Minister of Trade and Industry Simplex Chithyola Banda has emphasized the critical role export credit finance plays in promoting trade and investment, also as an essential tool for boosting exports facilitation.
Chithyola Banda made the remarks on Monday during the opening of a three-day strategic training on Export Credit Finance in Lilongwe.
He said export credit finance is a very strategic area for Malawi as it augers well with the vision of the administration of His Excellency the President, Dr. Lazarus McCarthy Chakwera, as the country strive to achieve a Malawi that is an inclusively wealthy and self-reliant export-led industrialized upper middle income country by 2063.
“Many African countries, Malawi inclusive, have rich natural resources that hold the tremendous potential for increased export activity, but we often lack either the financial resources or innovative financial instruments to fully exploit them to our economic advantage,” he said.
According to him, the recently operationalized African Continent Free Trade Area (AfCFTA) Agreement opened up vast regional trade opportunities, as it creates a unified market with over 1.2 billion people and a gross domestic product (GDP) of $2.5 trillion.
However, Banda said, for businesses within the SADC Region to be able to exploit such vast opportunities, there is need for access to finance to bring goods and services to these markets.
He added that his Ministry is aware of the growing demands for our country and other countries within the SADC region to expand export trade footprints within the African region and even beyond by growing the existing markets and opening frontier markets.
He said: “With such calls, the issue of export credit finance is becoming even more important. Adding that
as a region we need sound export credit finance functions that should ably enable export trade in a safe, value adding, and sustainable manner.”
But for this to materialise, Banda said, countries need to constantly invest in skills and capacities to complement efforts of growing and diversifying export credit finance schemes and instruments that are available within the region and beyond.
Southern African Development Community -Development Finance Cooperation and Resources (SADC-DFCR) Chief Executive Officer, Stuart Kufeni said the development of strong skills base for financial sector particularly national development finance Institutions who are mandated by governments to mobilize resources for the development of key sectors like agriculture, industry, Small, Micro and Medium Enterprises (SMMEs) is of utmost importance.
“Not only is a staff well capacitated with requisite skills crucial for the performance of an institution but also for its long term financial sustainability,” he said.
Export Development Fund (EDF) Chief Executive Officer, Frederick Chanza said export credit finance serves as a lifeline for economies like Malawi to tap into the immense potential of international trade.
“With limited resources, the support of export support agencies becomes essential to fund ambitious projects that can boost our economic growth,” he said.
Chanza added that the agencies also alleviate the risks associated with cross-border transactions, making them a vital partner in the journey towards economic prosperity.
However, the training has been designed to empower the professionals to deepen their knowledge of export and trade credit for improved export finance landscape among others.