt our local industry through competition but at the same this may also benefit the consumer,” said Gwengwe.
He added that so far the country has benefitted from liberalisation through increased investment in services sector such as banking. He also noted that local commercial banks have also extended their footprint to other member States, thanks to liberalisation of the sector.
The United Nations Economic Commission for Africa (Uneca), the African Union and the UN Conference on Trade and Development (Unctad) from September 12-13 hosted an African regional meeting on promoting services sector development and trade led growth in Addis Ababa.
According to a statement issued by Uneca, the meeting was intended to provide an opportunity to inform experts in the sector in Africa of various initiatives undertaken at national and regional levels.
Uneca added that the meeting will also be an occasion for stock taking and reflecting on how to enhance the support provided by development partners and donors to respond to the challenges faced by African countries in the 21st century.
On the agenda of the meeting also included issues on how to achieve sustainable development and job creation through the services sector, opportunities and challenges in services trade liberalisation across Africa, and developing strategies for further expanding the sector.
The forum also planned to tackle the challenges of policy implementation as well as the involvement of stakeholders in policy making.
Uneca said the forum will include trade officials, services policy-makers, regulators, the private sector, academia, research institutions and civil society organisations as well as regional players and international organisations active in supporting the development of the services sector on the continent.
In the statement, Uneca notes that an efficient and productive services industry contributes significantly to productivity growth and is crucial for the overall competitiveness of an economy, including in manufacturing and agriculture.
The United Nations arm for Africa further notes that while developed countries still dominate the services industries, developing nations’ share of the sector has been growing strongly in recent years.
Uneca also said that compared with Asia’s eight percent, the America’s six percent and the Transition Economies’ seven percent, Africa’s contribution to global services exports in 2012 was 2.2 percent.
In August last year the Southern African Development Community (Sadc) member States including Malawi approved and signed the protocol on trade in services in Maputo, Mozambique.
The protocol sets out a framework for the liberalisation of trade in services between Sadc member States and serves as a basis for negotiations.
Experts argue that liberalisation in trade in services will prompt efficiencies and access to quality services to consumers which is the same spirit liberalisation of trade in goods is based on.
According to Sadc, negotiations on the protocol will initially focus on six key service sectors—construction, transport, energy, tourism and financial services—and eventually cover all sectors and modes of supply.
However, the members acknowledge the existence of asymmetry as some member States are disadvantaged by reason of the size, structure, vulnerability and levels of development of their economies.
However, Government recently said it has made progress on the Sadc protocol and will soon ratify it to ensure better services in the sector.
Deputy Minister of Trade Sam Ganda was quoted in The Nation saying that the process of ratifying the protocol is at an advanced stage and soon it would be implemented.
The deputy minister noted that a lot of progress has been made including consultations with key stakeholders, what remains now is input from the President. Malawi as a country cannot be operating as an island, it needs to integrate in the global village.