|Diagnostic Trade Integration Study (DTIS)||2004|
EIF is supporting Malawi to identify and quantify the trade costs constraining Malawi’s competitiveness in regional and international markets. The Trade, Industry and Private Sector Development Sector-wide Approach Programme (TIPSWAp) was launched to support the implementation of the National Export Strategy (NES) and the Malawi Growth and Development Strategy (MGDS) 2011-2016. Under the TIPSWAp, a Joint Sector Strategy was developed to support the incorporation of trade activities into the sector strategies.
Targeted strategic support in certain sectors has been provided with a strong emphasis on value chain addition and increased productivity.
- The WTO Trade Facilitation Agreement (TFA) was ratified after stakeholder consultations conducted by the Ministry and the Memorandum of Understanding on the One Stop Border Post (OSBP) between Malawi and Zambia was signed in May 2017, improving time for goods clearance at the border.
- The Industry and Trade chapter draft for inclusion in the MGDS III has been developed, this will further promote trade mainstreaming in the MGDS III.
- The EIF National Implementation Unit (NIU) participated in quarterly TIPSWAp Technical Working Groups (TWGs) meetings in the areas of Manufactures, Oilseed, Sugar, Access to skills and Business Development Services (BDS), Finance and Market Access and in Public‑Private Dialogue Forums where various stakeholders discussed policy reforms and constraints to trade and private sector development.
- 44 Export Ready SME representatives (29 male and 15 female) were trained on export procedures and documentation, quality control and requirements, Rules of origin, Simplified trade regime, SMEs pricing and marketing in Blantyre in April 2017 to prepare them to effectively participate in the global trading system.
- 69 traders (30 men, 39 women) were trained in quality management and market opportunities.
- The 29th Malawi International Trade Fair was held from 24 May to 3 June 2017 at the Trade Fair Grounds in Blantyre under the theme “Productivity: A source of export competitiveness”.
- Automated licensing system designed for the filling of all licences issued by Ministry of Industry and Trade was put in place. Populating licensing data is ongoing.
- Productive sector strategies (i.e., sugar, oilseed, manufacturing, etc.) which fully support trade dimensions have been developed.
- Five NIU Staff participated in project management training in South Africa from April to June 2015.
Enhancing trade – Smallholder farmers
The goal of the project is to address multifaceted challenges that smallholder farmers are facing in Malawi through the creation of a Rural Production, Marketing and Processing Hub.
- The project operates two anchor farms in Mchinji district - Kawerawera and Estate 59. Kawerawera farm has land size of 700 hectares while Estate 59 farm is in Kapiri with a land size of 850 hectares. A total of 140 hectares of new land was cleared in 2016 to accommodate the newly registered in-grower farmers.
- The project has recruited 3,537 farmers (385 in-growers and 3,152 out-growers).
- Women account for 58% of overall participants in project. However, active participation of women in price negotiations and marketing was low, and efforts will be made to increase female participation in these activities in 2017.
- In 2016, yields for in-grower farmers were 30% more for soya beans and 42% more for groundnuts compared to smallholder farmers that are not participating in the project. One reason for this is that in-growers have adopted Good Agricultural Practices (GAP), including early land preparation, timely weeding and pest control.
- On average, the yield for out-grower farmers in 2016 was 19% and 35% more for soya beans and groundnuts respectively compared to unsupported farmers growing similar crops. This was in part because out-grower farmers used inputs distributed by the farm and adopted recommended crop production methods.
- 1450 farmers were trained in Quality Management System (QMS) in 2016. The training covered soya threshing, groundnut crop drying using the Mandela Cork method, grading of grain and storage. This training significantly improved grain quality, farmer produce standards, and credibility on the local market.
- In 2016, farmers produced 117 MT of soya beans (61% of 190 MT target) and 136.14 MT of groundnuts (68% of 200MT target). Poor rainfall contributed to lower than expected crop performance.
- 44 farmers received training on pre/post-harvest handling of soya and groundnuts. These growers in turned trained members of groundnut and soya growing clubs in 2015.
- Post-harvest losses in the targeted project area were reduced to 9.1% in 2016. The reduction resulted from enhanced application of post-harvest loss management skills by most farmers. Crop loss management technologies adopted include timely harvest, proper drying and proper storage.
- The total quantity of soya beans marketed through the project in 2016 was 209.97MT (82% of 256.04 MT target). 82.05MT of groundnuts were also marketed (43% of the 192.8 MT target).
- In 2016, the project exported 72.91MTs of soya beans to Botswana (52% of 140.55 target) and 23.07 MTs of groundnuts to Zambia (14% of 164 MT target). The remaining stocks will be exported upon clearance and certification.
