Malawi’s economic plan weak on agro exports

Farmers Union of Malawi (FUM) has faulted the Economic Recovery Plan (ERP) saying it  is weak in ‘aggressively’ promoting agricultural exports.

FUM has warned that the implementation of the 18-month old ERP may suffer from coordination failure and low investment drive because ‘it appears to be public sector led.’

The union’s observation comes barely a few weeks after the International Monetary Fund (IMF) has told the Malawi Government to expand priority areas governing the ERP by including the manufacturing sector.

“We think the ERP is weak in terms of pursuing an aggressive strategy towards promoting agricultural exports,” said FUM executive director Prince Kapondamgaga.

He said given the heavy reliance of the economy on agriculture, there is need to have an aggressive strategy to promote agricultural exports to broaden and deepen the sources of foreign exchange which, he said, is critical to support the current macro-economic policy framework.

Kapondamgaga noted that the ERP is silent on providing incentives for organised farmers to invest in the agriculture sector and promote agro-processing and value-addition rather than production of primary commodities.

He observed that the ERP falls short of addressing import substitution by clearly spelling out a strategy that would support middle-class or highly motivated and organised farmers willing to produce either for the export market.

“Perhaps these issues should be taken up at the operational level, but as it is in the ERP, without a clear operational plan, the private sector may not see an incentive to invest because of lack of clarity and a supporting policy framework,” said Kapondamgaga.

Commenting on the likely coordination failure in the implementation of the plan, the FUM official said the union would prefer having a public-private-partnership (PPP) initiative to implement the recovery plan.

He suggested that the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) should coordinate with the union in the implementation and also being responsible for monitoring the outcome indicators of the plan.

In such a scenario, Kapondamgaga said, government’s role would be to provide an incentive policy framework, provision of public goods and services and also guaranteeing financing through the existing financial market players.    

According to him, the monitoring and evaluation on agriculture—one of the key priority sectors of the plan—is weak and not entirely consistent with the objective of the ERP.

“In my view, I would rather see indicators such as foreign exchange generation from agricultural exports, export volumes or values of specific commodities, number of farmers investing in production, agro-processing and value-addition activities.”

 He called upon government to identify a finite number of agricultural commodities in which Malawi has a competitive advantage against identified regional and international markets and come up with a well structured strategy to produce such commodities.