A new policy brief on economics and trade has raised concerns over Malawi’s Export Mandates, warning that the policy could weaken the country’s economy by limiting foreign exchange earnings, discouraging investment, and disrupting trade agreements.
The brief is from MwAPATA Institute – an agricultural think-tank, titled What are the Potential Impacts of Export Mandates on Malawi’s Economy and Development Trajectory?, co-authored by Christone J. Nyondo, Patrick S. Kambewa, Dinah T. Salonga, and Milu Muyanga.
It argues that while the mandates were introduced in 2021 under the 2018 Control of Goods Act (COGA) to formalize trade and ensure revenue repatriation, their restrictive nature could have long-term negative consequences.
“The initial attempt to implement the Export Mandates in 2022 was abandoned due to resistance from exporters, who felt that the policy favored large corporations while sidelining small traders. If the mandates are not carefully restructured, they could lead to unintended economic setbacks,” reads the brief.
One of the key concerns that the policy brief raises is the impact on foreign exchange reserves. In 2021, according to the brief, soybeans were the country’s second-largest foreign exchange earner after tobacco.
It warns that restricting such exports could reduce foreign currency inflows, making it harder for Malawi to pay for essential imports and stabilizing the local currency.
“Export bans may seem like a solution to ensure domestic supply, but in reality, they discourage farmers and traders from expanding production. If producers cannot access higher-paying international markets, they may shift to subsistence farming, which contradicts Malawi’s long-term economic goals,” it reads.
The policy brief also highlights that export restrictions could weaken Malawi’s position in regional and international trade agreements, including the Southern African Development Community (SADC) Trade Protocol, the Common Market for Eastern and Southern Africa (COMESA) Trade Agreement, and the African Continental Free Trade Area (AfCFTA) which are designed to create opportunities for Malawian producers.
The findings further suggest that the export mandates contradict key national policies, including the Malawi 2063 (MW2063), which emphasizes commercial agriculture, value addition, and market expansion.
Additionally, the National Export Strategy II (NES II) seeks to strengthen Malawi’s export competitiveness, but restricting trade could make the country less attractive to international buyers.
“Malawi needs to strike a balance between regulating trade and promoting economic growth. While the government’s intent to formalize exports is understandable, an overly restrictive approach could have the opposite effect,” reads the policy brief.
To address these concerns, the Institute recommends that Malawi refine its approach to export mandates by replacing export bans with variable taxes and quotas to minimize market distortions.
The government should also establish a multi-sectoral liaison committee to oversee the implementation of trade policies and ensure stakeholder involvement.
Additionally, efforts should focus on enhancing domestic productivity to reduce reliance on trade restrictions while developing a system to trace export earnings without excessive bureaucracy.
The report further suggests introducing self-reporting mechanisms with incentives, such as allowing exporters to use foreign earnings for essential imports.
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