- Soya beans valued at $121,917 (77% of target) and groundnuts valued at $64,277 USD (21% of target) were processed and certified.
- In the past, farmers have lacked leverage and often have to accept low prices for their products from agro-processors. To help farmers bargain for higher prices, the project arranged meetings between farmers and different agro-processors so they could compare prices and highest offer. This model has resulted in farmers earning an average price of US$0.77/kg for ground nuts and US$0.54/kg for soya beans in 2016. This was a marked improvement over traditional markets, where the average prices were US$0.38/kg and US$0.40/kg for groundnuts and soya beans respectively.
- To help sustain the anchor farm model, the self-sustaining Seed Loan System and the Equipment Hire Scheme continue to be implemented.
Enhancing trade – Agro-processing
The Malawi Investment and Trade Centre (MITC) is developing an Agro-Processing Special Economic Zone (AP SEZ) in order to support the promotion of commercial farming for priority National Export Strategy (NES) crops. Malawian agro-processed products will also be promoted by establishing an MITC office in Tete, Mozambique to operate as a regional marketing office for Malawi’s products.
- A task force has been formed to spearhead the establishment of Special Economic Zones (SEZs) in the country. Parcels of land on which SEZs can be developed on have been identified across the country. An outline road map is in place to guide the approach to development. In 2015, a team of five officers visited Zambia to learn how SEZs are developed and operated in an African setting.
- An MITC office and Malawi Consular Office has been established in Tete, Mozambique. To date, one MITC officer has reported for work and was designated as Vice Consul – Trade and Investment. The Ministry of Foreign Affairs also deployed a Consul General to head the office and he has since been accredited. By designating the office as a consulate and by covering the salary of the MITC officer, the Ministry of Foreign affairs is ensuring that the office will stay beyond project’s life.
- One market analysis was undertaken during the year in Zambia (Lusaka and Chipata). The analysis revealed an opportunity for Malawi to sell products in the cities of Lusaka and Chipata. Some of the products that are enjoying a healthy market in the Zambia are sobo squash, sugar, soya pieces, juice and raw groundnuts. Potential exists for Malawian biscuits, rice and tea. Three distributors expressed interest in Malawian products, and one processor (COMACO) was interested in importing over 100 tonnes of chalimbana ground nuts. Since there are a number of supermarkets that have outlets in the two cities, the best approach to reach them all is through distributors.
- A new website MITC portal (http://trade.mitc.mw/) was developed to promote interaction between MITC and its clientele. The backend system of the portal will be further enhanced to enable tracking of export orders and investment inquires. Since its launch, the trade portal has moved from getting on average 75 monthly hits in November 2015 to 750 hits by December 2016.
- In 2016, project sensitization workshops were held in all the three regions of Malawi targeting potential beneficiaries. A total of 122 participants attended the workshops, which covered how exporters and potential exporters could benefit from the project, and introduced the MITC trade portal as the hub for trade information for Malawi.
- After the workshops, 69 companies were visited across the country to assess their export readiness. 15 were then selected to receive support to enhance their technical and export marketing skills and to enable them to produce high quality products in larger quantities. For example, MITC is working with Mtalimanja Holdings to use state of the art rice processing and packaging technology, and has started working with 14 other companies.
- 15 companies, including 7 SMEs, attended a trade fair in Zimbabwe. Export orders of over $195 million were generated and a $2 million investment interest in steel fabrication and cattle farming was obtained during the fair. The investor who had an interest in cattle has already set up in Malawi.
Malawi Window II Project Brief (2005)English
Malawi Aide-Mémoire (2002)English
Malawi Action Matrix (2004)English
Malawi DTIS Volume 2 Chapter 7: Trade and Poverty (2002)English
Malawi DTIS Volume 2 Chapter 6: Cotton and Garments (2002)English
Malawi DTIS Volume 2 Chapter 5: Tea (2002)English
Malawi DTIS Volume 2 Chapter 4: Tobacco (2002)English
Malawi DTIS Volume 2 Chapter 3: Transport (2002)English
Malawi DTIS Volume 2 Chapter 1: Regional Trade (2002)English
Malawi DTIS Volume 2 Chapter 2: Customs (2002)English
Malawi Diagnostic Trade Integration Study (DTIS) (2004)English
Malawi Poverty Reduction Strategy Paper – Growth and Development Strategy (2006-2011)English
Malawi DTIS Update (2014)English
Malawi Annual Progress Report (2013)English
EIF Focal Point/Director of Trade Department of Trade Ministry of Industry, Trade and Tourism Lilongwe
Donor Facilitator, Delegation of the European Union to the Republic of Malawi